(WASHINGTON) – In a letter to U.S. Attorney General Loretta Lynch last week, Teamsters General President Jim Hoffa urged the Justice Department to reject any remedy to the pending mega-merger in the beer industry that does not address the competitive effects arising from MillerCoors’ decision to close its highly efficient brewery in Eden, North Carolina.
The proposed acquisition by Anheuser Busch-InBev (NYSE: ABI) of its largest competitor SABMiller (LON: SAB) is currently under review by the Department of Justice Antitrust Division, along with the related sale of SAB’s stake in the MillerCoors joint venture to Molson Coors (NYSE: TAP).
“The companies involved, no doubt, would like to see the investigation wrapped up in short order so they can complete their mega-merger,” Hoffa said. “Their desire to expedite cannot take precedence over the need to ‘get it right’ for consumers and working families.”
The Eden brewery is responsible for 12.5 percent of MillerCoors’ production capacity and 4 percent of all beer production in the United States.
“If this closure is permitted to move forward, it will not only affect good American jobs—roughly 500 at the brewery alone—but also negatively impact competition in the industry. The impact on consumers, we believe, will become apparent within months after the transactions take place and is likely to persist for years,” Hoffa said. “Reductions in industry capacity of this magnitude translate directly into higher prices for consumers, particularly in an industry that the Antitrust Division itself characterized in 2013 as not behaving competitively.”
Furthermore, Hoffa suggests, closing Eden is likely to introduce significant inefficiencies and drive down barrelage output in the remaining MillerCoors breweries.
“Particularly damning is evidence, available to the Division, showing that the company decided to close and not sell the brewery because it did not want the facility to end up in the hands of a competitor,” Hoffa said.