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Anatomy of an Oligopoly: the Beer Industry
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Anatomy of an Oligopoly: the Beer Industry
Written by Jeff Nielson (CLICK FOR ORIGINAL)
Why has the standard of living across most of the Western world fallen by more than half over the past 40+ years? Why is Western unemployment at an all-time high, with more than 100 million permanently unemployed people who are not allowed to work? Why does most brand-name beer taste like swill?
Most readers will see no connection between these questions. Some will see a connection between the first and second, and very few will see a common link between all three. In fact, we can answer all of these questions (at least in part) the same way, and the answer is spelled O-L-I-G-O-P-O-L-Y.
For those reading this who are unfamiliar with this concept, let’s take a moment for the definition of terms. An oligopoly is where a handful of corporations (or corporate fronts) have total control over a particular industry or sector. Once they have such control, these corporations inevitably engage in predatory behavior, such as price-gouging consumers and bribing public officials in order to obtain preferential treatment.
Such behavior is so common in the corporate world that Western (“capitalist”) societies have some of their strongest laws– our “anti-trust” laws – in place to prevent any group of corporations from acquiring such a chokehold. Unfortunately, our governments have ceased to enforce those laws (except in very rare circumstances), for more than an entire generation.
Why have Western governments collectively ceased to enforce some of our most important laws? How have these governments been so corrupted? Again, we can reply to these questions with a single answer: because the largest corporations have (systematically) bribed our public officials in order to obtain preferential treatment.
We see endless examples of this political corruption in the service of the mega-corporations, such as in the headline below.
Obama Seeks Trade Deals Sought by Biggest U.S. Companies
Want more evidence? Just look at all of the corporate welfare handed out to these corporate welfare-bums: trillions every year, in direct and indirect hand-outs. The larger the corporation, the more it mooches.
Our governments slash-and-burn our social programs, renege on pension obligations and do nothing about extreme unemployment, extreme poverty and the (even more despicable) epidemic of homeless people, all the while claiming that “we” don’t have the money to continue to properly fund necessary programs. Meanwhile, these same Traitor Politicians can always find a few billion more (of our money) to stuff into the pockets of their corporate masters.
What is the direct connection between oligopolies, which now infest virtually every sector of our economies, and record unemployment? It’s very simple: large corporations don’t create jobs. Large corporations destroy employment. This was the subject of a detailed three-part commentary. Those readers who want to read the complete explanation of how our large corporations create (massive) unemployment should refer to that previous series.
What is the direct connection between oligopolies and the collapse in our standard of living? Simple. The collapse in our standard of living has two components: massive unemployment and the staggering plunge in our wages (in real dollars).
The link between oligopolies and unemployment has already been noted. In addition, oligopolies = low wages (for everyone not in management). Why? Because, by definition, oligopolies destroy competition, and it is competition that leads to higher wages for employees.
How do companies “compete” with each other? One way is by competing for employees, with the workers being the winners of this competition. The best workers are offered the highest wages , which provide further incentive for employees to engage in their best efforts. By definition, oligopolies mean zero competition, and zero competition (plus massive unemployment) equals the lowest wages.
For many readers, these connections and explanations will be somewhat familiar and thus easily understood. What is more complex, and much less understood, is why the fact that the beer industry is an oligopoly is the sole reason why most “brand name” beer tastes like swill.
First some details on the beer oligopoly, via Bloomberg:
…the American beer market was already shifting to favor a handful of brewers. Anheuser Busch, Miller Brewing Company, and the Adolph Coors Co. led the way. From 1947 – 1981, the five largest U.S. brewers grew their market share from 19 percent to 76 percent. Last year they controlled 84%.[emphasis mine]
This is totally illegal. This is also a classic example of precisely the sort of scenario that our anti-trust laws are supposed to prevent from ever occurring. Why? Because once a handful of corporations have such overwhelming control over an industry (and its market), they can permanently prevent any other/new companies from competing against them.
