Exact Impact on U.S. Beer Market Unclear

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NEW YORK ( -- The shares of Adolph Coors Co. rose this morning following the company's acknowledgement that it was in the final stages of talks for a merger with Molson Inc.

The merger of the two brewers would not significantly alter the balance of power in the U.S. market, where Coors is No. 3 in market share behind SABMiller and Anheuser-Busch.

Still No. 3
The combined businesses of both Coors and Molson would still be the country's No. 3 brewer.

Last year in the U.S., Coors' share of the U.S. market was 10.8%, behind Anheuser-Busch Cos.' 49.6% share and SABMiller's Miller Brewing Co. 18.4%. Molson commanded 0.4%.

In 2002, Anheuser-Busch had 49% share, while Miller had 19.1%, and Coors had 10.9%. Molson was steady at 0.4%.

Exact market impact unclear
While the merger would result in a larger company, the end result is not clear, said Eric Shepard, executive editor of Beer Marketer's Insights.

"Coors is facing stiff competition from Anheuser-Busch and an increasingly stronger Miller Lite at Miller. Molson won't give it a lot of synergies that are obvious ... to help them address the tough spot in the U.S," Mr. Shepard said. "It's very difficult to be a No. 3 player with a 10 or 11 share, particularly with players as strong as Anheuser-Busch or Miller."

Worldwide, the merged company would become the sixth largest immediately but No. 5 once the Interbrew-Ambev merger is completed, according to Beer Marketer's Insights.

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