Beer Price Hikes Spark Antitrust Concerns
The recently announced price hikes by Anheuser-Busch InBev and MillerCoors — which together control 80 percent of the U.S. beer market — has some observers wondering if the industry is setting itself up for an antitrust investigation by the Obama administration.
MSNBC reported Sept. 2 that the price increases, which come as demand for beer has fallen, is raising eyebrows.
“While the increases are not unusual or unexpected, they still raise a red flag,” wrote The Big Money columnist Rob Cox. “Both companies typically readjust the price tag on a six-pack every year to reflect changes in the cost of, say, barley or hops. But the ability of the two big brewing groups to do so now, while their customers are hurting most, highlights the tremendous pricing power that has accompanied consolidation in the industry in recent years.”
U.S. craft brewers have made a comeback in recent years, but rarely compete head-to-head with the industry giants. And the alliance between Miller and Coors narrowed a three-way battle among the top brewers to just two companies.
“Taking on Big Beer might be politically popular, not least because the three big brewers are now, for all intents and purposes, foreign-owned,” wrote Cox, who noted that the federal government has taken action against big brewing companies in the past, including ordering companies to sell off smaller rivals that they had acquired through purchase or merger.