(WASHINGTON) — Standard Oil was broken up in 1911. Could the beer industry be next?
A powerful Washington think tank says big beer companies are edging smaller microbreweries out of the market — and antitrust regulators are paying attention.
The D.C.-based New America Foundation is criticizing Anheuser-Busch Inbev, which is seeking to take control of Grupo Modelo, the maker of favorites like Corona and Modelo Especial. The Justice Department has lately been quizzing industry leaders about a virtual duopoly of the American beer market, with Inbev and its counterpart, Miller Coors, dominating the U.S. beerscape.
In a new report, the think tank argues for stronger state and local controls, all with an eye toward boosting the panoply of American microbrews.
“The diversity that we see, just in that little 5 percent of the marketplace…is greater than anywhere else in the world,” said Barry C. Lynn, director of New America’s Markets, Enterprise, and Resiliency Initiative, at a panel hosted at the think tank’s Washington offices Wednesday. “It’s a result of that marketplace that was put into place in the 1930s.”
Despite the post-Prohibition laws that separate brewers, distributors and retail sellers into a three-tier system, New America’s panelists accuse Anheuser Busch and Miller Coors of crowding out independent brewers by pressuring distributors to carry only their products.
“They have a great level of influence on what’s supposed to be an independent tier in pressuring those distributors to favor their product,” said Dogfish Head Brewery’s Sam Calagione, who appeared as a panelist Wednesday.
The beer market appears to be flourishing with independent brews, but it isn’t as diversified and variegated as it seems: The two giants own a stable of brands that includes Red Hook, Widmer, Goose Island, Blue Moon, Shock Top and Rolling Rock, having acquired the smaller labels over the years.
“Critics of today’s brewers miss the point that small brewers in this country are already enjoying a generous tax advantage over larger brewers and all importers, a policy designed to open pathways to the marketplace,” said Beer Institute President John McClain, in a written statement provided to ABC News. “In fact, the small brewers in this country are experiencing explosive growth — their dollar sales were up 14 percent in the first half of 2012 – and they represent the fastest-growing segment within the industry.”
Copyright 2012 ABC News Radio
Jennifer Graham, Deseret News
Brian Stelter, CNN Money