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So now there's a "beer monopoly"? Is there anything Obama won't stick the govts hands

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So now there's a "beer monopoly"? Is there anything Obama won't stick the govts hands

Old 02-26-13, 12:46 PM
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So now there's a "beer monopoly"? Is there anything Obama won't stick the govts hands

This shows that there really is nothing that Obama is not willing to stick the government's hands into.

Despite the fact that the number of breweries has increased from 89 to 2,336 since 1978, Obama is using government control to prevent a "monopoly" from forming.

Obama's justification is not that any laws have been broken, but instead, that the law might, possibly, maybe, be broken at some point in the future.

In other words, Obama is treating them as if they are guilty, even though they are not. No charges have been filed. No laws have been broken.

But Obama, who has never started a business in his life, refuses to leave any area of the business world free from his meddling.


http://www.nytimes.com/2013/03/03/ma...anted=all&_r=0

Are We in Danger of a Beer Monopoly?

By ADAM DAVIDSON

February 26, 2013

Every day, the Web site BeerPulse tries to list every single new beer available in the United States. And that’s harder than you might imagine. Recently, the site posted Cigar City’s Jamonera Belgian-style Porter, Odell Tree Shaker Imperial Peach IPA, as well as a rye lager, a cherry blossom lager and a barley wine. And the list goes on, and on. In 1978, there were 89 breweries in the United States; at the beginning of this year, there were 2,336, with an average of one new brewery per day. Most of them are tiny, but a handful, like Sam Adams and Sierra Nevada, have become large national brands. At the same time, sales of Budweiser in the United States have dropped for 25 consecutive years.

So I was surprised to learn that the Justice Department is worried that Anheuser-Busch InBev, the conglomerate that owns Bud, is on the cusp of becoming an abusive monopoly. In January, the department sued AB InBev to prevent it from buying the rest of Mexico’s Grupo Modelo, a company in which it already carries a 50 percent stake. The case is not built on any leaked documents about some secret plan to abuse market power and raise prices. Instead, it’s based on the work of Justice Department economists who, using game theory and complex forecasting models, are able to predict what an even bigger AB InBev will do. Their analysis suggests that the firm, regardless of who is running it, will inevitably break the law.

For decades, they argue, Anheuser-Busch has been employing what game theorists call a “trigger strategy,” something like the beer equivalent of the Mutually Assured Destruction Doctrine. Anheuser-Busch signals to its competitors that if they lower their prices, it will start a vicious retail war. In 1988, Miller and Coors lowered prices on their flagship beers, which led Anheuser-Busch to slash the price of Bud and its other brands in key markets. At the time, August Busch III told Fortune, “We don’t want to start a blood bath, but whatever the competition wants to do, we’ll do.” Miller and Coors promptly abandoned their price cutting.

The trigger strategy, conducted in public, is entirely legal. In fact, it’s how airlines, mobile- phone companies and countless other industries keep their prices inflated. Since that dust-up in the late ’80s, the huge American beer makers have moved in tandem to keep prices well above what classical economics would predict. (According to the logic of supply and demand, competing beer makers should pursue market share by lowering prices to just above the cost of production, or a few cents per bottle.) Budweiser’s trigger strategy has been thwarted, though, by what game theorists call a “rogue player.” When Bud and Coors raise their prices, Grupo Modelo’s Corona does not. (As an imported beer, Corona is also considered to have a higher value.) And so, according to the Justice Department, AB InBev wants to buy Grupo Modelo not because it thinks the company makes great beer, or because it covets Corona’s 7 percent U.S. market share, but because owning Corona would allow AB InBev to raise prices across all of its brands. And if the company could raise prices by, say, 3 percent, it would earn around $1 billion more in profit every year. Imagine the possibilities. The Justice Department already has.

Representatives from AB InBev, however, have stated that the potential Corona acquisition is less about dominating the dwindling (albeit still $90 billion per year) U.S. beer market and more about a larger, global strategy. In that regard, AB InBev has been on quite a roll. The Brazilian firm Companhia de Bebidas das Américas, or AmBev, was born in 1999 around the concept of using innovative technology and managerial efficiency to disrupt the competition and channel the profits into buying them out. The company swallowed up several Latin American firms; in 2004, it merged with the Belgian giant Interbrew; in 2008, the new conglomerate, InBev, took over Anheuser-Busch. Along the way, it also picked up China’s third-largest brewer and the Canadian beer company Labatt.