How, precisely, do oligopolies destroy competition? This aspect of their predatory nature comes in two forms. One is simply buying-out any/all competitors who try to enter the marketplace. If the would-be competitor refuses to sell (or they refuse to buy), the oligopoly switches to Plan B.
“Plan B” is to destroy the would-be competitor, directly. The corporate conspirators do this via scorched-earth. They price their product below the cost of production, deliberately absorbing a loss on their operations. However, with their massive size (and massive financial resources) these mega-corporations could, if necessary, sustain such losses for years. Conversely, the much smaller, would-be competitor has only a tiny fraction of those resources, and thus can only continue to remain in business (at below-cost prices) for a much shorter period of time than the Corporate Cannibals of the oligopoly. Death by starvation: the oligopoly wins.
As a more general alternative, the oligopoly funnels some additional bribery-dollars to their political servants, getting them to enact “regulatory” changes to the sector that inhibit or even prohibit new competitors from entering the marketplace. Still, most readers will see no connection between the chokehold of these Corporate Cannibals and the swill-in-a-bottle they call “beer.” This brings us to another “quality” of all oligopolies: poor quality.
In a world where competition exists, what is another way in which companies compete against each other? They compete in terms of quality. In a world of competition, the best quality is rewarded (with increased market share), and so competing companies strive to produce the best product possible.
In the no-competition world of the oligopoly, quality becomes irrelevant. By definition, oligopolies force consumers to buy their products, no matter how poor the quality. If they wanted to, these “beer” makers could pee in a bottle and sell that to consumers, assuming those doing the urinating had a high enough blood-alcohol content. Meanwhile, cutting costs (by reducing the quality) fattens the bottom-line for the Corporate Cannibals.
Many readers will remain unconvinced. You can’t “force them” to buy particular products. Those skeptics need to read further into the Bloomberg article previously referenced:
Anheuser-Busch InBev, the world’s largest beer company, and home to more than 200 brands including Budweiser, is putting together an offer to acquire SABMiller, the world’s no. 2 brewer.[emphasis mine]
This is ludicrously illegal. If our corrupt governments had not completely abandoned the Rule of Law, Anheuser-Busch would never even attempt such a take-over, because (being so totally illegal) they would never-in-a-million-years get approval for such a transaction.
What would be the effect of such a take-over on consumers? Bloomberg, which is a part of the Corporate Media oligopoly, can’t help but gloat over the significance. It does so by describing how a “beer store” would look after the take-over.
This new mega-beer company could control a staggering 71 percent of the market, including every beer on the shelf here.
Drink this “mega-beer company’s” swill-in-a-bottle, or drink no beer at all. Your choice. Note that even if this illegal take-over is not approved, all it means is that two companies will keep manufacturing swill-in-a-bottle – and forcing you to drink it. See how oligopoly-member Bloomberg laughs at the slack-jawed serfs who drink this swill:
Bud Light brand, the no.1 selling beer in the country, has about $6 billion in annual U.S. sales and, despite its poor reputation among beer aficionados, accounts for one in every six beers Americans drink.
Translation? The serfs will drink whatever swill we put into a bottle, no matter how poor the quality, as long as we “market” it with enough girls in bikinis.
This is the world we have created for ourselves. We ignore the rampant corruption in our governments. We ignore the refusal of these puppet governments to enforce our laws. We ignore how these oligopolies have pillaged and plundered our economies – laughing at us as they do so.
If readers are not already nauseated, stay tuned. Next for publication is an analysis of the Food Oligopoly and what they deceive us into putting into our mouths. Warning: for strong stomachs, only.
Please email with any questions about this article or precious metals HERE
Anatomy of an Oligopoly: the Beer Industry
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The author seems to be enamored with the state. Is the problem that the antitrust laws aren't enforced or that we are foolish enough to think that laws will solve the problem? ZH has moved quite directly to a statist world view. Add in the site's annoying ability to lock up a computer and I'm not sure if the place is worrth the time.
https://m.youtube.com/watch?v=E2gZ-dxBhPk
https://m.youtube.com/watch?v=hnP4dTgR1Qo
Notice how the health minister is prepared to increase the price of supermarket beer but not reduce the Vat on Keg / pub beer to zero.
