In early October, Labatt Breweries of Canada bought up Toronto-based Mill Street Brewery, one of Canada's largest independent beer makers.
A week later, Labatt's foreign parent, Belgian-based beer giant Anheuser-Busch InBev, struck a $104-billion (U.S.) deal to acquire its nearest rival, South African-based SABMiller.
And so it goes in the global beer business: Swallow rivals. Loosen belt. Belch. Repeat.
Even after shedding some brands to appease regulators, analysts estimate that the new beer-making colossus will control nearly one out of every three pints consumed worldwide.
More impressively, AB InBev-SAB Miller would dominate nearly 60 per cent of global beer profits.
And that, above all else, explains the business logic of the deal. Forget about developing new brands or innovating. It's a lot more profitable to acquire girth than to grow organically.
Why that strategy is so lucrative is more complicated.
Greater market power allows companies to sustain higher prices, and thus generate larger profits.
Global tastes are changing, and some of the big commodity beer brands, such as Bud Light, are losing their appeal to tastier craft and specialty beers. Beer volumes are flat or declining in most developed countries, including Canada and the United States. But sales of craft and specialty beer are way up. Between 2009 and 2014, beer consumption declined nearly 4 per cent in Canada.
Craft beers now make up 11 per cent of U.S. beer sales, up from just 5 per cent in 2011, and from virtually nowhere a decade earlier.
Comparable figures are not available for Canada. But based on restaurant sales, craft beers are gaining ground here too. While overall sales of beer at restaurants fell 6 per cent last year, craft beer sales rose 7 per cent, according to research by NPD Group Inc.
But the rising volume of craft beer sold is spread over an even faster-growing number of industry players. There were 520 licensed breweries operating in Canada last year, up 70 per cent from five years earlier, according to Beer Canada. In the U.S., the number of craft breweries has doubled to more than 4,000 since 2011.
The trend to craft and specialty beers is putting pressure on AB InBev, which has seen its market share slip to 45 per cent from 50 per cent in the U.S. in the past five years.
Consolidation offers the company easy growth. Global players such as AB InBev bring marketing and distribution clout to the table. Mill Street Brewery, for example, would likely struggle to get its product into bars and store shelves across Canada without distribution help from Labatt.
The same trucks, sales and distribution teams can handle multiple brands. Over time, even manufacturing can be moved to larger plants.
Consolidation is a no-brainer. The profit on every bottle of Mill Street beer sold by AB InBev's Labatt subsidiary will almost certainly rise. The same economies of scale will hold true in mature markets for a wide range of AB InBev and SABMiller brands – from Bud and Miller to Peroni and Stella Artois.
In the short term, consolidation is good news for microbreweries. The best-performing small breweries in Canada will always be targets of the big multinationals, offering entrepreneurs big payouts for the years of hard work in building up a business from scratch.
The rapid growth of microbreweries suggests the Canadian market is healthy, at least at the bottom end.
That may not be so in the United States. The U.S. Justice Department is already probing allegations that AB InBev has been buying up distributors to thwart craft breweries from getting on liquor store shelves.
Antitrust regulators will almost certainly cast a wary eye on the vastly larger non-microbrewery side of the market in the wake of the AB InBev takeover of SABMiller.
Analysts say the Justice Department will almost certainly force AB InBev to sell its 58-per-cent share of a MillerCoors joint venture. Formed in 2008, the combination was SABMiller's effort to compete with larger AB InBev. Left unchallenged, AB InBev would control eight of the 10 best-selling brands in the U.S., including the top four – Bud Light, Coors Light, Budweiser and Miller Lite.
Under the terms of the 2008 arrangement, Molson Coors, which owns the other 42 per cent, can buy back SABMiller's share. Many analysts expect that's precisely what Molson Coors will do, solidifying their market position in Canada and the U.S.
Notwithstanding what regulators determine, further concentration in the global beer business seems unstoppable.