Big Beer Takes Over

by DON MONKERUD

Forget about kicking back and enjoying an American beer; a massive wave of consolidation is transforming the industry.

According to a recent report by the Marin Institute, a California-based alcohol industry watchdog, a rush of buyouts and mergers in the last years of the Bush Administration has left two overseas giants in control of 80 percent of American beer consumption.

“How beer is marketed and sold in this country will never be the same,” said Charisse Lebron, corporate responsibility & advocacy manager at the Marin Institute. “Anheuser-Busch InBev and MillerCoors, controlled by parent companies SABMiller and Molson Coors Brewing Company, are all that really matter in the U.S.”

America is the world’s most profitable beer market, yet the U.S. has lost what was once a competitive industry. As recently as 2004, ten companies fought over world consumption; today Belgium-based InBev (Anheuser-Busch InBev) controls 25 percent of the world’s beer market. SABMiller, the second largest brewer with 15 percent of the market, is a London-based conglomerate that formed when South African Breweries acquired U.S.-owned Miller in 2002.

From 1947 to 1995, the number of large brewers in the U.S. fell 90 percent. As recently as 2003, American-owned Anheuser-Busch was the world’s largest beer company, with 12 breweries in the U.S. and 15 overseas, producing the world’s most popular beers: Bud Light and Budweiser. In 2004, the world’s third and fifth largest brewers, Belgian Interbrew and Brazilian AmBev, merged to create the world’s largest beer producer, AmBev.

In the buyout frenzy of 2008, AmBev bought Anheuser-Busch for $52 billion to become InBev and control the popular beers: Budweiser, Michelob, Stella Artois and Bass. Yearly sales for InBev topped $40 billion in 2008, surpassing SABMiller-Miller Lite, Miller Draft, Henry Weinhard’s-with $21 billion in revenue.

Today InBev is a behemoth with 151 beverage plants and 120,000 employees worldwide. The new company sells four of the top ten beers in the world, produces the first or second most popular beers in over 20 markets and ships beer to over a hundred countries.

In 2007, to better compete with InBev, SABMiller announced a joint venture with Molson Coors, the world’s fifth largest beer producer. Headquartered in Chicago, the newly formed MillerCoors is controlled by its parent companies, London-based SABMiller and Canada-Colorado-based Molson Coors, which reported gross profits of 70 percent in March 2009. SABMiller corporate leadership forms half of MillerCoors’ board and receives 58 percent of the profits.

Although microbreweries are growing in popularity-there were 1,300 in 2006-they represent a mere ten percent of total beer sales. There’s no way they can compete with the giants, who dominate the market.

Approved in record times by President Bush’s Federal Trade Commission, these beer mergers have a number of drawbacks. Charisse Lebron, author of the Beer Duopoly Report, predicts that American shareholders will have difficulty attending annual meetings overseas. Less shareholder involvement could lead to lower environmental and labor standards, while InBev and MillerCoors replace local beer distributorships with direct distribution from the brewery. The current three-tier system of alcohol sales and distribution was established 75 years ago to prevent aggressive sales tactics and give states oversight of alcohol.

“We advocate for the distributors because they are community based, have been around a long time, and are attuned and accountable to consumers and regulators,” Lebron said.

An even more troubling problem arises over taxes, especially with government facing reduced tax revenues. Federal alcohol excise taxes haven’t been raised since 1991 and, adjusted for inflation, have lost 40 percent of their value. State taxes are similar: Wisconsin hasn’t raised its alcohol tax to keep up with inflation since 1969 and has lost 83 percent of its value. Maryland’s alcohol excise tax was set in 1972 at 9 cents a gallon, but would be 38 cents a gallon if it were adjusted for inflation.

“Increasing taxes is the number one most effective way to reduce underage drinking and overall harm,” said Lebron. “The beer companies know that and are fighting it, despite the fact that alcohol harm in California alone amounts to $38 billion a year. In the U.S., it’s over $200 billion a year. Industries that cause harm, such as alcohol and tobacco, should be financially responsible for some portion of that harm.”

