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Southern Oregon beer drinkers line up against mega-merger

Southern Oregon knows good beer, and now a group of quaffers that includes 11 Josephine County and five Jackson County residents are teaming up to take on the Coors, Buds and Millers of the world.

They are plaintiffs in a lawsuit against the world's largest brewer, Anheuser-Busch InBev, filed earlier this week in U.S. District Court in Medford, over its proposed buyout of SABMiller, the second-largest.

"It's not because I'm terrified my beer prices are going to go up tremendously," explained plaintiff Brian Bouteller of Grants Pass, an occasional craft brew drinker who prefers local beers. "It's more because it's bad for Southern Oregon. It will have an effect on a very local economy.

"It's something Oregonians should be concerned about. Oregon should be proud to be a leader in this."

Named plaintiffs in the suit include three Medford residents, two Central Point residents, two Bend residents, and individual residents of Portland, Williams, Puyallup, Wash., and Tiberon, Calif. Their attorneys — Christopher Cauble of Grants Pass and Joseph Alioto of San Francisco — say the acquisition that would put Coors, Miller, Budweiser, Molson, Corona, Beck's, Busch, Michelob, Rolling Rock, Henry Weinhard's and others under one large umbrella violates antitrust laws, creating a monopoly.

According to the court filing, ABI InBev's 200 brands brought in $47 billion in 2014, more than 46 percent of the U.S. market. SABMiller's $22.3 billion in sales the same year were 25 percent of U.S. beer sales.

According to the complaint, "By combining the largest and the second-largest brewers of beer sold in the United States, the defendant, ABI, would be a global beer behemoth with a market value of roughly $275 billion, and 71 percent of the beer market in the United States, sufficient monopoly power to exclude competition and raise prices."

In an interview earlier this week, Alioto said, "It's an outrageous commentary on the competitive system in this country."

"They are losing money to craft brewers and this is a way they try to pound you," Cauble added. "This is a whole new attempt to dominate the market. They will control distribution. They could tell a bar: 'We don't have to sell to you unless you sell our stuff (exclusively).' "

Cauble said he'd file a motion next week for a preliminary hearing.

"The Department of Justice has to approve it, and they're a long way from doing that," Cauble said. "If they approve it, it turns into a damage case. It could be a class-action suit."

Lawmakers are also concerned.

Sen. Jeff Merkley, D-Ore., and other members of Congress have asked the U.S. Department of Justice to protect craft brewers all over the U.S. from potentially unfair and illegal trade practices from larger beer companies.

"As members with robust craft brewing industries in our states, we ask that you take the necessary steps to ensure that AB InBev's purchase of SABMiller does not allow the new combined company to squeeze out America's craft-brewing industry," the senators said in their letter to U.S. Attorney General Loretta Lynch in November.

Alioto unsuccessfully fought AB InBev's recent buyout of Mexican brewer Grupo Modello.

After the recent proposal by the beer giants, Alioto contacted Cauble because Oregon is a national leader in craft-beer production and consumption. He said he'd worked with Cauble before and considered him a good lawyer.

Soon, 23 plaintiffs were on board.

"It's important to have your Average Joes who drink beer," Cauble said. "The reason we filed here is Oregon is most specifically impacted by this merger. Oregon's unique. The best place to litigate this kind of thing would be in Oregon."

The complaint states that as of 2014, Oregon had 216 craft breweries, with more than 1 million barrels of craft beer produced per year with an economic impact of almost $2 billion.

Frank Male of Frank N Stene's Monster Growlers in downtown Grants Pass relies completely on craft beer.

He has more than 40 taps from kegs supplied by craft brewers along with refrigerators full of their bottles.

"I don't think they should be able to be a conglomerate and have that kind of control," Male said. "I come from a retail background, and I know that shelf allocation is absolutely at risk. It puts distributors in control over the shelf merchandising. All of that is predicated by the influence they're getting. I think there's a risk of pushing the craft beer out, or at least applying pressure, if that's their intention."

John Blood, vice president of legal and corporate affairs for AB InBev, said in a Courthouse News Service article that the complaint is pretty stale.

"The U.S. beer market has never been more competitive, with strong growth from craft brewers, and nothing in this transaction will change that fact. Instead, this transaction provides a compelling opportunity to extend the reach of AB InBev's iconic American brands, such as Budweiser, to markets outside of the United States," Blood said.

Cauble called that a bunch of backwash.

"I can go find a Budweiser anywhere in the world," he said.

"The idea that Budweiser is America's beer is baloney," Alioto added.

Reach reporter Jeff Duewel at 541-474-3720 or jduewel@thedailycourier.com