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By pricing aggressively, Modelo
-- through its importer, Crown Imports -- puts pressure on ABI to maintain or lower prices. "Today, Modelo aggressively competes head-to-head with ABI in the United States" and "that competition has resulted in lower prices and product innovations that have benefited consumers across the country," the Justice Department court filing said. "The proposed acquisition would eliminate this competition by further concentrating the beer industry, enhancing ABI's market power, and facilitating coordinated pricing between ABI and the next largest brewer, MillerCoors, LLC." The government lawsuit harms the chances of Constellation's related $1.85 billion deal that would land it greater U.S. control of Corona and other beers. Constellation was to buy the remaining half of a joint venture with Grupo Modelo, Crown Imports LLC, that has allowed Constellation to import, market and sell Modelo beers in the U.S. for nearly 20 years. The deal with Constellation was intended to alleviate antitrust concerns. But the Justice Department said that it wasn't enough to protect U.S. beer buyers. Constellation had said its deal would have made it the third-biggest total beverage alcohol company in the U.S. After the Justice announcement, shares of Anheuser-Busch InBev fell more than 5 percent while Constellation Brands Inc. shares lost 20 percent. U.S.-based Anheuser-Busch was purchased by Belgium-based InBev in 2008. The combined company is already the world's biggest brewer and makes Budweiser, Beck's and Stella Artois, among others. Its purchase of Grupo Modelo would have given the combined company annual sales of $47 billion and 150,000 workers in 24 countries.
[Associated
Press;
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