Antitrust limerick of the day

February 1, 2013

From the delightful Limericks Economiques, a comment on the US Department of Justice decision to fight the proposed takeover of Grupo Modelo by Anheuser-Busch InBev:

Said Justice: “We doubt the propriety
Of imposing on US society
The burden to choose
From costlier brews
When opting for lower sobriety.”

More herehere, and here.

The merger would be another step in the ongoing consolidation of the global brewing industry. I’d describe it as “consolidation of global makers of mediocre* beer,” but it’s true, there’s been increased concentration in this industry over the last decade, continuing a trend that dates back (in the US, at least) fifty years or more. As a direct result, small “craft” brewers are taking a growing share of the market. They’re still under 10% of the US market by volume, but consolidation seems to work in their favor.

My advice: stop by tonight at the Malt House and try their wonderful selection of American craft beers. Current recommendations: Six Points Wet Hop (Kim Ruhl’s pick of the week) and Peak Winter Ale. Tell them “the professors” sent you.

*Not entirely true.  Anheuser-Busch inBev bought one of our favs, Chicago’s Goose Island, in 2011. It’s not clear yet how that will work out for the beer itself.

Update (Feb 1):  Our resident industry expert, John Asker, says the issue is distribution. The SAB-Miller merger was approved because it created a dedicated distribution network large enough to compete with A-B InBev. More here.

Update (Feb 19):  Great Planet Money piece.

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