Farmers accuse AB InBev of reneging on grain price deal

Formal complaint lodged with South African Competition Commission

Reuters has reported that Grain SA, the South African grain farmers’ lobby group, has filed a complaint with the local competition regulator against AB InBev over the price paid for the 2018 grain harvest. AB InBev acquired South Africa’s largest brewer SABMiller in 2016. The deal was approved by the South African authorities on the condition that existing agreements with suppliers would be honoured. Now AB InBev has advised farmers that the agreed pricing structure will change, resulting in a net loss, it is claimed, of 100 rand (€6.75) per tonne.

AB InBev is by far the largest buyer of beer ingredients in South Africa, accounting for 85 to 90% of the country’s malted barley. It also owns 100% of South Africa’s native hop supply and made headlines last year when it reserved the entire harvest for its own use, internationally, refusing to sell hops to smaller South African breweries.

The Competition Commission has declined to comment on the case as it is ongoing. AB InBev have stated that the barley price is reviewed annually and the rate set in 2018 ensures that it remains competitive against wheat in all growing areas of the country.