seconds. now it's become clear since her last vote that the 2 in san bernardino had terrorist ties i hope when. senator murphy makes the unanimous consent request, the other side will support it. >> just a president. >>i come to the lord to join my colleagues because i also believe we should keep guns out of the hands of terrorists. i don't think that applies to law-abiding citizens, but it does apply to terrorists. i have been a strong supporter of the second amendment. in new hampshire, we have a rich tradition of safe and legal firearm ownership. we have a rich tradition of hunting, and sportsmen's activities. like most granite stators, i also support pragmatic and simple ways to keep guns out of

the hands of dangerous people, who would threaten this country, while also protecting the rights of law-abiding citizens. that is what we are discussing here today. have put forward commonsense legislation that adheres to a simple principle. if you are not allowed on a plane, because you are on a no-fly list, because you are suspected of threatening the country, then you should not be allowed to buy a gun. i want to repeat what senator schumer said, because i think people don't think this is real. allow, if you are on the no-fly list, you cannot buy a gun. according to the government accountability office, between suspected terrorists attempted to purchase guns from american dealers at least 2233 times that we know of. cases, 91% ofse

the time, those suspected terrorists succeeded. that is just unacceptable. it is time we closed the loophole that allows suspected to purchase guns. after the horrific tragedy last week in san bernardino, that was carried out by radicalized individuals, it is clear we need to be doing more to prevent violent attacks inspired by isis here at home. closing the loophole in the gun laws is a commonsense thing we can do today. i have heard concerns that the legislation that we have proposed does not allow for adequate due process for those but that is just not correct. the department of homeland security has a process in place to removing your name from the no-fly list. the authorfeinstein,

of the legislation has noted, the fbi office that handles the firearm that ground check system must provide a reason for denial upon request. theniduals who are listed have a right to correct any inaccurate records in the background check system. there is a process in place if people are wrongfully on that no-fly list, to be able to remove their name. i would ask those who oppose the bill, if the no-fly list has not been enough for keeping guns out of the hands of terrorists, why is it worthwhile for protecting commercial airline flights from terrorists? the reasoning is inconsistent. we must come together in the interest of national security to bill,s bill -- pass this closing the loophole in the gun laws. thank you. >> the senator from connecticut. >> thank you, mr. president. we talk in this chamber every

day about the threat of terrorism. many associate threats with airplanes and explosives, but we have seen, in recent, horrifying events in paris and san bernardino, how much tragic wrought by ae small number of people using firearms designed for war. assault weapons that have the purpose to kill and maim human beings -- no other purpose. for me, and for the american aople, common sense says person to dangerous to be permitted on a plane is too dangerous to be permitted a gun. no-fly, no gun. no check, no gun. that ought to be the rule.

it is a commonsense rule. whenever i talk to people in connecticut, they say to me, why didn't the senate approve that rule? there is no common sense explanation. the reason given by colleagues on the other side, that there is some due process violation, is nonsense. i hesitate to say is that frivolous, but it is. number one, there is a right to challenge the designation on the no-fly list through the department of homeland security, which has to provide reasons, and an opportunity to challenge it. also, under senator feinstein's bill, there is an additional safeguard to constitutional rights, because it can be challenged through the department of justice, which is required to establish administrative process, and then an appeal.

a right of appeal to the federal courts. anybody denied permission to buy a gun has the right to appeal. gun,o, the rule no-fly, no is based on common sense, and legal constitutional rights. absolute.in fact, is whether it is the first amendment, or any other right, there is the guarantee in the constitution that there will be reasonable restrictions when necessary to protect the public interest here and here is a case of the public interest clearly deserving protection. if there are problems with any individual being on the list, challenge it. but clearly, having to wait 72 hours for that check, and for

the denial of permission to go forward is unreasonable. urge that we move forward with this common sense protection for the public. i am hard-pressed to think of a more clear and staggering be -- the the god not gun lobby's influence. plainly, the vote last week showed that the gun lobby, unfortunately, still has a hold on thisring calle process. when it comes to law enforcement, they are on our side. i urge our colleagues to heed this reasonable request. no-fly, no gun. if you are on the no-fly list,

if you are too dangerous to board a plane, the constitution says that this reasonable restriction should be adopted. thank you, mr. president. >> mr. president. >> senator from minnesota. >> i ask to speak for three minutes. >> without objection. >> thank you very much, mr. president. when i was a prosecutor, we had one straightforward goal. convict the guilty, and protect the innocent. to me, that simple mission holds true. we must make the world safer by rooting out evil while protecting the rights of people who mean no harm. those 14 people in san bernardino, that american aid worker killed in mali, the innocent families were killed over egypt, and the young people named in paris deserve nothing less.

that means taking out people at its roots, increasing efforts, and leading an international coalition against isis, and it means keeping the homeland safe. heart of that is tightening the visa waiver program. way to get atne this terror that i join my colleagues in supporting today, common sense action to close a dangerous loophole that allows suspected terrorists to legally buy guns in the united states. incredibly, u.s. law does not prevent individuals on the terror watch list purchasing guns. 33 people tried to buy guns between 2004-2014 that were on the watchlist, and more than 2000, or 91%, cleared a background check, according to the information from the government accountability office. i am a cosponsor, and have been

before these tragic events over the last few weeks. to senatoronsor feinstein's bill to close the loophole. during last week's legit debate i joined my colleagues in wouldng an amendment that also has stopped these dangerous individuals from buying firearms and explosives. passing legislation to ensure suspected terrorists cannot buy guns has bipartisan support in the house, where republican congressman peter king of new york has long advocated for this change. terroriststo fight abroad, stopping the recruitment in our own country -- which i know well from my own state of againsta, indictments those going to fight with isis, and also in working to prevent this recruitment from occurring in the first place -- this is all a piece of a very difficult puzzle.

to just close our eyes and say people on the terror watchlist can go out and buy a gun is wrong. we need to do everything we can to ensure that those suspected of terrorist activity cannot buy guns in the united states. i'm hopeful the senate can come together to advance this commonsense national security measure, to keep legal measures out of the wrong hands. inc. you, mr. president. i yield the floor. >> the senator from connecticut. you, mr. president. i am here to join my colleagues in our call to bring for a debate and vote on the senate floor, a measure that is i would argue probably by 99% of my the simple idea that if you are on a terrorist watch list, you should not be able to purchase a gun. i will be asking for unanimous

consent agreement in order to move this debate before the floor. here is why it matters. what we know right now is that over the last 12 months, isis has lost about 25% of their territory in iraq and syria. and is not good enough, hopefully we will be able to join together to put even more pressure on this so-called downhate, to shrink it eventually to elimination. but the growth of isis is dependent on two narratives. narrative that the caliphate is growing, and withd, that east is at war the west. that muslims are at war with the christians. the first narrative is becoming less powerful than the second one, it becomes even more important. asshocking as paris was,

shocking as san bernardino was, it is not surprising in the respect that these attacks outside of syria and iraq are becoming more important. more necessary to this general art -- terror organization in order to perpetuate this second set of mythologies around the being at war eating at wa with the christian world. it is a moment where republicans and democrats have to come hardening ourd country from potential attacks. , and to recognize that because these attacks may be more important than ever before to the future expansion of isis, that we have to take steps to make sure they do not occur. one of the simplest ways we can do that is embodied in senator feinstein's piece of

legislation. let's just say together that those that are on the watchlist -- and this is a list you get on if you have reason for the fbi or other law enforcement to believe you are affiliated in some way shape, or form with a youorist organization -- may not have committed a crime, but you have communications or affiliations with terrorist organizations. let's agree people on that list prohibitedy default, from buying guns. importantly, this bill has provisions that would allow those individuals to get off the list. to be able to say they were put on it mistakenly. fromet's say as a default us, if you're on the watchlist, you should not be able to purchase a gun. recent polling tells us the vast overwhelming majority of americans support this law.

in addition, the vast overwhelming majority of american gun owners support the law. in part, because they have seen the statistics. it bears repeating. the numbers are stunning. 2223 the last 10 years, times, someone on the terrorist watch list has attempted to purchase a weapon. 43 of those instances, they were successful in purchasing the weapon. that is a 91% success rate. it may be that one or two are those -- of those 2000 should not have been on the list. but this legislation gives them the power to contest that and get off the list, eventually. as it should. let's not live in a fantasy world in which the majority of people on this list should not be there. this list is not foolproof, but 99%, aremajority, there with reason, and they

should not be able to walk out of a store with a weapon. that is why 90% of americans support this legislation. while today it has become --tisan, republicans standing in lockstep against a bill to stop terrorists from getting guns come historically, it has been bipartisan. this was initially proposed by president bush, and then attorney general alberto gonzales. let's make it bipartisan again. let's decide we will have a debate on this, and we are bringing it for a boat. that is where the constituents are. they want to take steps together from gettingrists guns. i ask unanimous consent that the judiciary committee be passed from further -- i asked adobe read a third time in the motion to reconsider be

considered on the table with no intervening action or debate. >> mr. president. reserving the right to object, the court in substitute amendment that is at the desk. >> does the senator modify his request? >> reserving the right to object, it is my understanding that this substitute would require the federal government to go to court in order to stop someone on the terrorist watch list from purchasing a weapon. default, we should all agree that if you are on the terrorist watch list, you cannot walk out of a gun store with a gun. it simply should not be incumbent upon the federal government to go through a court process in order to stop you. there are ways in which if you should not be on a list, you can get off. but there is absolutely no reason to delay the process of stopping one of these would be

terrorists from getting a gun, by requiring a complicated court walkss every time someone into a gun store that is on the watchlist. for that reason, i would object to the motion to modify. >> the majority went. -- whip. >> mr. president, i am astonished that a proposition of our friend, the senator from onnecticut, that you can be a secret watchlist by the federal government, and just by virtue of this secret listing of an individual on a government watchlist, you can be denied some of your core constitutional without any necessity of the government establishing probable cause or producing evidence that would justify the denial of a court constitutional right. i guess if it is good enough to take the government's word by

this list, without proof or showing probable cause to deny a rights or constitutional under the second amendment, then i guess that is good enough to deny your right to worship according to the dictates of freedom ofence, speech, freedom of association, all of the other rights enumerated in the cost efficient. .t is an outrageous proposition i would say to my friend, if these people are on this watchlist are truly dangerous, why isn't the obama administration and justice department indicting them, taking them to court, trying them and conduct -- convicting them of crimes? instead, you have this secret watchlist, without any proof, without any evidence. the senator has mischaracterized the amendment i

proposed last week, in which i have offered by unanimous consent. what would happen is if an individual goes to purchase a gun, there will be a criminal background check system, that would access the watchlist. if the department of justice was worried based on that note is somebody was attempting to buy a for then they can intervene 72 hours to stop the individual from purchasing the gun. if they were worried about this individual further, they could go to court and produce before a federal judge evidence to justify the detention of the individual, to take them off the street. this is a complete response to the concerns raised by our friends across the aisle. i will tell you what is really motivating all of this. first of all, the feinstein amendment which was authored

complete, was a substitute to the obamacare repeal bill we voted on and passed last week. means, athis was a surreptitious means, to defeat obamaility to repeal the nation, known as obama care, which has only 37% approval rating. agues across the aisle dmie knew that. under the senate procedures, a complete substitution to the reconciliation bill that we passed last week, would have been accomplished if the feinstein amendment were agreed to. but they went even further and are trying to distract the american people from the fact that the president of the united states and commander in chief has absolutely no strategy to deal with the isis here in the united states. i presume the immediate motivation was what happened in san bernardino, this terrible

tragedy. but our colleagues across the aisle are trying to capitalize on that particular tragedy in order to justify this unconstitutional attempt to deny american citizens their core constitutional rights without any proof and without any evidence. i would just add that if our freandz crosfriends across the k that this watch list is so perfect and so infallible, they ought to read an editorial that was produced by "the new york times" in 2014. where the american civil liberties union and others objected to the watch list as being a secret government list without any evidence or any proof. they cited a 2007 audit of the 71,000 people on the watch list

on, the government watch list, and noted that half of those 71,000 were erroneously included in the watch list. so we all understand what's going on here. this isn't about finding solutions to real problems. this is about trying to change the subject and to detract -- distract the american people from the fact that the president and this administration has absolutely no strategy to deal with the threat of isis. and the president tells us merely to stay the course. so i understand what's going on. i also would say that the main -- the other main purpose of our friends across the aisle, other than to defeat our ability to repeal obamacare, which we successfully did in the senate last week, this is to create a "gotcha" moment for senators and candidates that are running in

