Marin Institute

Study Summary

While the U.S. beer industry has been consolidating at a rapid pace for years, 2008 saw the most dramatic changes in industry history to date. With the creation of two new global corporate entities, Anheuser-Busch InBev (ABI) and MillerCoors, how beer is marketed and sold in this country will never be the same. Anheuser-Busch InBev is based in Belgium and largely supported and managed by Brazilian leadership, while MillerCoors is majority-controlled by SABMiller out of London. It is critical for federal and state policymakers, as well as alcohol regulators and control advocates to understand these changes and anticipate forthcoming challenges from this new duopoly.

This report describes the two industry players who now control 80 percent of the U.S. beer market, and offers responses to new policy challenges that are likely to negatively impact public health and safety. The new beer duopoly brings tremendous power to ABI and MillerCoors: power that impacts Congress, the Office of the President, federal agencies, and state lawmakers and regulators.

Summary of Findings

• Beer industry consolidation has resulted in the concentration of corporate power and beer market control in the hands of two beer giants, Anheuser-Busch InBev (ABI) and MillerCoors LLC.
• The American beer industry is no longer American. Eighty percent of the U.S. beer industry is controlled by one corporation based in Belgium, and another based in England.
• The mergers of ABI and MillerCoors occurred within months of each other, and both were approved much quicker than the usual merger process. MillerCoors was completed in approximately eight months, while the ABI merger was completed in only five.
• Shareholder rights and opportunities to participate in decision making significantly diminished with the two mergers. With both corporations based outside the U.S., shareholders are challenged to attend annual meetings and generate support for shareholder resolutions.
• The power of the duopoly poses great threats to the already weakened three-tier alcohol regulatory system. ABI has stated its interest in controlling up to 50 percent by volume of the beer distribution capacity in various states. Both ABI and MillerCoors have forced egregious and potentially illegal contract provisions upon distributors who often have no choice but to comply.
• The duopoly paralyzes state legislatures with threats of brewery closures and job losses every time an alcohol tax or fee increase is proposed.
• ABI and MillerCoors, their related associations and business partners, have spent tens of millions of dollars lobbying Congress, the Federal Trade Commission, the Department of Commerce, the White House, the World Trade Organization, and state legislatures opposing alcohol tax and fee increases, among other policies.
• Beer remains the cheapest and most widely used drug in America, despite research that shows higher prices will reduce or prevent alcohol-related harm. Marin Institute recommends that Congress and the Obama Administration re-open and reconsider the inadequate review of the mega mergers approved in the final year of the Bush administration.

In addition, Marin institute recommends strong federal and state legislation to:

1. Protect and defend the three-tier alcohol production and distribution system;
2. Curb the alcohol industry’s undue political influence globally and domestically;
3. Raise alcohol taxes and fees to mitigate the damage of alcohol to society and to reduce excessive alcohol consumption and underage drinking.