The objective of these health fascists is to totally destroy the Irish pub.
They are happy to see fake Irish pubs exported and see real Irish pubs totally destroyed.
These people are religious zealots.
Cromwellian puritans.
http://www.irishtimes.com/news/politics/varadkar-says-state-will-fight-a...
In traditional or at least older Irish society the women did not drink much.
This is why you see the 1960s Irish alcohol consumption much lower then the French.
But the men drank and they drank bucket loads of stout.........
The amount of beer consumed in the Ireland of the 1970s reached biblical proportions.
Usury causes distribution costs to rise.
The brewery must recover it's costs via sales
Eventually demand stops as people cannot afford to drink the stuff.
Irish pub sales of Irish made beer peaked in the late 1970s
Barley under acreage peaked in 1977.
We had the first euro depression of the 80s
Increased taxes made production unaffordable.
The supply chain of alcohol became increasingly international.
Irish alcohol consumption ( by that time much of it drunk at Home and by women who do not drink much Beer)) reached its peak in 2001, in 2002 we had physical euro introduction...and the rest is history
hi
Granny makes her own.
And why are the Banks and Wall Street types in tatters.........sham or show?
My favorite U.S. made lager that I have found so far, Lux Lager by Ninkasi Brewing Company.
http://www.beeradvocate.com/beer/profile/14400/119052/
With so many wonderful beers available today, why drink mass market swill?
Personally, I check out where its brewed to see if the local water supply is fluoridated. Next I check to see if ingredients are GMO free. Unfortunately, that knocks out a lot of US micro beers.
cos it's cheap. pure ethanol will do mixed with fruit juice. or something.
simple solution: transportation tax. if it ain't brewed within a days ride by horse, do it yourself or pay with an arm or a leg.
Brew your own.
Yep, going to do that.
May be tough to compete with some of my favorite breweries that have anywhere from 40 to 500 years of experience, but should be fun.
i'll stick to evan williams bourbon..it's inexpensive, the bottle is glass and i don't have to take a piss 40 times before i get drunk
Where have you gone Teddy Roosevelt, our nation turns its bloodshot eyes to you, woo woo woo.
Monopolies 'R' U.S.
Dow and DuPont want to merge....... THAT is going to cost everyone more than beer monopolies...
The TIGHTLY REGULATED phone monopoly that was broken up in the 80's has undone most of that split while the trend in most other industries is FEWER and BIGGER companies dominating markets....this isn't capitalism. NO 'free market' competition going on.
The big guys use government to get and KEEP their dominant status via regulations tthey themselves write. Boston Beer (Sam Adams) spent millions defending itself on a BS labeling suit brought bu the 'government' - another way for the big companies to pressure competitors. It's veven worse in the medical industry. The patent holder for a syringe that eliminates accidental prick risk (a big deal with HIV and HepC) can't get it manufactured because Beckton Dickenson dominates that market. The big guys write the specs for gov purchases and what gov will pay for via Medicare and Medicaid (effectively defining the market) to eliminate competitors.
This isn't even like the days of the Robber Barons where monopolies on occasion managed to help people - REDUCING prices in a way that benefitted consumers (think JD Rockefeller dropping the cost of kerosene) and CREATING businesses that EMPLOYED people (albeit at crappy wages and horrid conditions). Now it's about slashing jobs and RAISING prices as much as possible.
