Citizens should demand government intervention against runaway mergers and anti-competitive bullying in the marketplace, whatever the commodity. New laws and public pressure are needed. The US bodies responsible for anti-trust enforcement have failed to keep pace with the ways corporations have devised to stifle competition.
Since 2009, ABI's share of the US market has dropped several percent. They lost ground to craft brewers and to imports, and responded in predictable fashion; the most swollen of the giants would grow bigger by acquiring Grupo Modelo, Mexico's leading brewer and producers of Corona, the largest-selling import in the US.
At last, the Department of Justice brought an anti-trust suit, good news, but not for long.
ABI and DOJ reached a settlement that DOJ believes will prevent artificially high retail prices. Count me among the doubters. Further, DOJ considers choice for consumers an issue only if affects pricing.
Under the settlement's terms the merger goes ahead, but ABI gives up its half-share of Constellation Brands, the US distributor of Modelo products. Constellation takes over one of Modelo's breweries and remains the sole exporter of the brands to the US. We are supposed to believe the cozy tradeoff rules out collusion.
The American Antitrust Institute points out that past mergers involving ABI have led to higher prices. Regarding choice, they argue, "If it is permitted to acquire Modelo, ABInBev could have a greater ability and incentive to foreclose craft and regional brewers from distribution channels through exclusive dealing." Judging from the company's history, ABI intends to do just that.
The two biggest conglomerates, ABI and SABMiller, have discussed merger. Governments must say no, never.
Distribution needs fixing. Beer Wars proposed eliminating laws in effect in most states that prevent brewers from marketing directly to retailers. Some craft brewers agree, but not all; others fear that in direct sales conglomerates would dictate choices to retail chains. With or without direct sales, laws must update in order to prevent all anti-competitive pressures.
Presumably, beer is not the only commodity affected by weak anti-trust regulation. Readers are invited to comment on others.
If readers who buy beer need more inspiration, they might visit a store that takes the extra effort needed to offer exceptional variety. My favorite in the US is John's Grocery, in Iowa City, Iowa. Those who can't drop by can take a virtual tour.
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