Feb 9, 2022 - Economy

Beer industry needs more competition, Treasury report finds

Beer taps at a sports bar

Beer varieties abound. Photo by: Brian van der Brug/Los Angeles Times via Getty Images

American beer drinkers have plentiful options, with the variety of pilsners, ales, and lagers available in a typical grocery store or sports bar greater than ever before.

  • Yet paradoxically, the beer industry has also become highly concentrated, with two massive companies accounting for an estimated 65% market share. Some regulators want to make the industry more competitive.

The big picture: The Treasury Department on Wednesday published a report urging vigorous antitrust enforcement in the beer, wine, and spirits industries — which could affect what Americans drink in the future, who makes and distributes it, and what it costs.

State of play: The report cites evidence that in any given local market, beer distributors must in practice closely ally with one of the two giants of the industry — Anheuser-Busch Inbev or Molson Coors. Independent brewers must then rely on one or the other to get in stores, restaurants, and bars.

  • One commenter cited by the Treasury called it "a duopoly that together holds 90% or greater of the beer market in a specific geographic territory" that "helps entrench dominant beer suppliers."

Yes, but: The trade group representing major brewers rejects this analysis, emphasizing instead the variety of choices drinkers have.

  • "We are disappointed by the Administration’s mischaracterization of the thriving American beer industry," said Jim McGreevy, president of the Beer Institute, in a statement, adding that consumers have "more choices for beer than at any other time in our nation's history. "
  • A different group, the Brewers Association, that represents independent breweries, was more supportive of Treasury's report.

The bottom line: Is the beer industry a triumph of consumer-friendly competition, or a trust-buster's worst nightmare? It's both.

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