The big American breweries stifled beer choice, to the detriment of quality. When craft brewers and the remaining independents struck back with varied and flavorful beers, the big corporations moved to gain monopoly control of beer distribution. Now big beer corporations have gone global, and so has the battle for choice and against monopolies.

::::::::

You vacation on a remote island, happy to escape the marketing deluge we call civilization. At a roadside stand you see a handpainted sign for Paradise Lager, a local brand. You stop for one, pulled from an ice bucket. On a hot day it's a welcome drink, with a refreshing hint of lime zest. Nearby, women and children sell coconuts and eggs. There are no brand names for those. Not yet.

Then you spot the billboards: Sony, Toyota, Coca-Cola, and Budweiser. You should have known. Multinational corporations reach everywhere, because they can, because they're big.

It's progress and inevitable, or so the corporations say.

Wrong. Sony and Toyota may be unavoidably huge, but Coke and Bud do not have to replace local products. They've grown big because marketing has shaped demand.

Corporate growth has many consequences, and I'll write about one, loss of choice and quality in beer. It happens in other commodities, but beer is what I know best.

Beer comes in well over a hundred styles. For the choice and the best among them, thank business: independent breweries who served local or regional markets, and modern craft brewers.

No thanks go to the global conglomerates, which use deceptive marketing and corporate muscle to battle the innovators. The worst offender is Anheuser-Busch InBev, but they are not alone.

Governments must limit mergers and acquisitions by the giants and prevent monopolistic control of beer distribution. The public should demand it, because anti-competitive control of any commodity encourages the spread of a business model that threatens everyone.

How America Loved Lucy and Lost Good Beers

Warning: I'm going to rant about the lost beers of my youth, and earlier. Stay tuned; it's a tale of how big corporations used marketing to stifle competition and kill beers that weren't fizzy, pale and bland. They almost succeeded. Nowadays they offer beer in varied styles, but competition from craft brewers forced them to do it; take away the craft brewers, and the conglomerates will again slash choice.

Five hundred breweries operated in 1945. Most had a loyal customer base and were large enough to produce beer economically.

Yet most soon failed. Big and little companies went under and sold off their brands. In 1950 the top brewers from one to ten were Schlitz, Anheuser-Busch, Ballantine, Pabst, Rheingold, Schaefer, Falstaff, Miller, Blatz, and Pfeiffer. Of them, only AB, Miller and Pabst survive. The bottom came in 1983, when 53 companies operated 80 breweries.

The massacre followed the rise of television advertising and a flood of beer ads in national magazines. Regional breweries could afford neither. Big breweries toppled when they lost the ad wars.

The winning ads featured chest hair and swagger. Out went domestic bliss, housewives bringing hubby beer. Out went sophistication: beer-sipping at cocktail parties, Ballantine's endorsements from John Steinbeck and Ernest Hemingway. Miller showed how to sell beer; their "Miller time" ads starred race car drivers and oil workers.

Choice narrowed within brands. In the 1950s most had included at least three very different beers. Ballantine sold six. Then marketers decided that a brand should include only the flagship lager. In the 1970s a partial exception was made by adding a low-calorie Lite. As brands shrank, those of us who enjoyed the beers being dropped were flabbergasted, because sizable niche markets still existed.

Flavor lost out. The dropped beers had been flavorful styles, including malty bocks, creamy porters, and ales with bite. Even in the flagship lagers, companies reduced the malt and hops they used, thereby cutting flavor. Lites had even less.

Companies claimed the changes met changing public tastes, but advertising had primed the shift by focusing on one purpose for beer, to go down ice cold and quench thirst. Ads dropped the words hearty, full-bodied, gusto and robust. In came light, even before lites hit the market.

The public did not call for lites. Domestic brewers made several tries to introduce them, and failed. So did one overseas brewer. In 1967 I worked in a New Jersey liquor store. High-steel workers came in for beer to wash down lunch. One week the store featured a display of Amstel Light, from the Netherlands. Typical conversation:

"What's that s***?"

"Low-calorie beer."

"What about alcohol?"

"Lower."

"I'll take a quart of Schaefer."

Once again Miller ads showed the way, this time with sports celebrities arguing whether Miller Lite tasted great or was less filling. Sweat transformed lite's image.

Weak-flavored beers, like mild cheeses, appeal to beginners, but people move on to varied cheese and varied beer. American brewers took away the chance to graduate.

Cutting malt and hops shaved a percent or two off costs, but the greater reason to kill flavor lay in the one-beer-per-brand strategy. Ads and easy-drinking beer would train consumers to saddle up to the bar and name a brand, without elaborating, from age eighteen to eighty.

Around 1980 industry analysts predicted further attrition. Choice would shrink to flagship lagers and lites from two or three companies.

Rebel Alliance Battles Evil Empires

The analysts proved half right. By 2009 almost eighty percent of the beer sold in the US came from two interests. One is Anheuser-Busch InBev (ABI), formed when Belgian company InBev bought AB. The other is MillerCoors, a joint venture within the US market; by then Miller had become multinational giant SABMiller.

