|Beer prices already have been rising, before the proposed merger|
That could shrink to two companies if Anheuser Busch InBev's $20 billion purchase of Grupo Modelo is allowed to happen. The US Justice Department filed suit yesterday to try to prevent the purchase for antitrust reasons.
It's interesting that the Justice Department is worried about the price of Bud Light. The Justice Department released a statement saying "competition (between the beer giants) has resulted in lower prices and product innovations that have benefited consumers across the country."
Is that true? Maybe the lower-priced part. Although looking at the chart above, maybe not.
But the true product innovations have come from small craft breweries, which have made the US the most exciting country for beer aficionados in the world -- despite the 75% market dominance by goliaths making boring crap.
Is America really better served by $9.99 cases of Bud Light? Or would it be better for the country if Belgium-based Anheuser Busch InBev conspired with UK-based Miller to raise prices of their bottom-of-the-line pisswater?
Price-fixing among the major beer brands could only help artisanal brewers, whose products cost more and who can't compete on economies of scale. If PBR costs more, it becomes less of a stretch for consumers to spend an extra buck on a bottle of something better.
The danger is distribution: that two beer behemoths could completely dominate distribution channels and prevent smaller brewers from getting their product out there.
I don't see how having two behemoths instead of three makes a difference. Supermarket beer selections are already completely dominated by the big three.
I'm a Democrat and generally in favor of government intervention. There are plenty of arenas where I think a little more government regulation would be good for consumers and good for the country.
But I just don't see mass-market beer as one of them. If the price of tasteless mass-produced beer goes up, people who care about flavor will drink better, and people who care about volume will drink less. I just don't see how either of those is bad for America.