Obama Administration Saves Beer Drinkers from Monopoly Takeover

Tuesday, April 23, 2013

Have no fear, American beer drinkers, the Obama administration is on the job ensuring the amber nectar you love so much will not succumb to monopoly.


After Anheuser-Busch InBev (ABI) decided to buy out Modelo’s entire U.S. business for $20 billion, the U.S. Department of Justice filed an antitrust lawsuit against the deal.


The federal government was concerned because ABI already controlled nearly 40% of the U.S. beer market, and gaining control of Modelo’s brands, which include Corona, would mean a virtual monopoly for the company that already sells Budweiser, Busch, Michelob, Beck’s and other popular beers.


The administration also alleged that the deal would result in consumers paying more for beer and would limit innovation in the beer market.


Negotiations between ABI and the Justice Department yielded a settlement that requires the two companies to divest some brands, including Corona, Corona Light, Corona Extra, Modelo Especial, Pacifico and five others to Constellation Brands Inc.


Antitrust Division chief Bill Baer said in a prepared statement: “The companies’ proposed merger would have reduced those two competitors to one–ABI. The proposed settlement announced today will create an independent, fully integrated and economically viable competitor to ABI. This is a win for the $80 billion U.S. beer market and consumers. If this settlement makes just a one percent difference in prices, U.S. consumers will save almost $1 billion a year.”


The Obama administration’s interest in standing up for beer drinkers is not surprising considering that last year Barack Obama became the first president in U.S. history to order the brewing of beer inside the White House. George Washington also brewed beer, but only on his private grounds at Mount Vernon.

-Noel Brinkerhoff


To Learn More:

Beer Bust Up (Corporate Crime Reporter)

Justice Department Reaches Settlement with Anheuser-Busch InBev and Grupo Modelo in Beer Case (U.S. Department of Justice)

Antitrust Agreement in Merger of Brewers (by Edward Wyatt, New York Times)

Ale to the Chief: White House Beer Recipe (by Sam Kass, White House Blog)


keith 3 years ago
If the government is getting involved, it's because big corporations want it. The only way a monopoly can form is through low prices and quality, or government intervention.

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