2016. already the senator from connecticut's appeared on national news shows. the president of the united states on the -- his weekly -- weekly speech to the nation. the senate democratic leader have already misrepresented what was in the cornyn substitute to the feinstein amendment last week. to suggest that people who voted against the feinstein amendment really, really wanted to make sure that terrorists got guns. that's an outrageous accusation and it's -- it's as false as it is outrageous. so i think it's pretty obvious what's going on here. this was an effort to undermine our ability to repeal obamacare. it's a effort to distract from the fact the president of the united states, the commander in chief, has no strategy to defeat isis. in fact, the democratic leader

yesterday said, really what we need is an isis czar. an isis czar? i thought that's the job of the commander in chief, the president of the united states to fight and win the nation's wars and to keep us safe here at home. give me a break. and then this foolish idea that we ought to just simply take the federal government's word without any proof or any necessity of producing evidence in a court of law and meeting some basic minimal legal standard before we deny american citizens their core constitutional rights is just outrageous. so, mr. president, i -- i think it's pretty obvious what's going on here and i think the americae the american people render their judgment. for that reason, i object.

the presiding officer: the senator from connecticut. mr. murphy: i ask unanimous consent to speak for five minutes. the presiding officer: is there objection? without objection. mr. murphy: thank you, mr. president. the senator is correct, that last week senate democrats out that it was more important to talk about terrorism than was to talk about the repeal of the affordable care act for the 16th time in the united states senate, 55 to 60 times in the house of representatives. we did think that it was more important last week to be talking about stopping terrorists from getting weapons. and i'm sorry that we didn't find that bipartisan consensus last week. but what we're talking about here today is a different threat than we've ever seen before. and what we want to do is to stop terrorism before it happe happens. so the senator from texas is right that many of the individuals on the terrorist watch list have not committed a crime. but in order to get on the terrorist watch list, you have to have been in communication

with those that are trying to create radical jihad here in the united states. and so by denying those individuals from getting a weapon, you are serving to prevent a terrorist attack from happening. why would we wait until after the terrorist attack has occurred mured t in order to std from buying a -- to stop that individual from buying a gun? this provision precludes individuals from that list if you're not on it. it is our tradition of supporting the right of law-abiding citizens to buy and purchase a weapon, but to suggest that the only pathway to stopping an individual from buying a weapon is a criminal prosecution when we know there are people right now in the united states that are in contact with radical ideologies, may be contemplating attacks

against the united states, misunderstands the way in which we are going to prevent future terrorist attacks from happening in this country. and, mr. president, this notion that those of us who want to change the law in order to better protect americans are capitalizing on a tragedy? that's ridiculous, and it's insulting, frankly. a lot of people say, you can't talk about policy changes when it comes to guns right after a mass shooting. you know what? there's been a mass shooting every single dmai this country, on average. if you had to wait 24 hours or 48 thowrgs tal hours to talk abt strategies to keep people safe, then you'd never talk about people safe because there is a mass shooting every day separateway from the people who die from the drip, drip, drip, of gun values al violence all as

country. i don't think any of us mean to suggest that those who oppose this bill supported by three-quarters of american gun owners, 90% of americans, are rooting for terrorists to get guns. that's not what i'm saying. but what i am saying is that those who oppose this are more concerned with protecting the rights of potential terrorists than they are protecting this country. because that's what we're talking about here. we're worried about the rights of people on the terrorist watch list more than we are about taking steps to protect this country. because what we're talking about is a temporary inconvenience. if somebody is on this watch list who shouldn't be -- and it is a very small number -- then they have, through this legislation, a means to get off that list. and so they have to wait a

couple days, maybe a couple weeks in order to buy a weapon a tiny mu number of people who e inconvenienced is the cost of protecting the country from potential terrorist attacks is the benefit. that's a trade that my constituents would take in a heartbeat. i'm sorry that we aren't able to proceed with a debate on this bill, but i think i can speak for my colleagues that we will be back on the floor in the days and the weeks and the months to come to continue to ask for a vote on simple legislation to make sure that potential terrorists cannot get their hands on dangerous life-ending >> tonight on c-span, a proposed merger of the two largest beer makers.

members of the house gun violence task force hold a hearing on gun violence prevention. on the next washington journal, we talked to congressman walt ontman -- rob rittman national security threats. crowley onive joseph newly proposed gun control legislation, and homeland security. elizabeth burson discusses her regulation oflax toxic chemicals. washington journal is live with uncles, facebook comments, and tweets, at 7:00 a.m. eastern on c-span. >> the tv has 38 hours of -- a book tv has 38 hours of nonfiction books and authors every weekend. saturday night at 10:00 p.m. eastern, nurse and new york times columnist theresa brown discusses her book.

it gives readers a first-hand account of her experience in patient care and safety. executiveerviewed by director of the american nurses association. >> health care is only going to get more and more complex. we are just going to need better and better nurses to meet all those complex needs. usnking about how to keep strong and healthy, and encouraging that is huge. we don't really emphasized that. >> on sunday afternoon at 1:30 p.m. eastern. >> politics, which i have been part of all my life, was not so different from the world of petty criminals, robbers and racketeers, but it was disguised see.ss obvious to

in fact, for 25 years in my career, i have looked at america as an idea. i have defended american principles, the american dream, the american founding, and i have looked at american politics as a debate. the republicans believe in liberty. democrats believe inequality. republicans want equality of rights. democrats want equality of outcomes. it is the point of view of the criminal underclass that this way of looking at american politics is complete and total nonsense. >> he examines america and american politics in his newest stealing america -- what my experience with criminal gangs taught me about obama, hillary, and the democratic party." author lawrence lessig talks about his experience running for president and campaign finance. ,he central theme of his book

the corruption of equality and the steps to end it. we are supposed of a democracy where we are equal participants. but members of congress spend 30%-70% of their time raising money for the tiniest 1%. they can't help but be more focused and concerned on that tiny fraction. that is a system where this basic equality is denied. weekend book tv all come every weekend, on c-span2. beer company anheuser-busch in the is seeking permission to buy rival sab miller. they are the world's two largest companies for beer. the judiciary committee held a hearing on the merger and potential effect on competitors and suppliers of raw materials to the brewing industry. senator mike lee chairs this two-hour hearing.

>> welcome to the hearing. we have chosen that ensuring competition remains on cap, the merger and the state of competition in the beer industry. before we start, i would like to thank the ranking member and her staff for their attention to this issue, and their assistance in preparing for today's hearing. i would also like to thank the chairman of the committee for supporting the hearing. a few housekeeping matters i and we begin, after senator leahy give opening remarks about this hearing, we will hear on the panel of and senatorho i grassley wondered if shortly and then we will have five minute question rounds. hearingect of today's

is the proposed acquisition of sab miller by anheuser-busch inbev. the second largest and largest year producers in the world, respectively. anheuser-busch announced the acquisition for 105 billion dollars on november 11. concurrent with that transaction, the parties for thed the plan joining. that state represents the entirety of sab miller u.s. presence. as a result, the parties expect the merger to have little, if any impact, on the american beer market. if true, this will obviate the ast majority of concerns that would otherwise accompany a merger of this size. other market participants have voiced concerns about the influence on distribution channels, and in market access allegingcraft brewers, that anheuser-busch in seeking

vertical integration and attempting to exclude craft rumors from the market. as we examined the central questions today, and look at the overall state of competition in the beer industry, we must focus that review on how the current competitive dynamic will be impacted by the deal at hand. this analysis must consider both components of the transaction, the acquisition as well as the divestiture of sab miller's business. we will do well to remember that antitrust analysis is fact intensive, and not driven by mere speculation or suggestion. while legitimate antitrust concerns may exist with risk to anheuser-busch inbev relationship with distributors, this hearing is about the acquisition of sab miller. under the clayton act, the relevant inquiry is whether the effect of the deal may be substantially to lessen can't -- competition or attempt to create

a monopoly, not whether conditions might be attached to the merger's approval to restructure the market to the leggings of the government or private plaintiffs. when the acquiring party intends to divest the entirety of the 's u.s.d company business, the effect on american markets are likely to be negligible. the american beer market is a more than $100 billion business, and delivers a product that in both national brand and regional holds aew forms, special place in american culture and hospitality. today's hearing will provide a much-needed opportunity to assess competition in the industry, as it relates to this particularly historic deal. i look forward to hearing from our esteemed witnesses in the productive discussion that their testimony will no doubt inspired today. issue herobuchar will opening statement, and then i will introduce our witnesses

after senator leahy. >> thank you very much mr. chairman. we have worked on this hearing together, as we have on all hearings, and i appreciate the partnership we had taking on these important antitrust matters. i want to thank each of the witnesses who have come to testify. i do not come to the hearing with a conclusion, but i do have a goal. that is to protect and foster competition. from one perspective, there has been consistent consolidation in the beer industry. over the last decade, anheuser-busch, miller, and coors has been involved in major acquisitions. today, anheuser-busch inbev, what was anheuser-busch, and sab miller account for 70% of your sales in the united states. within the remaining 30%, different phenomenon is occurring. across the country, craft brewers alliance. new competition to the united states

market. in 1978, there were filled -- fewer than 50 brewers. by one recent count there are over 4100 craft brewers and the sales have grown from 1% of the beer market, to 11%. in minnesota we have more than 70, more than the entire country had in 1978 when i graduated from high school. it was not legal for me to drink then. let's just say you could go to wisconsin. [laughter] stretch too many places and everything in between. i will say this was the first official senate tours

that my husband asked to accompany me on. have succeeded because of a three-tier system. distribute and retailers sell it. most wholesalers are independent, but rely primarily millerproducts or products. wholesalers also distribute smaller independent brands, as a --ult of within this context, abi, the world, brewer in the seeks to acquire sab miller, the second largest in the world. the size of the transaction is not only cause for concern, the department of justice is investigating abi's previous acquisition of modell of group, found that large viewers engage in "significant levels of coordination, and that coronation has reduced competition and increased.

