America’s Beer Duopoly

Courtesy beersmith.com
Courtesy beersmith.com

New York Times Editorial

Consumers will benefit from the Justice Department’s antitrust suit to block Anheuser-Busch InBev, the country’s largest brewing company, from acquiring one of its competitors. This kind of action was seen less frequently in the Bush administration.

Anheuser-Busch InBev announced in June that it would pay $20.1 billion to buy the 50 percent stake in Grupo Modelo of Mexico — maker of Corona beer — that it did not already own. Together the two companies sell about 46 percent of all beer in the United States and more than 50 percent in big cities like Houston and Los Angeles, according to the department’s antitrust division. The proposed acquisition would leave the country with just two companies — the second being MillerCoors — controlling more than 70 percent of the beer business.

Under the Bush administration’s less robust antitrust division, a series of big mergers severely reduced competition in the beer industry and led to higher prices. In 2008, it greenlighted two mega-deals: Belgium-based InBev’s purchase of Anheuser-Busch, and a merger of the American beer divisions of SABMiller, a London-based brewing giant, and Molson Coors, a Canadian company.

Not surprisingly, beer prices started rising faster than the Consumer Price Index, according to a detailed study by the American Antitrust Institute, a research organization.

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