More Types of Beer to Imbibe

The other day as I was drinking down the knowledge (and opinions…) fermenting on the Wall Street Journal’s Editorial Page, I came across an interesting piece on the proposed purchase of the remaining half (that it doesn’t own) of Grupo Modelo by Anheuser-Busch InBev – itself the result of multiple acquisitions and mergers.  (Since that article ran, both companies have still been maneuvering to try to complete the deal.)

Now, of course, U.S. antitrust law has something to say about potential monopolies, especially when it comes to consumer protection.  So, of course, the U.S. Justice Department stepped in, and poured water on the alcohol merger fire by filing suit and saying “you’ve got a potential monopoly brewing”.

Well, I’ve never had an issue with the prices and the variety of beers, and it was my amateur impression that the variety of beers available has actually been increasing in recent years.  That WSJ piece provided a clue of where to look for some interesting data – specifically, the number of sanctioned breweries in the United States.

A History of Legal Breweries in the United States

Here’s an graph of the number of sanctioned breweries from the Brewers Association:

Click to enlarge.

Click to enlarge.

How about that drop during Prohibition?  Pretty hilarious, if you follow the slope until Prohibition ended.  How many breweries do you think continued operating during that span?

Anyway, the relevant data points are the number of breweries operating in the last few years: 1,793 in 2010, 1,989 in 2011, and 2,126 in 2012.  It’s true – we’ve had a bit of a beer renaissance over the last few years.  You’re looking at the beer singularity, and this is only breweries registered with the association.  No, this doesn’t count your cousin’s brew operation in the basement.

Beer Variety at Risk?

You tell me – do you think letting the beer merger go through would affect your enjoyment of getting buzzed on oat soda?  Do you think two mega-breweries joining up will adversely affect any consumers, even, perhaps, the college beer-pong crowd?

And, more importantly, any craft beers you like from your area?  In the Bay Area I turned into a wine snob, but back East I was a fan of Magic Hat’s #9.  Milwaukee, what is Milwaukee’s b(B)est?

Oh, and you tell me… was this Friday DQYDJ piece watered down?

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Comments

  1. Jose says

    Personally I don’t think that would impact the variety of beers available. There are so many craft beers being sold and marketed that it would take a cataostrophic drop in consumption to hurt the micro’s. I live in the Sticks and there are two craft breweries within 15 miles of me! My biggest fear is the potential for Modelo light to get screwed up by ABI. I love that stuff!

    • says

      Modelo Light hasn’t been around for too long – 90s, right? Do you like the other Model varieties?

      Glad you didn’t say ‘Corona Light’. Corona already IS light.

  2. John S @ Frugal Rules says

    I don’t think the merger would have any impact on me or my enjoyment of adult soda pop! Like Jose said, there are so many craft beers being sold & marketed these days that I think there’ll still be plenty of options and no pricing issues. We have a few breweries in our area and I think they should’ve left it in the horse as my Mom always says. :)

    • says

      “I think they should’ve left it in the horse” – that’s amazing. Back East we had a good time dismissing some beers as ‘swill’, but we were never that clever.

  3. freeby50 says

    Seems puzzling that the DoJ would be worried about a merger in a market with 2000 competitors. But 3 companies own 75% of the market and one of those 3 wants to buy another to make that 2 companies owning 75% market share. Thats a concern for competition especially if the 2 biggest companies don’t seem to really seem to compete at all but instead just seem to consistently follow each others regular price hikes like.

    About 2000 of those breweries are ‘microbrews’ or ‘brewpubs’ which account for only around 1% of total beer sales.

    • says

      “That’s a concern for competition” – maybe so, but concern for competition isn’t a hallmark of American antitrust law, unlike in Europe (although concentration is one check-box, yes). The top concern should be for the consumer – plus I agree that HHI is a joke of a metric, especially since it depends on a subjective analysis of what the market is for that good.

      Beer? Imported Beer? Craft Beer? Why not alcohol in general? Too much subjectivity for me here… I mean, I can remember playing “Wine Pong” and even “Margarita Pong”, haha.

  4. says

    I think what the DOJ was worried about was controlling not just the variety but rather the ingredient chains. That being said, I love good beer, but often will drink not good beer b/c hell it all gets me to the same place

    • says

      Isn’t it funny? The more you drink in a night, the less you care about what you’re drinking – and perhaps, the less you care or notice about the things and people around you.

      The DOJ never knocked on my Grandfather’s door – the man grew hops in his backyard for the longest time, haha.

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