prices." the merging parties recognize that and have offered to divest sab miller stake in the miller coors joint venture. that is why we have asked to to understand-- how it intends to compete. today is whether the proposed the best teacher resolves all competition problems. because the market is highly concentrated, deed of the -- for the divestiture to be successful, miller coors needs

to be successful from abi after the merger as it is today. we also need to make sure nothing alters the incentive or the ability for large brewers to foreclose retail access from craft brewers.unless craft brewers have access to wholesalers, they will wither on the vine. wholesalers make decisions every day on what brands and how much of each brand to put under truck. i want to ensure the consumer choice, and not producer power, drives those decisions. the beer industry is moving in a good direction. small, innovative companies are transforming the marketplace from vermont to minnesota. although the craft segment may be beyond infancy, it is far from the church. we need -- far from mature. we need to ensure the competition and that depends on the quality of the divestiture. >> thank you, senator leahy. >> i want to thank you and

for thecarpenter -- hearing. i could legally drink in 1978. i'm definitely older than my colleague from minnesota. i would say at this hearing, on the proposed merger of anheuser-busch inbev and sab miller, is important, not only to american consumers, but to craft brewers and independent distributors across the country. vermont was one of the earliest incubators of craft brewing. we have 40 breweries now. we are a state of only 600,000. people. some of them are award-winning award winning beers, and people travel from all over the country to visit. --course, they have made

have improved our economy. just one more thing making vermont a destination state. we want to make sure these craft rumors are also the brewers of tomorrow -- these craft brewers and the brewers of tomorrow can compete. this merger would join to giants of the industry. they are 70% of the u.s. market. we will address some of the concerns we have. i think if you still look at the size of what is left, we have to look at the action. i want to know how it will operate in practice. what other consequences will there be for the market, and given the practice of big

brewers by using small craft breweries. we also have to consider competition in the market for hops, barley, glass, and aluminum. you are not going to be able to compete if you cannot buy those things, because the giants have cornered the market. i want to hear about concerns in distribution, especially concerns about large brewers' power over distribution. with a number of independent brewers in vermont recently, and they pointed out that you can only sell a product if if customer can find it. they are being squeezed off of the shelves because of restrictive behavior by dominant and that harms competition, and eliminates consumer options.

there are a lot of things here -- the basic material of the beer, the distribution. brewers influence this is by buying it. inbev indicates it will not increase ownership above the current level of 10%. i would ask you to make a formal commitment to that. gains ownership of miller coors, it will not increase its ownership of distributors or change the current practice of giving distributors leeway to showcase competitors brands. formalyou make a commitment to that today. it will certainly influence how i feel that this merger. -- from thefor him brewer to buyer is critical, if

small companies can compete. state laws vary dramatically. many small brewers feel constrained by the current state of distribution. i hope that will be under close review. anyway, as a vermonter, as one who is proud of these craft brewers in my state, we will see what the activity does. i want to make sure they have a level playing field. if they make a bad product, it doesn't sell. if they make a good product, it should sell. i don't want them to be closed out because they can distribute it or they cannot get the basic parts they need. thank you, mr. chairman. >> thank you, senator leahy. i will ask the witness is to stand. to stand.es dui from the testimony you are about to give before the committee will be the truth, the whole truth, nothing but the truth, so help you god? thank you.

begin introducing the witnesses. i will start with mr. brito. he is the chief executive officer of anheuser-busch inbev. he's a brazilian citizen. he earned an mba from stanford university. he held positions that shall and other -- shall. financeoles in compositions and sales before chief officer in january 2004. at in appointed president bed in january, and chief executive officer in december 2005. he's also a member of the order of directors. mr. pease worked at the brewers

association for over 21 years. politicalegree in science from the university of colorado and a married -- member of the american society of association of executives. he is a certified kids trainer. is executive officer of the national beer wholesalers association. he serves as a member of the u.s. chamber of commerce's theciation of 100, association of executives council of the national association of wholesale the pricers, and harlow's foundation of board of governors. he served as a guest lecturer at

the university of north carolina and george washington university, and university of oklahoma. a native of oklahoma, he is a graduate of the university of oklahoma. senator grassley would like to introduce the witness from ila. -- iowa. j i am happy to introduce wilson. he is a constituent of mine. he is from a small community. he represents the island who ire skilled, representing -- brewers'guild. he is a published author and for online publications. i appreciate the chairman inviting mr. wilson said he can give a small business perspective on the possible impact of a proposed acquisition on the marketplace and the american consumer. >> thank you, senator grassley. diana moss became the president of the american antitrust

2015.ute in january her work spans antitrust and regulation with industry expertise in electricity, petroleum, agriculture, and health care. , she was aing aai senior staff economist at the federal regulatory commission where she could and needed competition analysis for electricity mergers. from 1989 to 19 84, she consulted in private practice in the areas of regulation and antitrust at the national economic research association. dr. moffat spoken widely on various topics on antitrust and testified before congress, appeared before stay in regulatory commissions, and made numerous radio and television appearances. she has published articles in a number of economic and legal academic articles.

she is editor of network access regulation and antitrust. at theadjunct faculty university of colorado at boulder. she has an ma degree from university of denver and the phd from the colorado school. next has spent the last 32 years -- mr. hunter has went 32 years in general management positions. coorssident and ceo of brewing company in denver, colorado, he leads one of the world's leading beer companies with extraordinary brands like coors. the purpose is to delight the isld beer drinkers and mark a passionate believer in championing beer and building responsiblethe drinker. we will hear opening statements from the witnesses, beginning with mr. brito.

mr. brito: thank you. you member leahy and members of the subcommittee. thank you for your opportunity to appear before this subcommittee. beth -- of abn anheuser-busch inbev. it is the parent company of anheuser-busch. i have the privilege of continuing the proud history of brewing in america since 1862. we have more than 60,000 u.s. employees across 49 states, and we are committed to investing an additional one and a half billion dollars by 2018 in our u.s. operations. i am proud to say 98% of our products sold in the u.s. are made in the u.s. the here today to discuss proposed acquisition of sab miller, and our agreements with

coors to divest the interest in miller coors, conditioned upon completion of culmination with sab miller. i would like to share with you the rationale for this or lackion, the impact, of impact this transaction will have on our competitive position in the u.s. the purpose of this is to enhance our ability to serve new markets, particularly in africa, asia, and central and south america. it is about bringing more choices to more consumers around extending including the reach of iconic american brands such as budweiser to new markets. what this combination is not about is changing the competitive landscape of u.s. beer market's. the u.s. beer industry is more competitive than other -- than

ever, with more than 4000 breweries. on average, two new breweries open every day. aisleake a walk down the of your local grocery store and you see an incredible amount of choice. beer drinkers have more than ever before. this competition is being byven, first and foremost, the growth of craft brewers, which rose from 3.8% of the --ket in 2007, 211% in 2014 in 2014. the beer industry faces competition from wine and liquor. the combination with sab miller will lessen the competition. of miller coors ensures the market share in the u.s. will not change as a result of the combination.

our total beer condition -- production will not increase. and suppliests will not change. our distribution system will not be impacted. our commitment to the three-tier system will not waiver. beyond the transaction, let me address to other topics within the industry. distribution and ingredients and supplies for beer. i would like to state clearly that we do not expect any changes to the anheuser-busch distribution system, as a result of the combination or divestiture. 3300 are approximately wholesalers across america. in more than 35 states, they allow for some form of self distribution of. -- of beer. this ensures that brewers of all sizes can access the market. our intention that approximately 90% of the volume

be distributed right independent wholesalers. around 10% of the volume will be distributed by our distributorships. in addition to a strong independent distribution tear, markets thator brewers rely upon, including aluminum cans, barley, and helps. -- hops. these are generally produced with large, highly responsive, local, and national, and global markets. with a combined company in a position with constrained competitive access to build ingredients and supplies. the marketplace sets the prices in terms of ingredients and supplies. in closing, we are proud of our contribution to the highly competitive u.s. earmark it,

>> the combination will bring more choices to consumers. look forward to today -- a day when american travelers can find it anywhere in the world. again, thank you for the opportunity to appear before you. i look forward to answering your questions. >> thank you, sir. , chairmanirman grassley, members of the subcommittee, good morning. and andis bob pease, the chief executive officer of the brewers association. it represents over 2800 small and independent craft breweries. my members are located in every state, and virtually every congressional district. at the outset, i would like to make it perfectly clear that the brewers association is not opposed to fair competition.

my members have built thousands of successful small, and medium-size businesses from scratch. failed at great personal loss. my members are the embodiment of the american entrepreneurial spirit. understand that antitrust laws were designed to protect competition. they not designed to protect any specific individual company, or any segment of the industry. of sabposed acquisition miller of -- by anheuser-busch inbev must be viewed. to understand the competitive landscape we need to review the basic regulatory framework. the 21stlcohol lost amendment of the u.s. constitution authorize each state to regulate beverage sales and distribution within their respective borders.

that is important because the beer industry does not operate under the normal to both of interstate commerce. beer, and other alcohol beverages a subjected to 50 different state regulations. others mandate the use of beer wholesalers and prevent the brewer from changing wholesalers absent extraordinary circumstances. state laws were intended to protect the independence of wholesalers. if the wholesale tier is truly independent of the major brewers, it can promote competition. that's the goal has been supported by other developments. largest international brewers now control over 70% of u.s. beer sales. they have actively foster the rapid consolidation of the wholesale tier and the evolution of the multistate wholesale networks under common ownership. today, the 30 largest almost one control

third of all u.s. beer sales to retailers. the u.s. are now served by only two substantial wholesalers -- abi and a miller wholesaler. while they're generally known by the names of their larger suppliers, the wholesalers will also sell other brands. will so corona, sam adams, and dozens of others. brewers faceraft significant challenges in getting access to retailers and consumers. have failed to respond to changes in the beer industry, to the detriment of new competitors. over the last three decades the federal trade commission has consistently and repeatedly orled for states to enact refusing to change blatantly anti-competitive distribution laws. most of which are still on the books. they are aggressively enforced. totes have granted exception

allow limited self distribution by craft brewers. those are insignificant in terms of the overall market, and totally inadequate to address the imbalance it currently exists. in 15 states, large brewers are allowed to own wholesalers. at present, anheuser-busch inbev is the largest supplier added nine state it is the largest beer distributor. in major population centers in the nine states, it effectively controls one of the two routes to market that crafy t brewers must use. they enjoy the same privileges as franchise protection that were intended to protect independent wholesalers. abi has further diminish the independence of the wholesale is that it does not own through several different strategies. has a subsidiary the finances wholesale acquisitions and consolidation. also maintains incentive

programs to provide millions of dollars to wholesalers that severely limit the sales of brands of competing beers. as a condition of approving abi acquisition of sab miller, we believe they should be required to divest. they must refrain from disturbing other issues of beer. these will further strip competition and access to market for the smallest players. such as government oversight could take years of effort. lusion, the department of justice must also closely scrutinize abi's activities for goods and services used by brewers.

its increasing global presence has many opportunities. we ask we hard questions to support antitrust enforcement and fair competition in the beer industry. on behalf of the 4100 small independent craft breweries and their 100 15,000 employees, i thank you for the opportunity to appear before you today. >> thank you, sir. >> thank you, chairman grassley, chairman lee, ranking members of the subcommittee, on behalf of the nation's independent beer distributors thank you for the opportunity to testify today. there is no question that america is in a golden age for beer. with unprecedented variety and quality offered by more than 4000 breweries compared to fewer than 50 in the 1980's. sales grew by 15% in 2015 representing more than 11% of

the beer market. you would be hard-pressed to identify another industry that is experiencing the same explosive growth i in such a short period of time. the true winner is the american consumer which is a broad spectrum of and badly produced beers for every taste. but what makes this choice possible? the answer is a robust and competitive system of independent distribution. are wholesalers providing access to markets for brewers of all sizes. they create the competitive playing field and keep pricing fair for consumers. a critical issue is out to preserve america's golden age of beer and be effective independent distribution. ,ow, consumer advocates retailers, and independent servitors have all expressed concern about the global

transactions around the abi -- sab miller tie up and how it could access -- reduce access to distribution. included with my written study by thea boston consulting group which finds that americans independent beer distribution system is "open, really competitive, and driven by consumer choice." independent distributive provide access to capital and scales. also take on responsibilities including warehousing, marketing, promotion, sales and delivery of a heavy perishable product. have solids time-tested relationships with retailers in their markets. from the corner pub on main street your hometown grocery store -- in other words, distributor interests perfectly aligned with that of the american consumer. allow me to provide a snapshot

and contrast that with other beverages. think about walking down the beer aisle in your favorite store. think about the vast choice in selection might only store shelves from the most familiar and iconic national brands imports from around the world. americaninnovative craft beers. now head over to the soft drink aisle. you pretty much have a choice between two suppliers -- quite a contrast between the beer aisle in the soft drink aisle. thee are concerns that proposed acquisition could result in less craft beer and fewer imported brands getting to market. abi'se thing, consider recent purchase of some of the independent servitors. anheuser-busch inbev is the fastest-growing distributive in the country. the very day the merger was revealed was announced the department of justice for investigating some of the recent abi acquisitions.

