Monopolized U.S. Beer Market Threatens Diversity, Local Control

Discussion in 'Beer News' started by Jason, Dec 13, 2012.

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  1. Jason

    Jason Founder (0) Aug 23, 1996 Massachusetts

    Washington, DC (December 2012) - Two giant companies — Anheuser-Busch Inbev and MillerCoors — control nearly 90 percent of the U.S. beer market. A few retailers, such as Costco, increasingly dominate beer and wine sales across entire regions, such as Washington state.This intense concentration of power threatens the ability of American communities to regulate the sale of alcohol and to reduce the variety and quality of beer in America’s marketplaces, according to a report released today by the New America Foundation’s Markets, Enterprise, and Resiliency Initiative.

    The report explains how the “three-tiered system” of alcohol regulation was designed by lawmakers to preserve local control over the industry and to promote individual self control.The report also details how the giant international beer corporations and mega retailers are taking actions that threaten to upend a system designed with great care – at the end of Prohibition 80 years ago – to balance the interests of the consumer, the brewer and distiller, and the community.

    The report documents how:

    • a sweeping series of mergers in the beer industry has shrunk the number of major breweries in the United States from 48 in 1980 to two today.

    • big brewers use their power to encourage consolidation among distributors, and to discourage these distributors from carrying competitors’ products.

    • giant retailers like Costco are reshaping state level beer markets in ways that undermine local control and erode traditional protections against uncontrolled discount pricing.

    Read the full report, “A King of Beer? Concentration of Power Over America’s Beer Market is Bad for Consumers. It Also Threatens Constitutional and Moral Balances."

    For more information or to schedule an interview, please contact Clara Hogan.

    About the New America Foundation
    New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States.

    About the Markets, Enterprise, and Resiliency Initiative
    MERI promotes political, industrial, economic, and environmental resilience. The program documents and clarifies the dangers of extreme consolidation in America’s political economy, and discusses ways to reestablish it on a more stable and fair foundation.

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    #1 Jason, Dec 13, 2012
  2. Northlax3

    Northlax3 Initiate (0) Aug 19, 2012 New Jersey

    Very interesting and in-depth article. As a guy who is just graduating with a marketing degree and looking to work for a wholesaler/distributor and eventually a brewery, it opens my eyes to a few things going on in the industry. It is interesting how important the three-tier system is to our beer industry, but how seemingly corrupt it still is. Though regulated, the beer industry is still being monopolized and the consumer is still hurting, as they were pre-prohibition. I wish the government was able to do more to stop these acquisitions from ABI and MC, but I think the real problem lies in the lobbyists who basically fund a lot of the politicians campaigns. It'll be interesting to see what happens in the future.
     
    #2 Northlax3, Dec 13, 2012
  3. otispdriftwood

    otispdriftwood Initiate (0) Dec 9, 2011 Colorado

    Why is it that every article about beer contains a different percentage of market control by BMC? I've seen everywhere from 75% - this one @ 90%. What gives?
     
    #3 otispdriftwood, Dec 13, 2012
  4. FUNKPhD

    FUNKPhD Initiate (0) Apr 13, 2010 Texas

    That's how monopolies work? :rolling_eyes:
     
    #4 FUNKPhD, Dec 13, 2012
  5. jesskidden

    jesskidden Grand Pooh-Bah (3,145) Aug 10, 2005 New Jersey
    Society Pooh-Bah Trader

    The difference is that one figure is their total US beer market share, which is now around 75% for AB (47%) and MC (28.4%) (which also includes the imports they bring in, most of which are brewed/owned by their 3 parent co's - ABInBev, SABMiller and MolsonCoors).

    The 90% refers to the percentage of US beer production those two brew in the US.

    The 14% of the US market that is now imported brands being the major difference between the two figures.
     
    #5 jesskidden, Dec 13, 2012
  6. otispdriftwood

    otispdriftwood Initiate (0) Dec 9, 2011 Colorado

    Monopoly? I want the car.
     
    #6 otispdriftwood, Dec 13, 2012
  7. otispdriftwood

    otispdriftwood Initiate (0) Dec 9, 2011 Colorado

    Ahhh. Thanx.
     
    #7 otispdriftwood, Dec 13, 2012
  8. bdub32689

    bdub32689 Initiate (0) May 19, 2011 Massachusetts

    What it still boils down to is breweries being able to get their beer on trucks. With the growing share craft beer has hopefully this will inspire more distributers to build there business by distributing a large portfolio of craft beer rather then relying on the bulk of their business coming from BMC because then its too easy to leverage the distributor in to carrying one of their new lines and dropping a craft
     
    #8 bdub32689, Dec 13, 2012
  9. tjensen3618

    tjensen3618 Maven (1,391) Mar 23, 2008 California

    Craft breweries are still having difficulty getting their beer distributed?

