Comments on: Beer Oligopoly?

By: Scott-TheBrewClub

Scott-TheBrewClub — Fri, 28 Aug 2009 13:28:08 +0000

I can see people buying their product because its cheap(er), but you think people will switch to liquor instead of another beer? I think if craft beer can maintain its price somehow they might get a little more of the pie. I think they can gain market share from big-beer.

The taxes, well sure that sucks as the power to tax is the power to destroy. Still, the tax would be across the board rising prices on all beers, not just the big brewers. I think in that situation, people will buy less beer, or as you suggest switch their drink of preference.

I guess we’ll see how it all shakes out in the near future! Thanks for the comments everybody!

By: Patrick

Patrick — Thu, 27 Aug 2009 18:28:27 +0000

It might technically be an oligopoly, especially with AB merged with InBev now, but I don’t think it will matter much in terms of monopolistic pricing. Much of their market buys beer because it is cheap. If beer gets too expensive then their consumers start switching to other things more, like liquor. So a beer oligopoly wouldn’t have much pricing power since there are so many alternatives.

The biggest thing we have to worry about causing increased beer prices is actually taxes. There’s a proposal in Congress now to increase the federal excise tax on beer.
http://beeradvocate.com/news/2084374
http://www.rollbackthebeertax.com/

By: Scott-TheBrewClub

Scott-TheBrewClub — Thu, 27 Aug 2009 14:17:21 +0000

Wow. Not sure where the Times got their numbers or where the Beer Wars people got theirs but its still a huge percentage. If you think about it, Boston Brewing (Sam Adams) is comparatively huge (many even stopped referring to them as ‘craft’ brewers) and they are in that little slice of the pie as well.

By: Mike

Mike — Thu, 27 Aug 2009 14:03:36 +0000

I think if I’m not mistaken between InBev AB and MillerCoors they make up 95-98% of the beer sales in America. I got the figure from the Beer Wars DVD and was shocked that it was that high. I believe they said Dogfish Head has a hold of something like .002% in the market. Insanity as they are one of the top craft brewers in the country.
Mike´s last blog ..Yuengling Black & Tan

By: nate

nate — Thu, 27 Aug 2009 13:31:41 +0000

GREAT article Scott. I love reading stuff like this. I am worried that the price of craft beer could go up proportionately to the big boys’ stuff. We saw this with the car industry. Chrysler began using cheap parts in order to produce cheap cars. They began to raise their prices to afford better quality parts. Their cheap parts suppliers increased their costs, and thus we got a more expensive cheap car.

If the suppliers of malted barley raise their costs across the board, it stands to reason that the price of our cherished craft beer could see price increases.

I’m not a economists (although I have been reading extensively on the subject lately, namely the Austrian school of economics) so I could be wrong…but it does seem plausible.
nate´s last blog ..Hitachino Nest XH (Matured in Sake Casks)