suggested that the business tactics could stifle growth for independent distributors who represent brands that are not approved by abi. it is also worth noting that the department of justice placed restrictions on abi's previous acquisitions of modelo to protect your beaters and consumers. abi claims that the proposed the vestige or salts any competitive problems. if some of cast the doubt that the proposed sale of sab's stake .ould be an effective remedy recent studies show that they fail to deliver consumer benefits, and the modelo deal underscore the limitations even of judicial intervention to reach a reasonable remedy that included vertical restraints. in order to ensure they combination -- a combination does not disrupt the bill market -- beer market, the need to do

the following. protect independent distribution as a result of this global combination. must make, they certain the independent distributors are free to provide their best efforts to all brewers and importers. let me say that again -- they must ensure that these independent distributors are free to provide their best efforts to all brewers and importers. i look forward to answering your questions, and thank you for the opportunity to join you this morning. >> like a very much. -- thank you very much. >> i would like to thank subcommittee as first the chairman for this opportunity. i speak him behalf of over 50 ibg members and perhaps thousands more brewers along the world that share our concerns about the anheuser-busch inbev acquisition of sab miller. our disquiet is twofold. if this deal is allowed to

proceed, growing craft breweries in iowa and elsewhere feared difficulty with access to both markets and run material. critical to our success it was the repeal ofwing prohibition to curtail overly aggressive sales and marketing practices. with the help of this wholesale tear, our memories have created new i will brands. our colleagues in the wholesale in iowaiowa -- tier movementaced the craft at a time when demand is asking that these beers the made available to them. like many brewery owners i've spoken to independent wholesalers have also expressed apprehension about the pollock power -- power a larger abi

would hold. they already hold sway over many wholesalers, the amount of influence a combined company of this magnitude would have over market access is startling. this is especially the case given their past actions towards vertical integration in countries like brazil, and efforts to procure wholesalers here in the u.s. currently, the fastest-growing wholesaler has acquired 12 independent distributors since 2 012. according to a june, 2002 article, busch family members own five additional distributions carving a market shares as high as 74%. made headlines in the st. louis post-dispatch and march of 2013 when it dropped six craft breweries from its portfolio. they asserted that these brands are underperforming, and owner

indicated in the article they would not deliver the craft beers he ordered. i haven't had a single case of second shift in here in almost a year. despite the fact that i ordered three varieties every week, week after week, for six months. my proximity in french up of the owners of one of the effective breweries, nebraska brewing company, i am privy to how the situation was handled. at this time, they no longer sell their award-winning beers in the st. louis market. beer markettate's has been hit especially hard by their aggressive tactics. abs w in acquired washington, according to heather hostilethe guild's tactics of drones of egregious that now drawn the attention of and in investigation by the washington state liquor and cannabis board. please refer to my written testimony for specific examples of what is happening in washington state.

while market access is an ongoing battle, they offer a wide range of locally produced products. the ability to package them but soon be hindered if the market merger is allowed. this mega brewery would have a greater impact on multiple and hops and packaging materials. the hop supply is already tenuous. acreage isf hop costly and it takes three years to reach maturity. if there is a shortage, the price per pint will rise for consumers. as the craft brewing industry continues to represent job in sales growth in an otherwise flat sector, they may encounter problems as this acquisition proceeds. i favor healthy competition, but a merger of this magnitude could impact the supply access and threaten the wholesale tier of the system. we recommend the divestiture of abi distributors and i hope to

incentives designed to push other brands out of abi distributorships and a careful monitoring of how the transaction will impact raw materials. thank you. >> i would like to thank chairman grassley, and the ranking member and the members of the subcommittee for holding this hearing. i appreciate the opportunity to share the antitrust institutes views on the beer industry and the proposed merger of abi and sab miller. highlights the beer market against which the merger will occur. there have been five major mergers in the last 10 years. of the u.s.ver 70% market. there was that economic evidence of price increases in the wake of previous mergers even against declining demand for popular mass-market beer. these developments pose drill challenges for competition, --

real challenges for competition. preferreders the traditional mass-market beers, or those that grow for much of an oil businesses, the goal should be to ensure competitive prices, choice, and quality. we know the anheuser-busch inbev would produce a market concentration. if on remedy, the merger would result in stronger incentives to markety -- exercise power. given what we know, the debate here is not whether it is likely to lessen competition, presumably if the merger were not potentially harmful the parties would not have offered 's front to divest sab miller share. thefocused attention on

substantive debate about whether this proposal would make for an effective remedy. for example, it is unclear excuse me -- an effective remedy for liver stores lost by a merger. examples now multiple of failed remedies especially in highly concentrated markets -- buyers have divested access -- assets have proved unviable. these cases are warning signs. in a anheuser-busch inbev and , it would merger promote competition moving forward. the parties may will reveal more of their divestiture proposal when the time comes. now, based on publicly available information, it is not clear how or whether the current divestiture will accomplish this objective. it is unclear how the independent distribution contracts currently controlled by miller/cores will be handled.

as compared to abi, sab miller has taken a less adversarial approach to distributors that kerry rival brands. the loss of this dynamic after the merger is important. it should focus attention on the distribution policies that molson coors will adopt. it was concerned that there -- they not be a moving target. a closure of a plant in north carolina raise questions -- is it a preemptive attempt to withdraw capacity from the market? it would change the package of assets that molson coors takes it vantage of best control of. it is unclear what sab miller bradnds not currently imported may be imported after the merger. particularly one that includes more craft beers could change incentives for strategic conduct by the merger company toward

smaller rivals. these are major sources of uncertainty over the proposed divestiture. given the magnitude of the we believe more specificity is needed. a fully effective remedy would address at least a number of issues. for example, a remedy would create a fully independent molson coors. it would therefore not depend in any way on abi for contract brewing or similar supply agreements for any services. equally important is to ensure the independence and impartiality of the independent whole cell distribution be should channels. policies designed to incentivize independent distributors to be exclusive or discriminate against smaller rivals would be prohibited. abi and molson coors should compete head to head in the independent distribution channel. tacitzing any chance for coordination. as such, some thought to be given to whether distributors

can carry both abi and miller coors brands. these are just a few considerations that will factor into a remedy that will fully restore competition lost by the merger. there are likely to be other considerations. thank you very much for the opportunity to testify. >> thank you. >> good morning, chairman lee and ranking member and members of the committee. my name is mark hunter and i'm the ceo of molson coors brewing company. we are u.s. listed company primarily based in denver, colorado. i appreciate the opportunity to explain our role in serving as the solution to u.s. antitrust concerns related to the proposed anheuser-busch inbev, sab miller merger. our transaction is not injure competition, but enhances it. the purchase of the remaining interest means abi gets nothing in the united states. miller coors will remain

unchanged after the merger. the only difference is that molson coors will be the single u.s. owner rather than a partial owner of miller coors. having played a crucial role in the direction of this business for the past seven years, there is no company more knowledgeable than molson coors to operate it going forward. before i get into specific comments, i want to tell you that molson coors and the creation of miller coors and how inhelp support competition this increasingly dynamic beer industry. molson coors was created in 2005 and brought together the family brewing legacies of john molson in montreal and eat all scores -- edolf coors in colorado. we created a more effective flair in the brewing market. operation was contributed to the joint

venture. molson coors owning 42%, and sab miller owning 58%. miller coors has approximately 8000 us-based employees and pays more than one $.1 billion in annual compensation and benefits. we spend more than $5 billion annually for goods and services and pay more than $1 billion in federal excise tax. miller coors goes to market for a independent market of 569 district readers who know how deeply we value this system. we have received positive feedback from the sister bidders because they also now they can continue to access a wide range of beer brands including craft brands. by way of example, miller coors owns only one distributor. brands from 2925 suppliers, and oma 67% of these

brands are craft brands. to be clear, we have no intention of purchasing other distributors. but a miller coors and molson coors take seriously our role as an economic growth engine for employees and the many businesses that support us. this will only be enhanced through single ownership of the u.s. business. for example, growth with allow miller coors to raise production in its nine u.s. breweries. it would open up opportunities to purchase more barley from the western states. it would allow the company to spend more on hops from washington as well as from iowa and illinois. has been successful in building miller coors into a strong number two player in the u.s.. it is important to note how much the beer industry has changed. the craft brewing industry in the united states has grown very rapidly over the past few years.

5525 june, there were active breweries registered. the growth of craft has helped trigger a renaissance in beer. it is great that a diverse and competitive market. in closing, nothing changes for our consumers, district readers, or community as a result of our purchase of sab miller's ownership interest in miller coors. it will not change consumer choice, it will not change the competitive pricing environment, it will not change our market share or our long-standing support for the three-tiered system. it will not change the support of u.s. growers and suppliers, and will not change the explosive growth of craft brewers or their access to the market to the miller coors to jupiter networks. the transaction will allow us to simple fight decision-making and reduce the complexities. it will allow us to become a

more integrated and efficient brewer. in simple terms, miller coors will evolve from to shareholders , sab miller and molson coors 21 shareholder. molson coors the u.s. listed group rumor. it is still served by our , and despitelies being the third-largest brewer globally, with a 70% of his profits generated in the u.s. on behalf of molson coors i thank the committee for inviting me to appear and testimony today. i will answer any questions you may have, thank you. >> thanks to all of you for your statements. i would also the questioning. gentlemen, the two of you have each identified concerns relating to the way that anheuser-busch inbev interacts with its distributors ingesting this acquisition could make that

situation worse. is notuser-busch inbev acquiring any assets in the u.s., how will this deal of any impact on distribution? going along with that, can you identify any way in which this transaction in particular will lead to any new problems ernie is severe existing problems for distributors? also, along the same thing, if they are negotiating leverage will be no greater the day after this deal closes and the day before, start with mr. pease. mr. pease: i think you have to examine the question from a variety of perspectives. company that could come out of this merger will now control 50% of the global -- 58%

of the global profit industry. this is the fourth largest merger of all time. thatiggest concern will be a company like this will be able to use it increased market power influence they independent distributors that abi interacts with. the incentive programs currently in place while the certainly in the stand -- understand that it seems to us at some levels some of those programs are more designed to encourage to strip it is not to sell products of the independent smaller players. we feel that is anti-competitive. > i would echo the sentiment as it relates to the global profit pool. by comparison, sorry, if you look at the distinction -- with debate combined abi sab

of its largest american contributor -- competitor, that disparate comparative disadvantage as it relates the share of the global profit pool. you have to look at recent behaviors, look at the recent modelo acquisition and the behaviors as it relates to what is being investigated in california. but i think you want to do is ensure that the remedy is sufficient to ensure that you don't have additional problems. there is a lot of talk about carrots and sticks and the notion of incentives -- there is a very fine line to an incentive program that it can switch and become actually a stick. heard, one of the concerns regarding this acquisition is that the deal will have some impact on beer

