Posted on 02/26/2013 7:32:44 AM PST by 1rudeboy
Every day, the Web site BeerPulse tries to list every single new beer available in the United States. And that’s harder than you might imagine. Recently, the site posted Cigar City’s Jamonera Belgian-style Porter, Odell Tree Shaker Imperial Peach IPA, as well as a rye lager, a cherry blossom lager and a barley wine. And the list goes on, and on. In 1978, there were 89 breweries in the United States; at the beginning of this year, there were 2,336, with an average of one new brewery per day. Most of them are tiny, but a handful, like Sam Adams and Sierra Nevada, have become large national brands. At the same time, sales of Budweiser in the United States have dropped for 25 consecutive years.
So I was surprised to learn that the Justice Department is worried that Anheuser-Busch InBev, the conglomerate that owns Bud, is on the cusp of becoming an abusive monopoly. In January, the department sued AB InBev to prevent it from buying the rest of Mexico’s Grupo Modelo, a company in which it already carries a 50 percent stake. The case is not built on any leaked documents about some secret plan to abuse market power and raise prices. Instead, it’s based on the work of Justice Department economists who, using game theory and complex forecasting models, are able to predict what an even bigger AB InBev will do. Their analysis suggests that the firm, regardless of who is running it, will inevitably break the law.
For decades, they argue, Anheuser-Busch has been employing what game theorists call a “trigger strategy,” something like the beer equivalent of the Mutually Assured Destruction Doctrine. Anheuser-Busch signals to its competitors that if they lower their prices, it will start a vicious retail war.
(Excerpt) Read more at nytimes.com ...
I read an article last Fall in Bloomberg magazine discussing this topic. They highlighted that InBev’s CEO is all about margins and treats beer as a commodity. Their approach includes cheapening the product and is moving production closer to the client base. For example, those of you who drink Bass, take a look at where it’s made — most likely New York. And they are coming after the regionals too. Goose Island was bought and a lot of the production moved from Chicago. While I don’t like Budweiser, they mentioned that the old A-B used really good hops sourced from the same small farmers for decades. InBev has cut them off.
For those who have never tasted it I would recommend Sierra. I have never liked beer until I tasted it. It just may be one of the finest beers in the world. I hope their success does not spoil the beer
Fixed to reflect my tastes.
What’s in the water by the time it arrives in St. Louis ?
Check how much they give annually in terms of campaign contributions to the ‘rats. My guess would be this is like when they went after Microsoft. “Nice business you’s got here, wouldn’t want anything to happen to it now, would you?”
With hundreds (maybe thousands) of micro-brews in this country, I don’t think we’ve got a problem with competition.
If you go to northern Canada it is the premium American beer of choice and costs 50% more than any other American beer.
Nope... some people are brewing beer at home, and brewpubs are popping up...
They’d better not buy out Shiner Bock....that’s an act of war.
The game theory basis of DOJ suit is novel to say the least, but if the DOJ is suddenly so concerned about near monopolies in the beer industry why didn't they act earlier? For example why wasn't the joint venture between Molson-Coors and SA Miller in 2009 a concern?
Modelo will be owned by Bud? Oh great, there’s goes my fav. beer
Ick! Maybe you meant "popping" up. Which is not to be confused with the alternative of Joseph Ratzinger's German Brewery opening in the suburbs of Rome at the end of the week, which could be said to be poping up. :-)
I drink Foster’s, mostly (yes, I know it’s the Australian version of Bud). It is brewed in the U.S.
LOL. Thanks for the correcton.
I just found out Dos Equis is owned by Heineken.
The idea of the article is that there are only about 6 companies that control most of the beer production in the world. I think they are technically an oligopoly not a monopoly.
Inbev and Coors/Miller/Molson control most of North and Central America. Throw in Heineken and Carlesburg you have Europe covered too.
I run my own beer monopoly. I drink only what I make in my (or my fellow homebrewers)own kitchen.
Yuengling, Iron City, Genesee, Lionshead, Straub. Still plenty of independent breweries around.
Yuengling is also a Family owned private company. Not for sale unless you are a family member. Threw the Teamsters out a few years back too.
Go to the head of the class.
I am shocked, shocked that no one pinged you!
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