Analysis Of Miller Coors Merger

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I’m also skeptical about the prospects for saving significant money on marketing competing products like Coors Light and Miller Lite just because they’re suddenly being pushed by the same company, especially when there are at least five other light beers in the portfolio. We saw some marketing that looked a lot like turf wars between Michelob Ultra and Bud Light a couple years of ago, over “low carb” claims; expecting Miller Lite and Coors Light to play nice seems to be a reach.

Which brings up the question of differing corporate backgrounds. Rather than two separate entities simply being jammed together, this is a situation in which each company is itself the product of two different and recently melded corporate cultures—it’s Molson Coors and SABMiller. One potential trouble spot: Coors’ Blue Moon group has to be wondering about a recent statement by SABMiller C.E.O. and MillerCoors vice-chair Graham McKay to the effect that the craft-beer resurgence will inevitably fade.

There’s bound to be a period of confusion and turbulence, an opportunity for Anheuser-Busch noted by chairman August Busch IV in a memo (published on the Web by BrewBlog, (a Miller outlet) that read, “There will be significant transition confusion from this change, and it’s up to us to capitalize on this disruption now.”

Bad news for MillerCoors, since the confusion will probably increase the chances of a merger between Anheuser-Busch and the world’s largest brewer, the Belgium-based InBev. Anheuser-Busch already imports InBev’s products, which might be a “getting to know you” phase prior to a possible merger. A new company—InABuddaDaVida?—would be a beautiful match of overseas and American markets, with very little overlap.

It would also, of course, be much, much larger than MillerCoors, which would have nowhere to go for more U.S. market share—except maybe to Corona, the substantial import player brewed by Mexico’s Grupo Modelo. Too bad Grupo is already 50 percent owned by Anheuser-Busch.

The new deal looks less like a brilliant move than a matter of making a virtue of necessity: a shotgun wedding, not a happy marriage. If chairman Pete Coors can manage to grow both Miller Lite and Coors Light, he’ll have succeeded beyond reasonable expectations.

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