    You sure this article isn't from 2004?
     
    #9 tjensen3618, Dec 13, 2012
    westcoastbeerlvr, Levitation and 5thOhio like this.
  10. frazbri

    frazbri Initiate (0) Oct 29, 2003 Ohio

    That's another chilling look at the plans of ABI. Bully your distributors, squeeze out those whose goals don't perfectly align with ABI, manipulate legislation to gain greater control of the market. These are reasons many of us fear ABInbev and MillerCoors.
     
    #10 frazbri, Dec 13, 2012
    jrnyc, Providence, SammyJaxxxx and 1 other person like this.
  11. UCLABrewN84

    UCLABrewN84 Initiate (0) Mar 18, 2010 California

    You should go for the thimble. You can drink more beer out of it.
     
    #11 UCLABrewN84, Dec 14, 2012
    WebGuyMike likes this.
  12. JediMatt

    JediMatt Zealot (549) Jun 18, 2010 Iowa

    Scary stuff.
     
    #12 JediMatt, Dec 14, 2012
  13. jesskidden

    jesskidden Grand Pooh-Bah (3,145) Aug 10, 2005 New Jersey
    Society Pooh-Bah Trader

    Of the 48 brewing companies in the US in 1980 (debatable whether one would call all of them "major"- but the non-microbrewing-era ones), a dozen others besides AB and MC still exist:
    1. Anchor
    2. City (successor to Heileman, also runs former Latrobe plant)
    3. Cold Spring
    4. Matt (at the time the West End Brewing Co.)
    5. Minhas (formerly Huber)
    6. Genesee
    7. Schell
    8. Spoetzl
    9. Stevens Point
    10. Straub
    11. The Lion
    12. Yuengling
    ​
     
    #13 jesskidden, Dec 14, 2012
  14. Providence

    Providence Pooh-Bah (2,652) Feb 24, 2010 Rhode Island
    Pooh-Bah Trader

    Kudos for posting this Jason. I hope that all BA's come check this thread out.
     
    #14 Providence, Dec 20, 2012
  15. aubuc1

    aubuc1 Initiate (0) Dec 19, 2007 Florida

    I think this shows the folly in creating legislation to solve commercial problems. There is always a work around, but the legislation just gives an advantage to those closest to the beaurocrats. The three tier system does not work and is unneccessary legislative garbage. If it benefited smaller breweries to have someone truck/ship their beer, let them choose to do so.
     
    #15 aubuc1, Dec 21, 2012
    westcoastbeerlvr, rlcoffey, Beerandraiderfan and 1 other person like this.
  16. 5thOhio

    5thOhio Pooh-Bah (1,571) May 13, 2007 South Carolina
    Pooh-Bah

    Yeah, I don't get this. If it were true, wouldn't we see a shrinking number of craft breweries? Instead, we see just the opposite: a growing number of craft brewers and distribution across the US. Every time I go to Total Wine, they have new beers from breweries across the country.

    Maybe this article is focusing only on breweries that brew only Adjunct Lagers, like Yuengling, Coors, Bud, etc?

    Another misused word. If it's a monopoly, that means there's only one company making the product. Mono = one.
     
    #16 5thOhio, Dec 21, 2012
    Beerandraiderfan likes this.
  17. Levitation

    Levitation Initiate (0) Aug 7, 2009 California

    ah but poly = many. where is your god now?

    jim koch credited the three-tier system as a major reason sam adams was able to survive and thrive. i'm sure jesskidden has the exact quote...

     
    #17 Levitation, Dec 21, 2012
    TheBeerAlmanac and Beerandraiderfan like this.
  18. mcc1654

    mcc1654 Initiate (0) Mar 20, 2011 Illinois

    This is why we have antitrust laws. Now if only they were enforced.
     
    #18 mcc1654, Dec 21, 2012
  19. benart

    benart Initiate (0) Dec 20, 2008 Delaware

    for clarification... only 10 of those are still American owned, most have changed hands numerous times & the rest are contract brewers at best, where the beers that actually bear the name are terrible facsimiles of what they were & only 2 or 3 are actually independently owned.
     
    #19 benart, Dec 21, 2012
  20. Beerandraiderfan

    Beerandraiderfan Initiate (0) Apr 14, 2009 Nevada

    This is not why we have anti-trust laws. Concerted action type of price fixing is. They are enforced, but this scenario does not fall under said legislation.

    Anti trust lawsuits don't occur when the big boys are losing ground by double digits annually to the smaller competitors (one could easily argue that craft and BMC aren't even competitors). The invisible hand is handling this alleged problem better than the government could.
     
    #20 Beerandraiderfan, Dec 21, 2012
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