Lucky we still have our monks brewing besides the INBEV swill (actually we call it "Spa blond"). But I suggest anyone who can find them to try : Westmalle double (dark), Westmalle triple (copper), Chimay (4 types) Orval (Ale), Rochefort (3 varieties dark) West-Vleteren Abt (the strongest dark). This one you must go to the monastery to buy it.
besides Trappist Ales...(those are my favorites, have a few blue caps and Orvals left)
Red Ales like Rodenbach, Duchesse de Bourgogne
Lambics, had a thing for Cassis, seems hard to get now so I get Kriek (don't like the raspberry or peach)
Gouden Carolus, Kwak (licorice), Hoegaarden Verboden Vrucht (coriander), Delirium Tremens, Duvel
and a classic Belgian style, Gordon's Scottish Highland Ale, kept like it used to be (the Scots now drink lager piss), Douglas Scotch Ale direct from Scotland. Thought Gordon's was more exclusive, but Douglas was the same.
and try to drink them in their specific glasses (don't have the Kwak), it assists their style
when I can't get them (have to make a trip to Quebec prov. or big Toronto LCBO specializing in beer), it's Maudite (8%) from Unibrau (Quebec), Belgian style, available at the local beer store
a few Quebec surprises from Dieu du Ciel, Rosee d'hibiscus and Rigor Mortis (11.5%, only available in January until sold out.)
Nothing like this in Ontario, the micros here just try to make a better Molson's, a waste of palette, tried dozens of them, all sucked
"La Rosée d’hibiscus est une délicate bière de blé aux arômes floraux et acidulés. Sa couleur rosée provient des fleurs d’hibiscus utilisées durant le brassage. Son nez parfumé rappelle la fraîcheur du pamplemousse et sa texture est enveloppante en bouche. Désaltérante, elle est idéale à savourer durant les chaudes journées d’été.""en Janvier
D’inspiration trappiste, la Rigor Mortis Abt est une ale brune qui présente un corps intense de malt et des goûts de caramel et de sucre d’orge. Très peu amère, elle offre des saveurs complexes de fruits rouges et d’épices dues à la levure utilisée."
and translated
"The Dew is a delicate hibiscus wheat beer tart and floral aromas. Its pink color comes from the hibiscus flowers used during the brewing process. Its fragrant nose recalls the freshness of grapefruit and its texture is enveloping the palate. Refreshing, it is ideal to enjoy during the hot summer days. "
"in January
On Trappist inspiration, Rigor Mortis Abt is a brown ale that has an intense malt body and tastes of caramel and candy. Very little bitter, it offers complex flavors of red fruit and spices due to the yeast used. "
Chimay Grande Reserve!!! Dark and delicious
You just watch the Irish authorities response to this.
They will claim the poor should be stopped from drinking out of cheap cans, they must be stopped.
The health fascists will be brought out again.
Never never will they abolish Vat on pub beer.
Always the prices must rise.
at the same time a 24 pack tin of Carlsberg brewed and canned in Dublin is selling for 25 euros.
This is trucked down from Dublin.
It is not put on rail as the companies cannot afford the handling costs (income Taxes)
If Heineken could increase sales in Cork it would be happy.
It's main seller at Christmas time in Ireland is the 24 tin Christmas pack selling for 28 euro in supermarkets.
This is canned in Holland and shipped to Ireland
This requires inputs.
Expensive aluminium, the oil for transport and labour handling
Cork lads would prefer to drink out of a recycled (washed glass) in a pub within 5 minutes walk of the Heniken brewery...... But they cannot as a result of beer taxes.
Do you think these companies want increased costs?
You have got to be kidding me.
There is a religious war in Ireland and the wars battleground is the public house, most Irish footsoldiers have been wiped out, they are now deserted battlefields.
It costs very little to brew the stuff, expensive beer and inexpensive beer.
The real costs are mainly transport of the finished goods and Usury.
In a name .. Diageo.
They run and control all beers sold in pubs in Ireland. If it has Guinness written on the pub, then it must sell Diageo brands only. No exceptions.
Beer in Ireland has been bought and sold long, long time ago. The best bet is to source micro beers from local brewers. My most recent favourite is the Goat's Butt, brewed in Antrim Fine wheat beer, lovely
If you took the time to look at the second beamish video I posted you would see this is a old practice in Ireland.
