Kicking Gallo to the Curb: Guatemala’s homegrown brew losing to InBev

Global Post has an interesting piece on the war to oust Gallo’s monopoly in the Guatemalan beer market. Gallo claims to control between 70-83% of the market, but that is down from 100% ten years ago.

¨But since losing its monopoly, Cerveceria Centro Americana (maker of Gallo) seems to have lost its mojo. It’s hobbled by a family feud and lacks a clear strategy. Now the Guatemalan brewer risks getting absorbed by AB InBev, the world’s largest beer company with about a fifth of the global market.

It’s not surprising. AB InBev could probably be accused of dumping its cheap Brahva beer on the market (although I’m not too sure that the WTO would care much to take up the case). In the bars, it is usually only about 25 cents cheaper, but in stores it is practically half the price.¨

A little history of the beer behemoth, which looks like it is about to get even bigger:

¨A 1999 merger of Brazilian breweries created Companhia de Bebidas das Americas (now AmBev), which then set out for beverage markets across the Americas. Along the way, in 2004, it merged with Belgium’s Interbrew. Together they formed InBev, and they conquered.

 InBev acquired Bud maker Anheuser-Busch in 2008, and a controlling share of the Dominican Republic’s Cerveceria Nacional Dominicana in 2012. In June, it purchased the Mexico’s Corona maker Grupo Modelo. Its profits keep rising.

Now analysts predict a $100-billion mega merger between the world’s two largest producers, AB InBev and SABMiller, Reuters reported.¨

To give you an idea of the uphill battle that Ceverceria Centro Americana has: ¨AmBev’s market capitalization is over $113 billion, more than twice Guatemala’s annual gross domestic product.¨

I guess I’m being nostalgic. Gone are the days, even in Guatemala, when you can just sit down at a bar and ask for a beer. Half the bars in Antigua, it seems, now carry Brooklyn Lager and IPA (at suspiciously low prices—usually around $2.50, but that’s another story). Good for beer snobs, bad for Guatemala.