Consolidation in the Beer Industry – Will it work?

The beer industry is considered a great industry to be in during a recession. In fact, this current recession has shown just that. Many of the premium brands may not be selling as well as they used to, but they certainly haven’t been hit as hard as other industries. Meanwhile, discount beer brands are screaming and doing quite well. Now we see the brewing industry consolidating a bit, and everyone is wondering if this will boost industry profits, or if some companies will get stuck in a lot of debt, which will actually drive down their share price.

In general, whenever there is a rumor of massive consolidation in an industry, stock prices start to rally a bit, especially if the industry is doing well on quarterly earnings. That is exactly what we have right now, that is the scenario. The reality is that the brewing industry spends a lot of money distributing their products and tons of money on marketing, any time they can consolidate those kinds of costs, they can make more money. And this is what they are investigating at the moment.

Does this mean that a small investor can make money with the shares of one of the companies that is being consolidated? Well, it seems that everyone is talking about consolidating, and they have the merger and acquisition teams working on the plans. Chances are, if you’re not already on a beer stock, you may have missed the boat, because there seems to be a feeding frenzy around that boat, like someone throwing a bunch of live bait into a swarm of sharks. hungry.

Now the question is; Will consolidation work in the beer industry? Will the cost of acquisitions be a good return on investment factor for the companies that make the purchases? After studying the industry for quite some time, it seems so. There are some economies of scale and still ripe for the harvest. Please consider all of this.