But meanwhile, the number of US breweries had turned around. Craft breweries rescued American beer and now number more than 2500. Craft beers form the fastest-growing segment of US beer sales, about eight percent by value. Choice is back.

Picture a brewpub whose taps dispense beers for all tastes, from mild-tasting cream ales to red lagers. The Dead Romanovs Imperial Russian Stout fills your mouth with the taste of blackened grain, and the head clings to your lips like the lover you wish you'd kept. For beer whose bite grips your tongue like a snake on an ankle, try the Hop Onslaught Pale Ale.

Thank you, small business.

The giants learned they'd not extinguished the demand for varied beers after all. When young adults started buying craft beers, the giants tried to cash in. That is their right, except when they fall back on deception and bullying. They push their imitations of craft beers. The goal is transparent, to hijack the bandwagon and knock everyone else off.

The most successful craft-beer imitation is a wheat beer that appeared overnight in bars, restaurants and liquor stores across America. From the website: "... we believe brewing is an art. And it's been that way since our head brewmaster and founder, Keith Villa, first created Blue Moon Belgian White Belgian-Style Wheat Ale back in 1995 in downtown Denver, Colorado." Keith sounds like one of those craft brewers, except that from its start Blue Moon was Coors, whose clout with distributors explains the beer's fast spread.

Still, the real craft brews keep growing, and a few older independents survive. The Big Two try to swallow and elbow the pests.

Swallowing has not gone far. ABI bought out Chicago's Goose Island and New York's Blue Point and own stock in suburban Seattle's Red Hook. But most craft breweries are not public offerings, and the owners refuse to sell to the giants.

Therefore the conglomerates crowd retail shelves, a strategy documented in the film Beer Wars. They crank out new brands and acquire old ones through mergers and buyouts. Never mind the old rule of one or two beers per brand; the Coors brand comprises five beers, Miller eleven, Budweiser eleven, and Bud Lite ten. Imitation craft-beer brands such as Blue Moon and ABI's Shocktop take in twenty or more.

Most of the new products have lackluster sales, many soon disappear, but they keep coming. In most states the store must buy from a wholesaler, who usually has an arrangement with one of the Big Two, and if you know the company's brands, they're easy to spot. Cases form pyramids by the entrance. They take choice places in rows, and their posters are everywhere. That's not enough for ABI, who aim to force distributors and retailers into an even greater focus on its products, according to both a craft brewer and a former distributor.

Even featured imports belong to one of the Big Two.

Globalization

Mergers and acquisitions happened in many countries, and good beers were lost. Next the conglomerates went multinational, and today a Big Four--ABI, SABMiller, Heineken, and Carlsberg--sell half the world's beer. ABI alone accounts for 21 percent. The Four use their distribution networks to move beers in international markets, and they brew popular beers far from their original homes.

It is possible to move beers or their brewing without impairing quality, but requires care the giants' managers often find uneconomic. Old customers protest what the Big Four have done to their beer. ABI draws by far the most complaints.

ABI swears they maintain quality, but their three top brands--Budweiser, Stella Artois, and Beck's--show otherwise. Complaints abound over Beck's brewed outside Germany. ABI cut alcohol in Stella and opted for cheaper hops and rice in Budweiser. A class-action suit has been brought against ABI for watering down Budweiser, but ABI makes up the losses by pushing their beers in new markets. Budweiser sales are down in the US, but up worldwide, and Wall Street loves ABI.

Brewpubs, microbreweries, and other craft breweries have become an international movement, but they are not immune from the giants. A worrying trend in Australia, where I now live, is that two multinationals, SABMiller and Kirin, own all but one of the big breweries and have bought out prominent microbreweries.

There's a world war of beer out there.

What Consumers and Citizens Can Do

Consumers can learn and avoid the conglomerates' brands. Package labels and brand websites often mislead. Wikipedia is helpful, but often out of date. The best sources are the beer-review websites beeradvocate.com and ratebeer.com, which identify owners of each beer. The reviews are also informative; they generally give the conglomerates' imitation craft beers lower scores than the real craft beers.

Whatever beer one likes, there are alternatives. Craft brews cost extra, for reasons that include generous helpings of quality ingredients, extra steps taken in brewing, low economies of scale, and small volumes in distribution networks, but they are not the only alternatives. Many imports are still independent. Within the US the older and surviving independent brewers offer their old lines and knock-offs of craft beers. They include August Schell, Christian Moerlein, City, Lion (Liebotschaner), Spoetzl (Shiner), Stevens Point, and Yuengling. Add Gennessee (Dundee, Hopper Whitman) and Huber; technically they're multinationals, but are owned by modest-sized overseas companies that are not guilty of anti-competitive actions in the United States.

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. 

Authors Bio:
Dan Vasey is a home brewer and reformed academic, living in Australia and retired from teaching after stints in Colorado, Papua New Guinea and Iowa. An anthropologist and human ecologist, his research specialty has been population and agriculture. Published works include An Ecological History of Agriculture: 10,000 BC – A.D. 10,000 and scholarly articles on indigenous agriculture in Oceania and on Icelandic population history. Recently he has been an editor and writer for the Berkshire Encyclopedia of Sustainability. Construction of his website on alternative futures is behind schedule.