We are still in the very early stages of what appears to be a global version of the scale-based consolidation we’ve seen in the United States over the past century. Before Prohibition, beer was largely a regional business, with thousands of small breweries serving markets often defined by city blocks. Until fairly recently, retail, food manufacturing, banking and countless other industries were also largely the domain of local or regional firms. And while in recent decades companies have scrambled to command international markets, the global fights have largely been over dominance of the United States, Western Europe and Japan.

But the goal of the Grupo Modelo merger, the company has stated, is to gear up for the big beer fight of the 21st century. As the traditional beer markets of the United States, Europe and Japan age, the most lucrative markets will be in China, India, Latin America, Eastern Europe, the wealthier countries of Africa and other places where, every single day, millions of young consumers will buy their first legal beer. On this front, AB InBev is already facing staunch competition from Denmark’s Carlsberg, Britain’s SABMiller and Japan’s Asahi. It’s not exactly worried about Sam Adams and Sierra Nevada.

These firms are among the many preparing for a global market several times larger than any that has ever existed. This helps explain why we have seen so many mergers in the past few months. The Justice Department recently approved the marriage of Penguin and Random House, and is expected to do the same with American Airlines and US Airways. Office Depot and OfficeMax are planning a merger of their own. These megamergers, however, do not inevitably create destructive monopolies. Carl Shapiro, the former chief economist at the Justice Department, told me that large mergers improve competition. Together, Penguin and Random House may be able to better stave off Amazon; American Airlines and US Airways can contend with Delta. Similarly, Office Depot and OfficeMax, once merged, may finally be large enough to really scare Staples. Fear, Shapiro says, is the key. Markets work best, he says, when “everyone has to watch their back.”

Shapiro admits that the Justice Department has lagged behind the work of many economists, and has been complicit in our fear of large mergers.(In some key decisions, like the 1962 Supreme Court ruling to block the merger of Brown Shoe and the Kinney Company, courts hurt consumers by preventing corporate efficiency.) But economic forecasting has improved since then, Shapiro says, and become more flexible. After AB InBev executives tweaked their Grupo Modelo acquisition plans, so not to affect their domestic interests, the Justice Department started to rerun the numbers. They’ll issue an opinion soon.

Over the coming decades, though, the opinion of American government officials might not matter quite so much. China’s National People’s Congress approved its first antimonopoly law in 2008, which, many economists fear, could be used to block foreign competitors and to promote local giants. India’s version, which went into effect in 2009, is even less clear. It’s quite possible that the true monopolistic battles of the 21st century will not be among massive corporations but among the self-interested governments. We can only hope that they don’t engage in a trigger strategy of their own.
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Old 02-26-13, 01:01 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

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Old 02-26-13, 01:04 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Time for another Beer Summit.
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Old 02-26-13, 01:20 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

If the premise is that beer is more expensive than it should be, I agree. A 12-pack of domestic swill shouldn't cost $15 under normal market conditions.

What's really amusing is how little folks understand how their own government works. Do folks really think that employees of major departments of the federal government are all swapped out under different administrations, or is it more likely that they are career civil service employees who have worked at Justice for decades under multiple administrations?

I guess it's easier to just blame Obama.
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Old 02-26-13, 02:02 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

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Old 02-26-13, 02:21 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

So I asked a friend of mine who runs his own brewery in College Station Texas. He's a judge, podcaster, and blogger of all things beer. I asked him for his input to get the small business perspective.

"Two brewing conglomerates control most of the world's beer supply. I think the stoppage is a good thing."
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Old 02-26-13, 02:45 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Thanks for nothing Obummer.
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Old 02-26-13, 03:21 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

A friend saw this when he was on a beer run on Oklahoma, but his wife wouldn't let him buy a bottle to bring home:

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Old 02-26-13, 03:31 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

I love Negro Modelo.

(By that I mean the beer produced by the company being bought).
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Old 02-26-13, 03:37 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by Navinabob View Post
So I asked a friend of mine who runs his own brewery in College Station Texas. He's a judge, podcaster, and blogger of all things beer. I asked him for his input to get the small business perspective.

"Two brewing conglomerates control most of the world's beer supply. I think the stoppage is a good thing."
I think he meant beer-like product not beer.
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Old 02-26-13, 04:27 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

So assuming these conglomerates DID have a monopoly, are they abusing it ? Do they tell bar owners, "If you want to sell our beer on tap, then you can't sell XYZ beer on tap?" and stuff like that?
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Old 02-26-13, 04:47 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Damnit Obama now you're taking away my beer? There's nothing more than I like than getting piss drunk and firing my semiautomatic weapons. How dare you sir!
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Old 02-26-13, 04:57 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by joeblow69 View Post
So assuming these conglomerates DID have a monopoly, are they abusing it ? Do they tell bar owners, "If you want to sell our beer on tap, then you can't sell XYZ beer on tap?" and stuff like that?
Monopoly laws are set up in a way that they try and stop it before it gets to that point. Eventually, a monopoly can dictate the market just be existing due to their size and influence.
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Old 02-26-13, 04:59 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by PenguinJoe View Post
Damnit Obama now you're taking away my beer? There's nothing more than I like than getting piss drunk and firing my semiautomatic weapons. How dare you sir!
If anyone gets too upset, Obama will even personally give you some beer.

