Treasury eyes beer industry ‘duopoly’ in urging more competition
The Treasury Department issued a report on Wednesday saying the beer industry needs more competition, highlighting its domination by two major brewers.
The beer industry is currently commanded by Anheuser-Busch Inbev and Molson Coors, the two largest-selling brewers in the U.S., account for 65 percent of the U.S. beer market by revenue, the report said.
Treasury noted the “significant growth in the number of small and ‘craft’ producers of beer, wine, and spirits” in the U.S. which it says has “helped build a strong global reputation for quality and craftsmanship.”
However, many beer distributors — with around 3,000 in the U.S. — end up becoming affiliated with either Anheuser-Busch Inbev or Molson Coors, leading to independent brewers consequently relying on distributors affiliated with one of the two companies.
The report quoted one industry commenter who described the situation as “a duopoly that together holds ninety percent or greater of the beer market in a specific geographic territory.”
“American consumers, small business owners, entrepreneurs, and workers should not have to suffer under the thumb of a highly concentrated beer industry,” Assistant Attorney General Jonathan Kanter of the Department of Justice’s (DOJ) Antitrust Division said in a statement. “Enforcement and regulatory authorities should have the courage to learn and the fortitude necessary to enforce the law and protect competition.”
Apart from affecting the beer industry, the Treasury wrote that this situation also affected adjacent industries like aluminum, which is heavily relied on for canning beer.
“Cider makers have complained about packaging supply monopolization, stating ‘can supply access is nearly impossible for small cideries,’ a serious problem when ‘canned products are a fast growing segment of the beverage alcohol sector,'” Treasury wrote.
The report recommended looking into production and distribution in the beer industry and encouraged the DOJ and the Federal Trade Commission to continue scrutinizing the industry mergers, acquisitions and related guidelines.
However, the Beer Institute, a trade organization for the beer industry, rejected Treasury’s report.
“The American beer industry is one of the most vibrant industries in the country and stands in contrast to the concerns laid out by the Treasury report,” the organization said on Twitter. “Despite being one of the most regulated industries in the U.S., the beer industry is experiencing an unprecedented level of healthy competition.”
The Brewer’s Association, a trade group mainly concentrated on craft brewers, praised the department’s report.
“We appreciate the recognition that despite growing numbers of craft brewers, beer remains a heavily concentrated industry, which poses competition challenges to craft brewers and consumers,” said the association.
“We applaud the Treasury Department’s recommendations on how to improve competition in the beverage alcohol industry, many of which align with the Brewers Association’s submitted comments.”
The Hill has reached out to Anheuser-Busch Inbev and Molson Coors for comment on the report.
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