This is not the reason why beer sales have collapsed
The "authorities " have kept the tax high even when cashflow collapsed
Over half of the total tax take in Ireland is not respent inside the Jurisdiction.
https://m.youtube.com/watch?v=8o28aWtm-3M
No American is forced to drink the horse piss bottled by the likes of Anheuser Busch, Miller, Coors, etc. I sure as hell don't waste my money on Oligopoly bottled horse piss. It's not a necessity. There are very good products bottled by hundreds of good craft breweries available just about everywhere. The fastest route to dismantling the Oligopolies and the Organized Crime in Government is to not buy their products. That would also put a serious dent in the pockets of the bribery-besotted political parasites.
• Abolish the Federal Reserve System;
• Hold banking stock and bond holders and banking executive officers completely responsible for the totality of losses even if it exceeds paid in capital and face value of bond holdings;
• Prosecute and severely punish the political parasites for accepting bribes (I.e., campaign contributions, honoraria, fees for speeches, free rides on Crony Capitalist Corporate jets, etc.),
• Prosecute Crony Capitalist Corporations and Oligarchs for offering and paying bribes to political parasites;
There's no worse beer oligopoly than "The Beer Store", (Brewers Retail) in Ontario, founded in 1927, a monopoly for mostly Labatts back then.
Now owned by Anheuser-Busch, Coors/Molson and Sapporo, all foreign companies with a minority holding for Molson.
Now lots of beer imported from Anheuser-Busch, Coors, Sapporo, supported with advertising changing the beer drinking habits of the masses. Profits exported.
Competition? Beer selection? nil
If you're a micro who wants to expand your market from a pub, try getting your product listed at the Beer Store. If they consider you, it will cost you $50,000 to get listed, then at their whim they can de-list you and you've lost the $50,000 and your company is down the drain.
"For example, if a non-owner brewery wished to sell a lager, an ale and a light beer, each in a six-pack and twelve-pack format, in the majority of TBS locations, they would pay The Beer Store – and in turn its brewery owners – upwards of $120,000 for the privilege." http://freeourbeer.ca/home/the-beer-store/
Beer sold in "The Beer Store" for Canadian consumption is decided by foreigners, their monopoly.
There's also the LCBO, Liquor Control Board of Ontario, Government run monopoly who decides what you can consume, sell some imported beer, but their selection and allocation has been dwindling to a point of only seeing corporate products available.
Quebec has it better.
Ps I do admit that today Guinness has a very bad reputation amongst Cork publicans and is boycotted by its most successful publican.
Heniken ( the last large scale brewery in Cork) is ok to work with.
But what is stopping their business dead is usury pure and simple.
The cheapest pint of beamish in Cork (now brewed in the Murphys Plant)is 3.50
Without usury it could be sold at between 50cent and 1 Euro with enough profit for both the publican and brewery
You cannot imagine the tax costs in beer, this must be recovered in Sales.
Since the euro came in beer sales have been declining.
Most of the small and many of the large pubs in Cork has been wiped out.
is
ditto for the AMA, except they have a MONOPOLY. why have prices skyrocketed? no secrets there.
big shipping? USPS, UPS, FedX
LOL...Haircutting Business!! Must be "Certified"
they are all part of the "Rule Makers". Washington is the Puppet....Of course Obama and his goons did not write the "Obamacare" legislation. They don't even read it.
The results are Oligopolies....the eco political root is fascism.
If you don't like it that McBeer (generic, mostly flavorless) is HUGE, buy micro-brewery beer. Capitalism works (although we have Crony Capitalism, not real Capitalism).
Dogfish Head beer (Milton, DE, started in Rehoboth Beach, DE - http://www.dogfish.com/ ) is awesome!
"If they wanted to, these “beer” makers could pee in a bottle ..."
When your last beer was at Munich airport, then you crack the can with friends in US to celebrate return home that is exactly what you may think of drinking.
Then again, there is always a strawberry taste (!?!?) beer to indulge in, or IPA as well, with great taste as if chewing a pine needles...all products of restless "innovators" (and surprising number of admirers).