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Old 02-26-13, 05:03 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Man, I can't even remember what the beer summit was about. I remember a white cop, a black guy, and Obama sticking his nose in it. Now I have to google.
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Old 02-26-13, 05:06 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Wow, it was even dumber than I remembered. Obama is so lame, even ducks call him lame, because that's how lame he is. Total Lame-o.
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Old 02-26-13, 05:08 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by Thor Simpson View Post
Man, I can't even remember what the beer summit was about. I remember a white cop, a black guy, and Obama sticking his nose in it. Now I have to google.
Instead, do an image search of the word "Asian" and have turn to

Incidentally, that will now be my new go-to reply for most anything.
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Old 02-26-13, 05:41 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

EXCERPT:
If the Modelo deal goes through, a duopoly would control more than 80% of the U.S. beer market.

(...)

America's small brewers have been on a roll in the past decade, claiming more than 6% of the U.S. beer market since the craft brewing revolution began in the early '80s. That 6% is divided by 2,400 small companies.

The duopoly already has tremendous influence over beer distribution in America.

In most markets, brewers have two choices, a so-called Blue and Silver distributor, who sells MillerCoors brands, or a Red distributor, who sells Anheuser-Busch brands. (The color codes describe the primary colors of the brewers' labels.)

Through so-called "equity contracts," the large brewers prescribe how much money distributors spend to sell and market their brands. In some cases, they have the right to approve or disapprove the manager of the distribution company. In some cases, they have the right to approve the succession plan of the distributor. In some cases, they have the right to approve the sale of a distributor.

Craft brewers constantly struggle to get the attention of these distributors.
http://www.cnn.com/2012/12/12/opinion/hindy-beer-wars

All states but Washington are three-tier states, where it is illegal for a retail outlet to buy from a brewery. Retailers are required by law to buy from a distributor. So we can only buy a beer from a microbrewery which has already gotten the attention of the distributors.

Last edited by Nick Danger; 02-26-13 at 05:50 PM.
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Old 02-26-13, 07:06 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

First, My Version of Obama took away my guns (but didn't).

And now, My Version of Obama is taking away my beer (but is not).

At least he didn't fuck up the horse meat industry. Oh, wait...
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Old 02-26-13, 07:50 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

As long as Budweiser stays an American company I think we're okay.
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Old 02-26-13, 08:00 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by chess View Post
If the premise is that beer is more expensive than it should be, I agree. A 12-pack of domestic swill shouldn't cost $15 under normal market conditions.

What's really amusing is how little folks understand how their own government works. Do folks really think that employees of major departments of the federal government are all swapped out under different administrations, or is it more likely that they are career civil service employees who have worked at Justice for decades under multiple administrations?
I guess it's easier to just blame Obama.
I agree with you on this. Our govt. is filled with busy bodies who justify their existence by creating more bureaucracy. I say lets furlow those mother fuckers. We have way to many new regulations and rules each year. If people are paying attention they will find this shit goes on regardless of the party in power. An administration just cant realistically change out all those people every 4 to 8 years. And some of them would be considered non political postions and cant really just be fired on a whim...
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Old 02-26-13, 08:12 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

People actually buy Budweiser and Coors beer?







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Old 02-26-13, 09:09 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by PenguinJoe View Post
As long as Budweiser stays an American company I think we're okay.

They're owned by a Belgian brewing company called In-Bev.
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Old 02-26-13, 09:11 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by PenguinJoe View Post
As long as Budweiser stays an American company I think we're okay.
Yea I think you missed the memo. The Busch Family sold out.....
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Old 02-26-13, 10:00 PM
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Re: So now there's a "beer monopoly"? Is there anything Obama won't stick the govts h

Originally Posted by chess View Post
If the premise is that beer is more expensive than it should be, I agree. A 12-pack of domestic swill shouldn't cost $15 under normal market conditions.

What's really amusing is how little folks understand how their own government works. Do folks really think that employees of major departments of the federal government are all swapped out under different administrations, or is it more likely that they are career civil service employees who have worked at Justice for decades under multiple administrations?

I guess it's easier to just blame Obama.
Obama is the boss. He is the CEO. He is the final decision maker.
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