Sometimes a deal will turn around and bite you. Just ask Bud Light. In 2012, with this beer dominating the U.S. market, parent company Anheuser-Busch InBev (ABI) moved to acquire a controlling interest in Mexican brewer Grupo Modelo. The goal was to expand ABI’s already considerable global footprint into Mexico and other markets where Modelo was strong. But the Hart-Scott-Rodino (HSR) amendment to U.S. antitrust law meant ABI had to notify regulators of its plans, and they had a problem with the deal, fearing it would consolidate too much market power. Bill Baer—a newly appointed, beer-loving assistant attorney general in charge of the Department of Justice’s antitrust group—forced ABI to spin off Modelo’s U.S. business to another company as a condition for letting the deal happen. Desperate for the international side of Modelo, ABI agreed, selling Modelo’s domestic business to a smaller (by comparison) industry player based in New York—Constellation Brands.
Over the coming decade, Constellation—aided by a growing U.S. Hispanic population—built the Modelo Especial brew into the best-selling beer in the U.S., toppling Bud Light from its longtime place atop the market. If not for regulators (and the power HSR gives them), both beers might have belonged to ABI. As it was, Modelo Especial was already closing in on Bud Light well before ABI’s awkward marketing foray into the transgender debate. Maybe looking over its shoulder at the competition from Modelo caused ABI to lose sight of its own customer base and provided the perfect opportunity for Modelo Especial to finally take the top spot.