distributor's right here in the united states. can you respond to that concern? and answer the and whether the acquisition is likely to trigger the reinvestigation of ab inbev's distribution contracts? >> thank you for the opportunity to clarify. this is really about the rest of the world. it is not about the u.s. so much so that we sold whatever assets were owned by sab miller to molson coors the same day we announced the transaction. it is about getting access to markets where today, we have no present. -- presence. there will be no impact on the way we conduct our business in the u.s. sen. lee: so your response to these statements is, with

respect to the u.s. market, it is not going to have an impact that is significant for u.s. antitrust law purposes. mr. brito: no. mr. pease, how do you respond to that? mr. pease: i think it could trigger termination. that is one thing i tried to talk about. because of this, there will be no terminations of either company's independent distributors. minimum,to be, at the something that is guaranteed as a condition of approval for this transaction. sen. lee: ok. senator klobuchar. sen. klobuchar: i will start by following up on that. you both have stressed that, due to the divestiture, there is no impact on the u.s. market. raised concerns that a

change in ownership structure can create an opportunity to renegotiate or terminate wholesale a relationship. there may be other issues that are raised by the justice department with regard to distribution. if it turns out that the divestiture creates opportunities to alter relationships with wholesalers, are you willing to agree not to take advantage of such relationships? are there conditions you can agree to that would assuage some of these concerns? transaction,f our the company that will change ownership is sab miller. we will be a part of them. there will be a no change in ownership for our company. there will be no trigger of any contracts in the u.s. market because this transaction is about the rest of the world, not about the u.s. there will be no impact on the

way we go about business in the u.s. sen. klobuchar: mr. hunter? hunter: sorry. i can confirm something from a molson coors and a miller tours -- coors perspective. it will be very much business as usual. , businesss happening continues on a business as usual basis. all of the friends -- the brands are currently available through the miller-coors arrangement will continue to be available. it is important to factor in the fact that if you consider the molson coors business, we started as a craft business in colorado. we know what it is like to build

your business in a long-term in the united states of america. we only want one distributor. we welcome the renaissance that we are seeing through the growth in craft over the course of the last two decades. sen. klobuchar: the three of you talke middle, could you -- ifh just what kind of the justice department decides to improve this merger, what kind of conditions you think would be helpful to you to assure that the craft brewery industry will continue to grow and that distribution is open? >> as i mentioned in my opening statement, we believe that abi should be required to divest its wholesale operations and forced to limit these incentive programs which we feel are anti-competitive.

>> i reiterate my concerns about assuring that there are no terminations of local distributors as a result of this global deal and that independent distributors are guaranteed the freedom to give their best efforts to competing brands. that is what competition is all about. exercise is very important to the department of justice as they review this. assurancesprovide and make certain that we are n looking a year from now at behavior that is somehow anti-competitive. sen. klobuchar: mr. wilson? mr. wilson: i will come back to my final paragraph here. competitionrotect and consumer choice in the beer market by the domestic or of the distributors halting these

incentive programs. last friday, in the wall street journal, we saw discussion about some of their incentive programs sell abil more pro- products and don't sell any of those. here is what you get in exchange for that. certainly a careful monitoring of how the transaction will impact the material flies, which is also a concern. sen. klobuchar: very good. noted there is barley in minnesota and corn in minnesota and iowa and maybe barley, too. you talk about -- mr. hunter made the point that he thinks we will have expanded need for those raw materials because of the merger just because of the growth. how do you see it impacting those products? >> maybe i could come back to a comment that mr. brito made in his opening statement, that

there would be no increase in ingredient usage, among other things. to me, that sounds like freezing production and being happy with where they are in the u.s. market. that is delightful if that is the case, but that does not sound like somebody looking to compete. that feels like a simple statement that comforts you, in my view. i guess they are expecting us to take market share -- sen. klobuchar: you know what i think i will do? i will have a second round here and i will hear my colleagues and we will get back to this and barleyps discussion. sen. lee: senator kratz. i have a short statement and i have had this discussion with my colleagues. as a result of the growth of craft breweries throughout the country, americans are enjoying a tremendous friday of options.

not only has this trend increased choices for consumers, it has created new economic at -- economic opportunities. in iowa, the craft industry has grown from just one brewery in 1985 to approximately 60 breweries today and the expansion has generated a new business, jobs, and has spurred tourism. it is important that we maintain robust and competitive marketplaces. we have earned -- we have heard competitive voices from retailers, independent distributors, and consumer advocates about this merger to adversely impact inputs and supply chains, distribution avenues, competition generally is a vibrant market. many of the concerns are about the increased leverage that the combined company would enjoy and what that might mean for the

thriving industry as well as consumer choice and products. the antitrust regulators will be looking at this deal to determine whether there are any anticompetitive aspects that need to be addressed. but it is important that we in congress have an opportunity to flesh out these concerns. my one question is to mr. wilson , which basically gives him an opportunity to expand on some of the things that he can do in those five minutes. i would ask if they have shareing to add to reaction. mr. wilson, you have indicated in your testimony that small and independent brewers are concerned about the proposed merged company's ability to engage in a competitive conduct. please give us more specifics you have already expressed about

your concerns with the proposed ownership of multibrand beer distributors in some states and how that could impact market access. : certainly. we have seen situations where craft brands have been pushed out of -- st. louis, these ample i gave earlier. -- the example i gave earlier. if i were to scoot on over to the washington state market, craft breweries are being squeezed out of those distributorships. had a vibrant craft portfolio prior to the purchase. now that has been almost completely diminished as i understand it. one of the things we have seen happen -- there is no problem with buying paid advertisement, say the football stadium in seattle, but there is terminology that is better left for a -- for someone of a higher

pay grade than me to determine what that means. the number of abi or abi-sanctioned brands on sale is awfully skewed towards abi. deal,is another similar not exactly paid advertisement, "alignment" deal with music venues. that is one that is being investigated. do you havey: anything that you want to respond to that? terms of supply, that is an important issue. i would like to bring to your attention some numbers. this deal will have no impact in , no impact in the amount of supplies we purchase and procure today. ops, we purchase a percent of the hops in the u.s. -- 8% of

the hops in the u.s. we purchase 12% of the cans available in the marketplace. we purchase 25% of the barley available in the marketplace. all of those things will remain the same. we purchased in the open market 27% of what is out there. all of those numbers will remain the same. this transaction is about the rest of the world. backgrassley: i will yield my time. sen. lee: senator blumenthal. blumenthal: thanks, mr. chairman. thank you and senator klobuchar for having this hearing on a profoundly important topic. i want to thank our witnesses for being here today, all of the divers and different viewpoints.

mr. brito, thank you for making the trip from connecticut. thank you for your involvement in our community and in connecticut. i want to say that i am a nondrinker, so i have to disclose that fact right at the outset, although our four children, at various points, may have imbibed. ofave had the privilege visiting a number of our brewers in connecticut and have posted here -- and have posted -- hosted here in washington, a number of others. i am going to ask to enter the list of connecticut brewers, which is very extensive, into the record, because i am very proud of them. .et me be very blunt what we have seen over the past mammoth a trend towards

beer behemoths in our market. the result has not been a happy one for many consumers. what we have seen as consumers is higher prices. whatever the complex analogies may be of the market and the metrics and the legal issues, through the eyes of consumers, the result has been higher prices. these megamergers may have been good for shareholders, but not so much for beer drinkers. so i think we need to be very careful here. and to regard with high degree of skepticism the kind of conventional divestiture that is proposed as a remedy. i would urge the department of justice to think beyond the domestics are that has been

proposed -- the divestiture that has been proposed for consumers. because i think that this merger has tremendous ramifications for consumers here despite the representations, and i take them in good faith, that there will be no impact on the u.s. market. maybe not on day one, but on day two and three and year two and three, ramifications could be huge. we have seen this before in the airline industry. that happily for consumers. let me be very direct, mr. brito . you have heard mr. purser say that what he is looking for, and i think i am quoting him almost directly, that there be no termination of the independent distributors. will you commit to this

committee that there will be no termination of distributors as a result of this merger? very good that is a point. again, this transaction is not about the u.s. it is about the rest of the world. therefore, nothing that relate to this transaction will impact any as jupiter -- any distributor. sen. blumenthal: i do not mean to be impolite, but i take that as a no answer. you can commit to this committee there will be no termination of any distributor and no renegotiation that will end contracts with any disturbed her. .- distributor is that correct? mr. brito: yes. sen. blumenthal: let me ask you -- abi intends to own no more

than 10% of its distribution. can you commit to maintaining no more than 10%? mr. brito: that is correct. that is our commitment in the marketplace. today, by the way, if i could explain a little bit, we are between 7% and 8%. 11% or 12%, but it is going to be around 10%. sen. blumenthal: 11% or 12% is different than 7% or 8%. mr. brito: that is why we said around 10. sen. blumenthal: furthermore, in terms of retail penetration, can you commit that there will be no effort to penetrate the retail market? mr. brito: i thank you for the question. the system in the u.s. is regulated at the state level. ofstates, 50 different sets

regulations. ownome states, brewers can wholesalers. in others, we cannot. in others, we can own brewpubs. in others, we cannot. we have been owning wholesalers for more than 100 years. let me tell you why we do this. the beauty is, if you own wholesalers, you are able to develop people within the company that understands the distribution system, the second tier. they are able to talk to wholesalers on an equal basis because they face the reality that the wholesalers face on a day-to-day basis. that is the reason why we have been in this business for 100 years. we have the knowledge from being closer to the market and being able to talk and understand wholesalers in a better way. sen. blumenthal: my time has

expired. i thank you for that and i look forward to second round. sen. lee: senator purdue. senator purdue: i appreciate you guys being here. i appreciate the fact that we are here talking about antitrust and the consequences on not only consumers, but investors. without one, the other does not exist. stakeholders that you have to deal with, i have a question for the two people who are going to make this deal happen possibly, mr. brito and mr. hunter. i would like both of you to respond. ?hy is the 10% number important i know that number does not come out of the air. there is balance in your own business when you look at the matrix you have to deal with going across products and countries. talk to me about that calculation and why it is important.

