Beer industry needs more competition, Treasury report finds
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.