The beer duopoly is spending large amounts to prevent tax increases. The Marin Institute estimates that in 2009 alone the beer lobby defeated bills to raise alcohol taxes in 14 states that cost taxpayers $2.6 billion in revenue. If alcohol taxes were adjusted for inflation nationwide, it would add $6 billion to tax coffers. Beer producers spend lavishly to defeat tax bills: On the national level, InBev spent over $1.5 million in 2008. Additionally, InBev, MillerCoors, and its parent companies, spent almost $6 million lobbying state and local governments. They threaten state legislatures with closed breweries and lost jobs if taxes rise.

Americans are discovering that companies that once served their interest now determine their lives. Although some continue to support unregulated “free enterprise,” others find that powerful monopolies now determine government policy. It’s time to limit political contributions and control lobbying.

DON MONKERUD is an California-based writer who follows cultural, social and political issues. He can be reached at monkerud@cruzio.com.

Like What You’ve Read? Support CounterPunch
Weekend Edition
September 4-6, 2015
Louis Proyect
Migrating Through Hell: Quemada-Diez’s “La Jaula de Oro”
Charles R. Larson
Class and Colonialism in British Cairo
September 03, 2015
Sal Rodriguez
How California Prison Hunger Strikes Sparked Solitary Confinement Reforms
Lawrence Ware
Leave Michael Vick Alone: the Racism and Misogyny of Football Fans
Dave Lindorff
Is Obama the Worst President Ever?
Vijay Prashad
The Return of Social Democracy?
Ellen Brown
Quantitative Easing for People: Jeremy Corbyn’s Radical Proposal
Paul Craig Roberts
The Rise of the Inhumanes: Barron, Bybee, Yoo and Bradford
Binoy Kampmark
Inside Emailgate: Hillary’s Latest Problem
Lynn Holland
For the Love of Water: El Salvador’s Mining Ban
Geoff Dutton
Time for Some Anger Management
Jack Rasmus
The New Colonialism: Greece and Ukraine
Norman Pollack
American Jews and the Iran Accord: The Politics of Fear
John Grant
Sorting Through the Bullshit in America
David Macaray
The Unbearable Lightness of Treaties
Chad Nelson
Lessig Uses a Scalpel Where a Machete is Needed
September 02, 2015
Paul Street
Strange Words From St. Bernard and the Sandernistas
Jose Martinez
Houston, We Have a Problem: False Equivalencies on Police Violence
Henry Giroux
Global Capitalism and the Culture of Mad Violence
Ajamu Baraka
Making Black Lives Matter in Riohacha, Colombia
William Edstrom
Wall Street and the Military are Draining Americans High and Dry
David Altheide
The Media Syndrome Between a Glock and a GoPro
Yves Engler
Canada vs. Africa
Ron Jacobs
The League of Empire
Andrew Smolski
Democracy and Privatization in Neoliberal Mexico
Stephen Lendman
Gaza: a Socioeconomic Dead Zone
Norman Pollack
Obama, Flim-Flam Artist: Alaska Offshore Drilling
Binoy Kampmark
Australian Border Force Gore
Ruth Fowler
Ask Not: Lost in the Crowd with Amanda Palmer
Kim Nicolini
Remembering Wes Craven’s The Hills Have Eyes
September 01, 2015
Mike Whitney
Return to Crisis: Things Keep Getting Worse
Michael Schwalbe
The Moral Hazards of Capitalism
Eric Mann
Inside the Civil Rights Movement: a Conversation With Julian Bond
Pam Martens
How Wall Street Parasites Have Devoured Their Hosts, Your Retirement Plan and the U.S. Economy
Jonathan Latham
Growing Doubt: a Scientist’s Experience of GMOs
Fran Shor
Occupy Wall Street and the Sanders Campaign: a Case of Historical Amnesia?
Joe Paff
The Big Trees: Cockburn, Marx and Shostakovich
Randy Blazak
University Administrators Allow Fraternities to Turn Colleges Into Rape Factories
Robert Hunziker
The IPCC Caught in a Pressure Cooker
George Wuerthner
Myths of the Anthropocene Boosters: Truthout’s Misguided Attack on Wilderness and National Park Ideals
Robert Koehler
Sending Your Children Off to Safe Spaces in College
Jesse Jackson
Season of the Insurgents: From Trump to Sanders
August 31, 2015
Michael Hudson
Whitewashing the IMF’s Destructive Role in Greece
Conn Hallinan
Europe’s New Barbarians
Lawrence Ware
George Bush (Still) Doesn’t Care About Black People