Now here’s a topic that could cause some cognitive dissonance among certain regulars:
Two huge international conglomerates — Anheuser-Busch Inbev and MillerCoors — now control 80 percent of the U.S. beer market. That dominance is the result of a recent joint venture between Miller and Coors, formerly the No. 2 and 3 biggest brewers in the U.S. market.
As a column in the New York Times notes, the two top surviving companies are now “raising prices at the same time, during a recession and while beer demand is slumping.” That’s the kind of pricing power that a noncompetitive market can provide. The column suggests that “the move almost begs for an antitrust review” by the Obama administration.
It also notes that “years ago, the Justice Department sued to prevent the merger of Pabst, then the 10th-largest brewer, with the 18th biggest, Blatz. The case went to the Supreme Court, which in 1966 ruled the deal was anticompetitive and forced Pabst to divest Blatz.”
The TImes offered that as an example of what could happen in the current situation. Personally, I think it’s telling evidence of just how much things have changed in this country. Forty years ago, consolidation of the 10th and 18th largest brewers was grounds for anti-trust action, upheld by the Supreme Court. Today the combined market share of the 10th and 18th largest brewers is too tiny to even be measured, and we allow the 2nd and 3rd largest brewers to combine without serious scrutiny.
All in the name of the free market of course.