Beer Industry Oligopoly Essays

1935 Words8 Pages
Introduction The brewing industry was once held to competition among many breweries in small geographic areas. That was almost a century ago. The U.S. brewing industry today is characterized by the dominance of three brewers, which I will talk about in this paper. There are many factors today that make the beer industry an oligopoly. Such factors include various advancements in technology (packaging, shipping and production), takeovers and mergers, economies of scale, barriers to entry, high concentration, and many other factors that I will cover in this paper. Over the course of the paper I will try to define an oligopoly, give a brief history of the brewing industry, and finally to show how the brewing industry today is an…show more content…
By 1980 Anheuser-Busch, Miller Brewing, Pabst, and Stroh’s were the main four that made up nearly 80% of the market. By the mid-nineties it was down to three major players: Coors, Miller, and Anheuser-Busch. The beer industry includes packaging manufacturers, shipping companies, agriculture, and other businesses who depend on brewing. The American brewing industry employs approximately 1.66 million Americans today. There are generally three tiers of beer suppliers in the United States: domestic giants like Anheuser-Busch and Miller, importers, and craft brewers.
The Beer Industry Today In this paper I will be talking about the U.S. beer industry and in short an overview of the brewing industry worldwide. I will talk about the barriers to entry, economies of scale, government intervention, pricing, current market trends, product differentiation, and imports. The focus being mainly on the U.S. brewing industry oligopoly. The U.S. brewing industry has three major players: Anheuser-Busch, SAB Miller, and Coors/Molson. Anheuser-Busch is currently the largest brewer in the world, producing over 100 million barrels a year. Anheuser-Busch currently owns over 50% of the market in the United States, with Miller trailing behind at 20% and Coors at about 11% with the rest of the market occupied by imports and craft breweries. When analyzing any industry, how easy it is for newcomers to enter the market is a great importance. If there are high barriers to entry
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