Beer Price Fixing

As we learned last week from Aaron, the price of your favorite tasty brew is about to increase. InBev (which makes Budwiser and Bud Light) and MillerCoors (which makes, well, Miller and Coors) are both set to raise their prices this fall.

These two companies make up about 80% of the United State’s market share in beer. According to ABC News, this coordinated price increase raises a red flag in the eyes of market watches which may amount to some type of price fixing collusion. The government may be able to step in and curtail the price increases if it deems that something nefarious has occurred.

I strongly encourage the our FBC Blog followers to read the ABC News article cited above. It gives a nice brief history of the largest breweries, along with two prior incidents of the government stepping in on beer business.

In 1959 the Department of Justice stepped in and prevented the merger of Pabst and Blatz. Perhaps they foresaw the potential for a Hipster Beer Monopoly fifty years in the future!!!

Similarly, in 1966 the government forced Schlitz to sell off some of its holdings after it grew too large by purchasing La Batt’s and a California brewery. Schlitz was banned from acquiring anymore plants for 10 years.

Perhaps someday FBC will have the luxury of being called a “Beer Monopoly.”

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