If beer deserves antitrust . . .

Aliza Rosenbaum and Rob Cox argue that since both Anheuser-Busch InBev and MillerCoors

. . . are raising prices at the same time, during a recession, and while beer demand is slumping. With an 80 percent market share between them, it almost begs for an antitrust review of the industry.

Well, if that's the criterion, what about higher education?

Earlier this year, the National Association of Independent Colleges and Universities announced with some pride that the average increase in tuition and fees at private institutions this school year would be the smallest in 37 years — 4.3 percent, just a little higher than inflation.   

(In case anybody misses the sarcasm, I think neither beer producers nor higher education should be sued by the antitrust authorities, absent a lot more evidence.)

Comments

[kyle8]

While I think that they probably both need to be investigated.

I know that the current economic zeitgeist is anti-anti-trust. But just as I believe that there is a legitimate government roll in fraud regulation, in lending regulation, and ecology.
I also believe that companies will absolutely collude at every chance and often do.

I think it has not been to our benefit that government has mostly abandoned anti-trust in the last thirty years. I also think it was criminal to allow so much stratification in the financial markets and real estate insurance market that we created monster companies that were too big to fail.

[akatony]

Check me on this one Sandy, but if the big beer companies raise their prices, and the smaller beer companies do not, then how exactly is this anti-trust?

Wouldn't it push more of the buying public to the smaller breweries since the prices would be closer together? Thus losing market share for the big guys.

Or am I missing something?

[Phil]

The prices of craft brews have also increased in recent years. Where I live, the "typical" 6-pack of craft beer used to cost around $8 2-3 years ago. Now the price is pushing $10. A big reason for that is that there was a "shortage" of hops worldwide that increased hops prices which led to an increase in beer prices. Even though they are virtually tasteless, the light American lagers have hops in them, so part of the price increase is probably due to hops price increases.

[Eric]

At least the beer companies charge everyone the same price. Schools, particularly colleges and universities, price discriminate to the greatest extent they can, and they brag about it. If they were any other industry, that would be asking for antitrust prosecution.

So, who's right? Is it okay to price discriminate in one area, but not in others?

[Brent]

BMC (Bud, Miller, Coors) are losing a lot of ground to the craft brewing movement, especially with younger (30 years or less) drinkers. However, they have a group of consumers that have been drinking their swill of choice for decades, and will probably not change unless they really feel like the big beer companies are really taking advantage of their brand loyalty.

Why not edge the price of products up a little bit to make up for the slower growth? It is very difficult to do what these guys do (make a clean, tasteless lager very cheaply and very consistantly), and they are losing thier young customer base. It's time to cash in all all those investments in process improvements and economies of scale.

[Kent]

The link to the beer antitrust article goes to the NYT story on education. Where do I find Rosenbaum and Cox?

[michael]

the price of pabst blue ribbon skyrocketed when hipsters started drinking it. now THATS an investigation we need.