Policy

DOJ to Protect Us From Higher Beer Prices

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American beer drinkers are living in a golden age. In 1980, only 50 breweries were operating in the U.S., and consumers who didn't like watery beer were out of luck. These days, over 2,000 breweries are pumping out an enormous variety of craft beers—though traditional American-style lager still dominates the market. Imported brands are increasingly accessible as well.

Someone needs to tell the Department of Justice.

Worried about consolidation in the industry, the DOJ filed an antitrust suit yesterday to prevent Anheuser-Busch InBev (ABI) from taking over Grupo Modelo. The $20-billion deal would add Corona to ABI's stable of brands, which includes Budweiser, Becks, Goose Island, Michelob, and Stella Artois.

If the deal goes through, ABI and rival MillerCoors would account for more than 70 percent of the country's beer sales. And that, according to the complaint, would lead to less competition and higher prices.

Of course, public policy at all levels of government raises the price of beer. According to an industry group, federal, state, and local taxes account for 45 percent of the cost of beer. State-mandated wholesaling cartels inflate prices. State and local governments impose licensing restrictions on retailers. Some states are the retailers. The list goes on.

To fight the lawsuit, the brewers have hired Christine Varney, who led the DOJ's antitrust unit until 2011. According to The New York Times, Varney is credited with reviving antitrust prosecutions after a period of relative leniency during the second Bush's administration.

Among those celebrating an end to that leniency are the New America Foundation, a think tank that recently urged the DOJ to block the deal because it threatens "delicate moral, economic, and political balances." In its report, the foundation maintains that consolidation in the industry means consumers lack "a true diversity of choice."

Perhaps that resonates with someone, but for me the dizzying variety of beers on offer from craft brewers and major players seem to indicate a plethora of choice—and that maybe regulators should just leave awesome enough alone.