again, if you look at the last few years, it has always been around 7%. we set it around 10%. is that wefor this can develop people that understand that business. havehe biggest asset we other than our people and brand, is our wholesalers in the u.s. these are savvy, independent business people. they can carry whichever brand they want and they are amazing. brands in theild marketplace. 90% of our volume is being done by these savvy, independent entrepreneurs as opposed by our people. our people, it is good because they learn about the business and we can talk to them. sen. perdue: mr. hunter, do you

have anything to add? hunter: currently, we own one local distributor in denver. at this stage, we have no plans to extend our direct ownership and distributor network. distributorsth 569 . we are allowing them as business partners to take our brands to market. they are strong advocates of the three-tier system and under molson coors ownership, there will be no change at miller coors. sen. perdue: you talked about the synergies of this deal. can you explain more in detail what those synergies are? mr. hunter: our aspiration is to be a growth is this. we want to be a stronger, more assertive competitor in the united states. we believe that, under the ownership of one shareholder, we

can move with more case and build our business to be a long-term, stronger business. one of the advantages we have is that we can start to look at our network from a north american perspective. business ing canada. when it comes to breweries, distribution, procurement, shared services, and our ability to move brands between markets were quickly, that will make us a more able competitor in the marketplace. sen. perdue: one of the most important pieces of your business is the raw material. impact onicipate any the agriculture business by this transaction and have you heard from any of your primary suppliers or agricultural commodity providers? anticipate i would an impact if the business is successful and we grew our business on the basis that we would love to procure me or --

more in the united states. we have long-standing and long-seeded personal and business relationships with those barley growers. the national barley association has said that this deal will have no impact in terms of availability of raw materials. there is a bench point in the hops market. craft brewers have been growing very successfully. they are about 12%-15% of the market. they are very flavor-forward beers. much is being done to improve the supply change management and procurement and forecasting. generally, there is no issue with availability of hops. bottles,, from manufacturers has said that there is no issue with supply. is something that is

not controlled by us. it is a much bigger game in the global market. bill coors, the grandson of our , -- er we see no pressure from the market from that point of view. since this transaction will have no impact in the rest of the market, what we procure today in terms of supplies and raw materials will be the same. today, we procure a percent of the hops supply in the u.s. that will not change. as a result of the transaction, it will not change. we will procure 25% of the barley. that will not change. we will procure 27% in the open market and that will not change. there will be no change or

pressure in any supply system in the u.s. as a result of this transaction. sen. perdue: thank you. sen. lee: senator cowan's. -- koons. -- coons. ons: thank you. craft breweries are a big part of my home state of delaware. we have dogfish head and many others who are brewing some great beer. we want to make sure we have an open marketplace in which they can continue to thrive and grow and where we safeguard their ability to compete on an even playing field and maintain options for consumer choice. somet to make sure i ask relevant questions on that. in the wake of increased competition from independent brewers, avi has made -- abi has

made an effort to acquire craft distributors. some suggest they are doing this to constrain some of the distribution channels of competitors. how do you respond to these allegations? profits to using the continue the process of acquiring craft brewers? in terms of the 4000 breweries that we have in this country, we own five and have a minority stake in a safe -- sixth. the reason we do that is we can learn from these amazing entrepreneurs who have created brands and connected to local consumers. we can learn from that. we can learn from others. so that is one thing. plus so-called ab

wholesalers, we own 21. we own them for more than 100 years. we have learned and developed people so they understand the marketplace. first, this transaction has no impact on the u.s. market. the u.s. market has never been so competitive and so open. atyou want down the file your grocery store, i bet you would find more options than you would five or 10 years ago. beers have no issues finding ways to get on the shelves. 50, theates out of permits allow some sort of self distribution. that, any market you go, you have at least two or three or four wholesalers.

there are many options to distribute. 94% of wholesalers are competitive brands. what a wholesaler wants is to give brands that consumers want to buy and customers want to stock. that is what they do. that is why the craft brewers have been growing. i would offer one last point. we have been in the business since 1862. more than 160 years. together with wholesalers, we built a whole system, trucks, warehouses, to get products from brewers to the shelves. the craft brewers have been enjoying that system that was set by others. that is the beauty of the american market. it is a very open market and nothing in this transaction will change the competitiveness. sen. coons: thank you. mr. pease. no one wants to take a seat at a

bar and discover their only choices are between a but and in miller -- a bud and a miller. i found the testimony of mr. brito encouraging, but i would be interested to hear your view on how these huge international companies and their mergers may or may not contact craft breweries, distributors, and the impact. competent --pany's have your companies faced competition? mr. pease: i think you have a look at that question from a variety of different levels. fundamentally, mr. brito and i probably differ on the amount of independence that currently exists at the distribution tear. -- tier. my members are required to use a distributor to get their beer effectively to a retailer.

self distribution is an option in some states, but usually it is very limited. if you want to grow your business as a craft brewer, get your beer into a chain store, get your beer into a stadium, you need to use the anheuser-busch distributor or the miller coors disturbed -- distributor. those are the only two options to effectively bring your beer to the retail market. if the abi distributor is a wholly-owned disturbed, which just -- distributor, which it is -- nine states, then you are down to just the miller coors distributor. we do not think the existing playing field is exactly level and we are very concerned that the increased market power of the combined entity will be able to further influence the distribution tier to the

, 16dvantage of dogfish head mile, companies like that. dogfish head employs over 200 people. we want to make sure that those american success stories are not negatively impacted by this merger. sen. coons: could miss her cursor -- could mr. purser comment on that same question? do you agree with that assessment? is aurser: there scalability that comes with a more established distribution network. the miller coors and anheuser-busch inbev networks are more established. they have access to scale. that is part of the economic reality. different preceded by view -- different brewers 50 years ago, other brand names that once upon a time were dominant players. there were more regional players.

we could wax poetic and open a couple of cold ones and talk about the history of beer in seriousness,in all the access needs to be maintained through these independent channels. when you do have the presence of a company-owned distributor, that precludes the ability of some of those products to get to market. playeres, even a small -- the presence of a small player can limit those brands from getting to market. when dogfish head was going and getting established -- growing and getting established, they might make an investment based on the statewide network on one of the legacy brewers. if one of those legacy brewers is owned by their competitor, they may, in their mind, only have one choice or they may not choose that brewer that has a

company-owned presence. sen. coons: thank you. i recognize that there are other players or decades older for centuries older. what we are trying to do is make sure that we preserve competitiveness, a level playing field, and opportunities or our consumers and constituents. thank you very much. sen. lee: i wanted to comment briefly. they are about to pull a vote in a few minutes. i will be leaving in a few moments to vote. senator klobuchar will chair while i am gone. senator: thank you for being here as witnesses. i have to brag on north carolina. we have nearly 150 microbrews now. we have also added sierra nevada, and we are about to bring new bill demong line. this is a very important

industry to our state. our state is now offering a bachelor degree in fermentation sciences. i want to go to a more parochial issue for the state of north carolina. my colleagues have done a good job covering the broader landscape. mr. hunter, i would like to start with you. by aboutletter signed 115 of the state legislators and a similar letter from the governor that i want to submit for the record. provide you with an opportunity to respond to the specific questions. i do want to ask about a insistent theme from people have heard from in my state. they feel like the decision to close a plant that has been in north carolina for about 30 years and employs about 500 people that is going to be them believeof that there is a curious timing

between the announcement of the merger and the announcement of the closing of the plant sometime next year. can you explain the timing of the announcement of the merger and the decision to close the brewery and when the decision was made to close the plant and whether it had anything to do with the merger discussions? mr. brito, i will ask you for the purposes of closing the loop at the witness stand. hunter: let me start with your last question first. the merger discussions had absolutely no impact at all on the discussions that have been taking place for a long time in the miller coors organization with regard to how we manage our brewing network and infrastructure. to get to the specifics, the board and executive team of miller-coolers -- coors had been reviewing brewing requirements

for at least a year as they had been building through their 2015 plan. so through the middle part and towards the end of 2014, they had been discussing and looking at some of the challenges in the business. it was created in 2008. the businesses lost about 10 million barrels total volume. if you look at our brewery network, many of our breweries were underutilized, not performing efficiently or effectively. and the decision was taken that one of the breweries would need to close to take some capacity out of the network and ensure that the network was efficient so we could compete effectively. as you can imagine, long discussions because these are the last kind of discussion that any business wants because it affects our people. we were faced with a decision that we had a very modern brewery in shenandoah which has been well invested. we had to look at risks to

market, our geographical footprint and presence. the decision was made as we came into 2015 to close the eden brewery. something like that takes months of planning to ensure all of our communication and the welfare considerations for employees are in place effectively. it was nothing more than coincidence. that ourre coincidence coincidence -- pure that our announcement came at the same time that miller coors -- abi.ed avi i think it was a day before we connected. , fromillis: mr. brito your side of the discussions, discussion with the disposition of the eden

facility? mr. brito: never. question i: the only have, and i think it is very important, mr. hunter, at least in reference to the letter i received from the president pro plant as view the eden a state-of-the-art facility that had some capital improvements in the recent past. many of the people down there are wondering what the differences are between shenandoah, which would take on some capacity over time as the demand increases. it sounds like, as a minimum, there is a disconnect in terms of the communications on the ground. that is something that is very important for us to look at and has a significant economic impact to an area that is already struggling. as we move forward, i will pass on some additional that i have. i believe we are about to move to a vote and some questions from the legislative leadership. i look forward to your responses. thank you for being here. frankenbuchar: senator

from the state of minnesota. : yes, beer isn .ery important to minnesotans i want to thank you, ranking member, and certainly, -- and chairman lee, for holding this hearing. beer is extremely important to minnesotans. nothing exhibits this more than the 2011 state government shutdown. we had a three-week government shutdown the suspended medical state services, including transportation, construction, criminal background checks, the issuing of fishing and hunting and boating licenses. this was during the summer. lodgesan effect on our and resorts. but minnesotans really were not putting pressure on the state

legislature and the governor to resolve this. licensesthe state beer expired. more than 300 bars and liquor stores were no longer able to sell beer. because their license had expired. and then the public became outraged. and this got settled right away. so beer is very important to minnesota. was obviously a lot of businesses, too. it was beer. the beer industry in the united states has evolved. we have great craft breweries in minnesota. but i want to discuss how, given the importance of beer to

minnesotans, how we can keep a truly competitive and skate -- landscape in the united states. we have to review the impact of this deal at hand. mr. brito, i understand that deals of this size often involve very complex business decisions, especially when companies take on significant amounts of debt to complete the deal. i understand that you have an obligation to look out for your shareholders and save money where possible. unfortunately, those decisions can have harsh consequences for american families. v's2008, following inbe acquisition of anheuser-busch, the newly-formed entity announced, and a few weeks before christmas, that it would be laying off 1400 u.s. workers and over 400 contractors. this time around, ab inbev is

taking on $75 billion in debt, over $20 billion more than last time. i know you will be facing some tough decisions about where to cut costs. mr. brito, my question is pretty simple. what can americans expect this time around? where will you be cutting costs? will there be job losses, brewery closings, distributor terminations? or will you face pressure to raise prices to pay back that debt? mr. brito: thank you for the opportunity to clarify. this transaction is about the rest of the world. it is about gaining access to new markets, like african, asian. it has nothing to do with the u.s. it will have no impact on our operations in the u.s. market. that i can guarantee. sen. franken: so what you are

saying is that the $75 billion in debt will not have any effect on decisions that you might have to make in the same way you did last time? mr. brito: last time, we had an economic crisis in 2008. was a smallern size. -- was a bigger size. this transaction is way smaller than it was at the time. there would be no impact as a result of this transaction in the way we conduct business in the u.s. we are going to produce the same amount of beer. we will have the same market share. we will carry the same brands. this transaction is about getting access to new markets. sen. franken: is anybody here skeptical about that answer? >> i would comment. i do take mr. brito at this

world -- at his word that this transaction is more about the rest of the world than it is about the united states. it is the small and independent that areers -- brewers creating jobs in every state. we want to make sure that nothing arises as a result of this transaction that would hinder that. if the american beer drinker is left to be the deciding force and their access to products from small, independent breweries is unfettered, we are going to be comfortable. but we have significant concerns about how this deal could impact access to market for the small craft brewers, and access to raw materials. sen. franken: mr. hunter, could you respond briefly to the question i asked of mr. brito?

mr. hunter: certainly. from a miller coors perspective, as i tried to explain earlier, we currently have two shareholders, molson coors and sab miller. we will have one shareholder going forward. we will continue to build our business and be an assertive competitor in the u.s. beer business. we need to invest more in our business because of the changing nature of the competitive environment. the u.s. beer industry has never been as competitive -- sen. franken: thank you for your indulgence. senator blumenthal, as chairman, i recognize you. blumenthal: i am the last man city -- the last man sitting. i have to leave shortly to vote as well. brito, ist ask, mr.

