You don’t need to have your finger on the pulse of the beer industry to have heard the continuing rumors of the two largest beer producers in the world (one by sales, the other by volume) in merger talks. Their recent mutual distribution agreement is widely seen as a precursor to a full-fledged merger. Profits for A-B were up in the 4th quarter of 2007, but the large jump on February 1 is attributed to these InBev merger rumors. (CNN Money: Anheuser-Busch Shares Up on InBev Report)

I’m no pundit, and certainly you can get more coverage from mainstream media sources (CNN, Bloomberg, Reuters, New York Times) and the beer blogosphere (Jay Brooks, and more), but I would be remiss if I didn’t bring it to your attention. Of course, around this time last year the same rumors were circulating, but they seem more strident this time.

There won’t be any in-depth analysis here, but I do wonder what will happen. Assuming the rumors are true, who benefits? The stockholders in the two companies, obviously. The workers at the companies? Generally not. Employees who hold company stock in their retirement plans count as stockholders, of course, but then there’s all the employees who will lose their jobs as the merged company gets rid of “redundancies”. Executives will do well, if only with golden parachutes.

Of course, that’s not the focus of this blog either. We’re about the beer, here. So what about it? I expect there will continue to be experimentation with products in the “craft” space. If only because craft beer is still, at least for the time being, growing at a double-digit rate. Really, though, I expect more of the same. I expect the companies to realize cost-savings by brewing far-away recipes closer to home. Why ship all that beer across the Atlantic when you can brew it at a regional A-B facility and slap the “exotic” label on it?

But, honestly, do I expect any new, interesting, good beers to be produced by this new company? No.

What really concerns me is the smaller brewers; the ones whose beers I love. Instead of dealing with a couple of industry giants and working to find their own niche (and distribution), they’ll now have to compete with a Ginormous Behemoth. Will any niches be left and will they be big enough to sustain the “real” craft brewers? I wonder if we’ll see a contraction in the craft beer space similar to what we saw after the go-go eighties.

I wish I knew what it all means. I can’t ignore it.

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