In the year 2000, the beer industry was controlled by 22 different companies. In 2012, that number reduced to just four, AB InBev, SABMiller, Heineken, and Carlsberg. Just a couple of years ago, AB InBev merged with SABMiller, creating a huge firm that controlled 30% of the beer industry worldwide and 60% of the market's profits by itself. The smaller beer companies attempting to make their way up the ladder can only account for just 9% of the American market by sales, and they are getting bought by these huge players as well. However, a purchase that has angered many is the recent purchase of beer reviewing sites and delivery options by AB InBev. A massive brewing company owning beer review sites has huge issues for obvious reasons, as they can freely advertise their own beers while squashing out other beers they don't want consumers to see.
The reason you haven't heard of AB InBev, besides not drinking beer, of course, is because they own over 400 different brewing brands, similar to Coca-Cola and Pepsi. This takes away the aspect of pure competition that would be apparent if these 400 brands were independent, as there is no real competition between the brands. Because of this, the large AB InBev firm can raise the prices of the beer they sell as well as not be forced to produce the best quality of the beer, and there has recently been a reverse in a trend of declining beer prices as a result.
The main issue this merge has brought to light how easily companies can merge to create a huge monopoly-like firm that can control a huge amount of the market. In order to merge, the only thing regulators enforced was that SABMiller sold MillerCoors. When AB InBev then bought beer reviewing sites as well, there was almost no response from antitrust regulators. Overall, not only has the creating of monopoly like companies from merging companies hurt the consumers, but it has also raised questions about the US antitrust enforcement in what should be allowed and what shouldn't be allowed.
https://theweek.com/articles/736059/what-beer-reveals-about-monopoly-power
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very nice
ReplyDeleteVery informational post! I did not know anything about these major alcohol companies nor heard any of these big brand names. This situation feels very familiar to that of the soda industry. There is one big company that you didn't really know ran everything, yet they do. I find it interesting how these companies were originally competitors though, and joined together to become one powerhouse.
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