take it by your unequivocal representation to me that there will be no termination of distributors, that you would be willing to incorporate that commitment in a consent order as part of the resolution of this merger? mr. brito: that is for you to decide. : it would benthal up for you to decide if you would be willing since a consent order is dependent on the consent of the parties, whether you, as the ceo of your company, ,ould consent to that decision that there be no termination of distributors. mr. brito: what we tried to do when we craft the contract of the divestiture, we tried to replicate only important clauses in that new contract so as to

mirror what we had back then. that, imenthal: i take hope, as a yes. you have made the commitment here and for it to be enforceable more easily, it should be part of an order that the justice department would join. take theust say that i value of the commitments you are making in good faith. i think the important lesson of many mergers is trust, but verify. verification and enforcement are critically important in this watershed moment for this industry. so i hope that you will be willing to incorporate that commitment as part of a legally binding document. that is essentially what a consent order is. mr. brito: as a company, we

commit -- what i would like to remind us, this industry has never been more open to new entrants. when you look at the market share of craft beers in 1997, it was under 4%. last year, it reached 11%. and the trajectory points that this market share will get to 20% by 2020. that may behal: little benefit to consumers if the 80% of the industry or the larger, if you go into purchasing those craft brewers, as your company has done. if they are in the hands of a small number of behemoth beer makers and the consumer has, in effect, less choice. mr. brito: today, we have five

microbreweries that we bought out of 5000. we have a minority stake in one more, so six. that is it. learn, to have those entrepreneurs growing as partners, and to get the dna of what they know that we do not know. thisis the beauty of transaction. same thing as owning a company of wholesalers. that is the reason why we do it. sen. blumenthal: i would like to , you raised a concern in one of the papers that i read about the need for a remedy to establish the molson coors enterprise as a completely given thet company evidence of anti-competitive coordination after the miller j.v. in 2008.

could you tell us whether you think that the existing divestiture plan provides sufficient guarantees of the independence of that new competitor? i think that is the million-dollar question. this merger is not over until a remedy is in place. the fact that the companies have stepped forward to offer an fix is evidence that this deal does have potential anticompetitive implications. the presence of a fully effective remedy is critical. i think there are open questions about that. the disposition of miller coors independent distributor contracts, how those will be renegotiated, any change in the dynamic in the market would be

important. miller has taken a reportedly much less adversarial approach to independent distributors than avi -- abi. we want to make sure an effective remedy would not change or create a dynamic where independent distributors are pressured to create extra 70 or discriminate against smaller rivals -- exclusivity or discriminate against smaller rivals. anything that hinders the ability to compete effectively would be suspect. these are things that the doj will have to look carefully at. there is quite a bit of murk. the devil will be in the details about how that remedy is ultimately negotiated. i think the doj had a very good approach with modelo. it is a template but it is something that will require close scrutiny. sen. blumenthal: thank you very

much. i think you have really hit the nail on the head. this merger would clearly break the law. the divestiture is an effort to avoid that issue. can be the remedy fashioned is the million-dollar -- or billion dollar question. thank you, senator blumenthal. why should ab inbev required to divest wholesalers when it is not acquiring any wholesalers, let alone any assets at all in the united states? referring -- are mr. pease: you are referring to they are not acquiring them through south african breweries. they are acquiring distributors currently. they have acquired five in the

last few months and consolidated those intercompany-owned .istributorships bymembers are required state-based regulations to use a distributor to get their products to market. controlsates where abi that disturb it or -- distributor, that shuts off one of two possible paths to market for my members. sen. lee: mr. brito, what is your response to that? mr. brito: we have owned wholesalers for more than 100 years. this transaction will have no impact in the u.s. own 21 wholesalers out of a universe of 500 plus wholesalers.

despite us having owned wholesalers for 100 years, craft has grown from 4% in the 1990's .o 11% last year the brewers association says it will get to 20% by 2020. the major wholesalers that we own our in new york, boston, san diego, and denver. link between us owning wholesalers and craft brewers being disadvantaged in the marketplace. in fact, it is quite the opposite. sen. lee: dr. moss, your testimony indicates that the discussion comes down to the sufficiency of the domestic or and the scope of the domestic andpy -- of the divestiture the scope of the divestiture. molson coors will acquire 100% "brands,ller's

breweries, intellectual property, and other assets." doesn't that mean that this merger will have little or no effect on the state of competition in the united states? moss: thank you for the question. i think you raise the critical point in this case. were there no remedy in this merger, it would be a legal merger. big increase in concentration, lots of control over critical distribution. this merger is occurring against a relatively-troubled backdrop in the u.s. beer market. evidence of coordination in the v.,e of the miller coors j. loss of control of distribution, but the growth of a segment that provides choice and diversity can -- to consumers. adding the remedy right is critically important in this case.

backdrop is important. context is really important. which means, moving forward, whether that transfer of the miller coors assets is fully effective, that has to be scrutinized very carefully. that means eating into the details of how the divestiture is going to occur and whether it will create a fully-independent molson coors. this provides a good opportunity to not only address some of the competitive concerns that are in the industry. at the same time, we look at a remedy that fully restores competition. moving forward, there is an opportunity to make some significant improvements in terms of protecting the independent this tradition channel, because craft brewers are so dependent on it, and to perhaps prohibit certain types of behaviors that have historically been entrenched in the industry that make it more difficult for rivals to compete.

sen. lee: so the effect of the data future will depend on how it is executed? dr. moss: yes. sen. lee: mr. hunter, let's talk about this for a minute. tell us how the operation of miller coors will be expected to coors after molson acquires sab miller's interests in the joint venture. mr. hunter: i am probably best placed to talk about the independence of molson coors. it is a u.s.-listed business. we will be a single shareholder of the business going forward. currently, we have 50-50 governance. this is an asset transaction. all of the miller coors assets will transfer to molson coors and the miller coors business will be run as one of our units. we have one in canada, an

international business unit, a global office, and the u.s. would be our fifth. all of the brands are currently available to consumers, customers, and distributors through miller coors. they will remain in place. the brands that we do not own, a small percentage of the volume, we have agreed to a perpetual, royalty-free and free license arrangement. those brands are basically our brands to do with as we see fit. it is important that we could talk to our distributors about the main demands of the business that they know and have been investing in since 2008. it really is business as usual. i am clear on the independence of molson coors. we are a u.s.-listed business, an independent business, and we still have governance from our founding families on our board, which makes us quite unique in the world of beer. sen. klobuchar: thank you very

just a few more questions -- thank you very much. just a few more questions. , the buyer waso made a party to the order. if the department of justice determined that molson coors should be named as a party for the purposes of a remedy, would you have any objections to that? mr. hunter: our view is that there is nothing anti-competitive about this arrangement in our taking full ownership of miller coors. that is something we would need to discuss with the doj. according tor: testimony, you talked about how this would allow you to create the opportunity to increase barley purchases. could you provide details on how changing from the joint venture to the single ownership will boost competitiveness, make you

a more effective competitor? mr. hunter: the challenge of our business is to grow the business. that's my intent as the c.e.o. company. jointsiness has since a venture was formed, been an u.s.tive number two in the market and the market has changed pretty significantly as think we've heard in detail throughout the course of the morning to get the business back to stable position by 2018 and volume growth by 2019. ambition we have set for the business. by being part of the molson we move fromation two shareholders to one. it's simpler and faster from a decision making perspective. we can utilize our total north so ourn footprint, canadian business and u.s. business, to drive further efficiencies and invest more assertively at the

tont end of our business compete for assertively. that's what we're about as a business. we have been here for the long here for the to be long term. sen. klobuchar: thank you. why did a.b.i. want or need this acquisition? main reason is to get access to new markets in asia, parts off latin america and complement our portfolio. the beauty of this transaction in terms of strategic rationale is that the footprints of both companies are highly complementary, the markets where they operate. with this operation, with a few u.s., wes like the have divested the assets, there no increased concentration in any of our markets. sen. klobuchar: one more question, mr. pease, a wholesaler issue. described in your testimonies some allegations

coercedolesalers being into dropping craft brew products by the major brewers. there are many ways to distribute beer and access to carry a.b.i. or miller coors products not necessary, some people say. from exhibit c of your testimony that each of the beer wholesalers carries either a.b.i. or miller coors. think using non--- allegings are not that's what they want but using miller coors wholesalers, is that a possibility for the market? mr. pease: it's a possibility if you're only content to take your brand to a certain level. the true distribution horsepower is with the a.b.i. option or option.oors the small, independent option is feasible to a degree but you'll constrained to a fairly small

geographic footprint. if you want to grow your say, like a serly, and you want to get into the chain getery store, you want to into the big boxitarily, -- box get into you want to the sports venue, you're pretty much limited to one of those two options. that's why our focus on all of this is about fair access to market for the smallest players. nothing negative comes out of this deal, that further market forccess to small and independent craft brewers, we're going to be more beenrtable but there has past and even current behavior so-calledatively independent a.b.i. distributors that we would call into question. say thatuchar: i will we mentioned some of our brewers, everyone's mentioned it's importantk to note there's big ones like have, and then there's ones like fitger's, a restaurant in duluth, and canal brewing,

lake superior brewing and one i called capital danger which is literally in -- not a it's close, in two harbors, minnesota. as you know, the distribution is everything for these brewers. so thank you for acknowledging that. dr. moss, one more question on this. i didn't really ask you this question, maybe someone else did was gone. if we look at if there is as the justice department believes there should be conditions on approves it, what conditions do you think would be helpful? dr. moss: thank you. key question here. i think any -- as i said earlier, any remedy will have to create a fully independent fully coors for it to restore competition in the market. a troubledthis is market landscape against which

this merger is occurring so i the grupoing up divestiture package of conditions and moving it to this merger may not be sufficient. i think additional details, additional conditions on post merger conduct of the companies will be important. example, a remedy, a remedy minimum anye at a prohibitions on contract agreementsy supply would continue to link the two companies together between molson coors and a.b.i. so full independence means no supply agreements, no contract brewing. i think a good remedy would on any prohibitions contracts with independent distributors that created for exclusivity. i think that has been conduct greatly troubled this industry. now is the time where that conduct can be dealt with a mergerly through remedy, so prohibitions on

provisions. i also think a remedy would address even preemptively any capacity that are in very close proximity to this merger. say those type of closures are highly suspect given the proximity to this merger deal. sen. klobuchar: what was the last one? dr. moss: preemptive closure of capacity at existing miller facilities and a fully independent molson coors would not have incentives to tacitly with a.b.i. we have economic evidence that shows that there was tacit and price increases came out of that so this again is an opportunity in creating a coorsindependent molson to prevent any further tacit coordination in the industry so i think a remedy will have to be carefully thought out. sen. klobuchar: very good. thank you. responses, anyone? think we've gone through the barley hops discussion, mr. brito. you responded to another senator, very good. so we don't have to go there.

all right. i don't have any further questions. much, mr. chairman. you, senatornk klobuchar. thanks to all of our witnesses. this has been an informative hearing. we appreciate your testimony today. the record will remain open for one week. we will be adjourned. thank you. [captions performed by national captioning institute] [captions copyright national cable satellite corp. 2015]

[inaudible] directorow, f.b.i. james comey testifies at a senate judiciary committee hearing, his first appearance on since thell san bernardino shootings. live coverage begins at c-span3m. eastern on and c-span.org. having business before the honorable, the

supreme court of the united admonished to draw near and give their attention. landmark on c-span's cases. arrest, you have a right to an attorney, anything say can be used in a court of law. ernesto was 23 years old in 1963 when he was arrested in on suspicion of kidnapping and raping a young woman. after hours of questioning, he confessed. his lawyer argued he had not been told to the right to both attorney and the right to remain silent. the case went all the way to the supreme court. follow the case of miranda versus arizona, with jeff president and c.e.o. of the national constitution

center, and paul castle, of utah law school u.s.ssor, and former district court judge. for background on each case while you watch, order your copy companiondmark cases book available for $8.95 plus shipping at c-span.org/landmarkcases. responding to a monday night campaign speech by donald trump, leader harryty reid condemned the republican front runner's call to bar the muslims into the u.s. senator reid also commented on other republican candidates' immigration. the presiding officer: donald trump is standing on the flat

form of -- platform of hate and i'm sorry to say hate the republican party built for him. it was last week i came to the floor here and saided republican party is run -- and said the republican party is running on a platform of hate. yesterday donald trump provided the strongest evidence yet, it's true. trump proposal to bar muslims from entering this country is hateful, despicable and vile. we're not a country that goes religious tests. trump's statement is a slap in the face to the numbers of peace-loving muslims living here and to those who want to travel and live here. we welcome all and say donald trump is not america. sadly, however, donald trump has become the republican party, because it's just not him. many of the leading candidates

for the republican nomination have said the same hateful things, especially about muslims jeb bush, ted cruz proposed a test for refugees. you can't condemn trump when you want to impose a religious test for women and children fleeing death and persecution. ben carson's called muslims rabid dogs. chris christie said they should be tracked. today donald trump offered the only true statement he's made for some time, referring to some of his fellow republicans, those running against him for president, here's what he said -- quote -- "they have been condemning almost everything i say, and they come to my side." it's disturbing but it's true. republican candidates condemn trump's remarks and then adopt his racist policies as their own. we shouldn't try to fool ourselves, this sort of racism

has been prevalent in republican politics for decades. trump is saying out loud what other republicans merely suggest. political leaders must condemn these hateful, un-american statements with their words and statements with their words and >> speaker paul ryan criticized donald trump's stance on muslim immigration and spoke to capitol minutes.rters for 15 >> good morning, everyone, i'm will heard, i'm one of the freshmen here, i have been up here in washington, d.c. for 11 months but spent nine years as

an undercover officer in the c.i.a. in back alleys at 4:00 a.m. chasing al qaeda, nuclear weapon prolifferators so when you're talking about the threat of present's a clear and danger to the united states and there's many things we need to be doing to stop this threat and thing we're doing this week is tightening up the visa waiver program. force on thetask of isis to the homeland. many of our european allies are not sharing information the way are should be and these folks -- europeans are only threeng one out of every travel documents of people going through their country. this kind of stuff needs to stop. it make sure our european partners are sharing information with us and using the information we're giving to the things ione of learned when i was in the c.i.a., if you get the right information, to the right you keep terrorists on the run and off our shores. much. so

>> thank you, will. six days ago, our nation witnessed the worst terrorist attack on our soil since september 11. i know right now many americans feel unsafe and unsure. people deserve to know that we are taking decisive action to and tackleselves this threat. the day after the paris attacks, leaderority leader, mccarthy, put together a task force to weigh new actions take including recommendations made by homeland security. mr. heard is a member of this task force. house voted to strengthen the certification requirements for syrian refugee program. that was a big bipartisan vote, a veto override majority bipartisan vote. today, the house will vote to strengthen the nation's visa another product of this task force. this will help neurallize the threat from foreign terrorists entering our country. we expect this to be another big comingsan vote so we are

together to tackle this threat and we are ready to do more. that is why we need the realdent to put forward a comprehensive strategy to defeat, defeat, not contain, isis. theunday night, we heard president defend staying the course. the courseld we stay when the enemy is evolving? will lead from behind, we remain one step behind. defeating the enemy is going to take time. all of ourto take heart and all of our might. but we will persevere and make no mistake, we will win. voted to pausee the refugee program a few weeks ago, i made very clear at the there would not be a religious test, there would be a security test. that is because freedom of religion, freedom of religion is constitutional

principle. it's a founding principle of this country. normally, i do not comment on what's going on in the presidential election. will take an exception today. conservatism. what was proposed yesterday is forwhat this party stands and more importantly, it's not for.this country stands not only are their may many muss armed forcesr dying for this country, there are muslims serving right here in the house, working every day and defend the constitution. some of our best and biggest allies in this struggle and fight against radical islamic are muslims. the vast, vast, vast majority of whom are peaceful, who believe freedom,ism, democracy, individual rights. i told our members this morning to always strive to live up to

our highest ideals, to uphold those principles in the we swearion on which every two years we will defend. that's why we are here and that why we are going to stay here to do the people's house and do work.ople's and i thank the speaker thank will for their work. i want to make. will talked about the visa waiverthe program introduced by candace miller. of legislation passed out of committee months ago in march unanimously. that wille task force served on in homeland the recommendations. points, there's 38 countries in this program out of 196 around the world. but the program allows an individual to travel to other auntries not by ever getting visa or have communications or interview simply online. if there's a visa lost or

stolen, who's that person coming into your country? if you don't have an e-passport, biometrics like america does, do you really trace who that individual is? but the biggest fear that i have so many in this conference on both sides of the aisle, is that you have more than 5,000 that have western passports in this program that to iraq or syria in the last five years. that we need to fix. to pute speaker asked us together the task force, counterterrorism and homeland security, we picked the that have jurisdiction. we'll meet again this week but we are looking at short and long-term gaps that we need to fix, making sure that we're the homeland safe so we'll vote on that today. that bill will become law and be bipartisan. suspension,t's on

as well. we have a few outstanding items up this week for scheduling purposes, we told our members that there's a good chance they could be here through the weekend. they'll be here friday, for sure. dealow they will have to with a short-term c.r. we will not allow the government so we'll do aed short-term so we can finish our work because we also, when we extenders,omni, the we want to make sure there's a lot of transparency for the what's to be able to see inside those bills before any place.kes defeat isis, it's going to take a strong strategy and strong leadership. our intelligence community tells us that isis is not being contained. if you look at president obama's on sunday night, all he talked about was the existing nottegy that clearly is working and so while we know from our own intelligence community that isis not only is being contained but is

actually coming into america, the american people need to see clear strategy by the president. rather than trying to take away of second amendment rights law-abiding citizens, president obama needs to lay out a clear thisegy that confronts direct threat. the american people deserve to know that our government is doing everything in its power to keep them safe and that's why the house will continue focusing this direct threat by the legislation that we're moving forward coming out of our task force, working with our members who have the best expertise and who have been working on this so today when you see us take on a bill to actually reform the visa waiver program, obamaing that president himself acknowledges, has loopholes that need to be example of thean house moving forward to do everything in our power to keep safe.an families if you've ever visited the 9/11 museum and memorial, when

you first walk into the museum, 2,977e the pictures of people who lost their live that day. and when you emerge out of the museum, you have a lot of clarity as to those that would weus harm and the fight that have against those who want to destroy our way of life and the values that we live every day as americans. reminded that we need leadership today more than ever. are constantly adapting and our focus must be clear. in the speech that the president gave earlier this week, it was the same,t more of pointing fingers instead of taking principled action. going to see again this week in the house is important action, as we wait on president's strategy to destroy isis, the reforms to the waiver program is only just

one of the tools that we believe on tot be moving forward ensure that we're taking the steps so that america can be safe. importantly, when a threat emerges, we have an obligation to target it and keep the fight against terrorism out of america. that is, after all, our fundamental obligation, protecting the safety and security of every american in country. safety and security of americans must be our top concern. be our foremost priority. the's why congress passed national defense authorization act requiring the president to comprehensive strategy to defeat isis. additionally, this important is now bill, which signed into law, stops the president's plan to transfer terrorists from guantanamo bay such asble locations

the united states disciplinary barracks in fort leavenworth proudly represent. i urge the president to listen to the american people, inecially the folks leavenworth, and drop this reckless and expensive plan altogether. we should be focusing on stopping terrorists from country.the that is why the house is already working to protect american a bipartisan fashion, by updating and strengthening visa waiver program. this is another step to ensuring security ofnd americans from those who seek to us.roy >> questions? reporter: [inaudible question] >> i've already given my response and what i think about his comments. >> do you think there could be party? damage to the

>> i'm not concerned about lasting damage to the party. these are principles and our to thesededicated principles and that's why i think it's incumbent upon leaders of our party like myself stand up and defend what conservatism is and what the for.lican party stands >> i know we're working toward omnibus bill here. [inaudible question] where are we? with refugees in and out of the bill? answer will evolve. i will not negotiate to the we will to what it is or will not do. these negotiations are ongoing. we know we will get it done right instead of fast. we will not waive the three-day rule. will make sure members of congress and the public have the time to read what's agreed to not going to let the

arbitrary deadline stop us from getting this right. will get the best agreement we can get. i'm not going to negotiate to the media. are you looking at a two-year extender? >> we filed a two-year extender at the rules committee. that is what we will do if we agreement on a long-term extender package which is our preference. reporter: how long of a short-term continued resolution do you need? something that the leaders along with our folks at the other side of the capital at. look days.l be a handful of we need to get it right. us to go home until we get this done. [inaudible question] whoeveroing to support the republican nominee is and stand up for what i believe in as i do that. thank you. >> coming up on c-span, members

the house gun violence task force hold a hearing on gun violence. to bars debate a bill people on the no-fly watch list the senate guns and judiciary committee holds a hearing on a proposed merger of two largest beer producers. >> on the next "washington tornal," we'll talk congressman rob whitman about national security threats and the fight against isis in syria crowley on newly proposed gun legislation and homeland security. elizabeth grossman discusses regulation about lax of toxic chemicals. "washington journal" is live calls, facebook comments and tweets at 7:00 a.m. eastern on c-span. >> she was such an authentic person.

always thought there was more to the story of lady bird than anybody covered, certainly than i wrote about. she became, i think, the first modern first lady. she had a big staff. she had a very important project. he wrote her book as soon as she the white house. she really invented the modern first lady. night on "q&a," betty boyd caroli discusses her book, giving an inside look at the marriage and political partnership of lady bird and lyndon johnson. a lady bird johnson is perfect example of the conclusion i came to which is saw something in those men, the ambition, the opportunity to climb and make a mark in the world, and married them in spite of parental objection so she's a good example of that and that's why i decided i had to find out more

about her. sunday night at 8:00 eastern and specific on c-span's "q&a." >> house minority leader nancy pelosi and the democratic house gun the violence task force hosted a forum on reducing gun violence. heard testimony from gun violence experts and gun safety advocates. event is 35 the minutes. er 5, 2010, jonathan >> september 5, 2010, jonathan williams was sitting in his vehicle when he was shot in the head and killed. williams was struck by gunfire directed at individuals in the area of his vehicle that he had no association with. during the incident, nine shots were fired by michael hilton. hilton was convicted of murder of williams and was sentenced to 25 years in the department of virginia corrections. september 8, 2011, another men was visiting friends when he was

shot and killed. rhodes was involved in an altercation with an individual who has yet to be identified. the offender shot him one time before fleeing the area. rhodes, a star high school basketball player attending virginia state university, was gunned down in the prime of his life. a high school athlete with the potential to have the world in the palm of his hands. unfortunately, due to senseless argument settled by gunfire, his true potential will never be known. on may 4, 2015, shakira ross was shot four times and killed sitting in her vehicle. ross was waiting for a friend to return when the offender approached the residence that her friend was in. the offender noticed ross in the vehicle and began firing. a total of eight rounds were shot. the offender has been arrested and is awaiting trial.