We Americans are about quanity not quality. You ever try to drink a 12 pack of one of those fancy dark beers? Hell your stomach swells up so much it will make you fall out of your tree stand. If I tape a funnel and hose to my leg I can kill a case of Keystone Light and not even have to get out of my tree
Expand your horizons. There are session beers which you can enjoy. Far better than the poison they pass off to you from the big corporate bastards. (If they gave a damn about their customers, they wouldnt use the ingredients that they use.)
https://m.youtube.com/watch?v=wln1nPJekEA
Try Murphys beer in a can
It's the best canned stout you can buy.
Most foregin people like Murphys because it is sweeter
This article is pure Austrian horseshit.
The crisis in the industry is a result of usury.
Since Industrial times beer was always a volume business.
Not craft beers.
Beer best illustrates the problems of distribution in our economy.
Because of both its weight volume and "liquid " nature it was produced and consumed locally.
In England it was the only option to stay alive in the cities as the water would kill you within a matter of weeks.
It's the taxes on Beer both direct (Vat) and indirect (INCOME TAX rtc) which causes it's non consumption.
This i
As an owner of a craft brewery, I can confirm all the local brewers are pissed as hell at this proposed merger.
The socialist oligopoly theory described above doesn't work, it's not even logical.
If Bud buys SABMiller, beer connoisseurs will not decide to switch to Bud Light if it was dropped to $1 a six pack in order to "drive out" competitors.
The beer market is too differentiated and supported by so many different kinds of customers, the suggestion an oligopoly can somehow "force" us to drink its beer is ridiculously absurd.
Even if the products are undifferentiated, a big brand never undercuts competitors by the price of its regular labels. It introduces a lower priced label, of the same qualifications as the competitor's, to kill the competitor and discontinues the label after the competitor dies.
If they buy out a competitor, they don't dicontinue the label if it has already established a market share, only increase the price to give them the same profit as the other labels, since they don't care which label produces them the profits as long as it produces them profits they expect. So there will be competition in labels, but not corporations.
The only time this strategy fails is when they don't recognise the new product in the market as a competitor or don't have the competence to introduce a label to challenge it. These things usually happen in the technology space.
What the author doesn't recognise is that there is a conflict of interest between any business owner and the society at large. While the society at large benefits from competition, individual businesses owners do not. So business owners, pursuing their self-interest, are bound to seek ways to destroy competition and erect barriers to entry. If the society reacts by enacting legislation to prevent the emergence of monopolies, they form either cartels or oligopolies and bribe the enforcers if necessary. This is bound to happen in any society where the ultimte justification for all of anyone's actions is pursuit of individual self-interest. This can be avoided only when it is acknowledged that concentration of power, financial or otherwise, in the hands of some individuals is against the interests of the rest of the individuals in the society and they can act collectively to restrict such accumulation of power. Progressive rates of taxation on incomes, including extremely high rates like 90%, can be used to limit this concentration of financial power. But none of this is going to happen in a society where the operating principle is "Greed is good".
I havent drank mass poison 'beer' since I was in my 20s and didnt know better. Introduced my 22 yr old nephew to the good stuff and now he and his buddies are fans. They could give a damn what the big brewers do. They don't drink that stuff. They wouldnt drink it if they gave it away for free.
https://m.youtube.com/watch?v=UNqqgzb9sLM
https://m.youtube.com/watch?v=UNqqgzb9sLM
Dork....you did a Yeoman's job with this thread. Kudos dude.
If I ever want to know anything about beer, you are the man I am going to.
+1,000
Thanks Jim,
I just wanted to set the record straight....
Those usurious bastards want to kill the ghost of Christmas present and I fear they have succeeded.
https://m.youtube.com/watch?v=ci_mW4jVHX0
At 17.30 - a famous poem about wine women and song
g
Much of what Mr. Nielson writes is true, but there's far too many choices of great beer for consumers in the USA to enjoy. Here in Minnesota, we have a dozen craft breweries in the Twin Cities, and Schell's in New Ulm! Shell's is a family owned/run brewery dating back to 1860. A 12 pack in bottles can be found for $11 in many liquor stores, and their Pilsner is as good as it gets anywhere on Earth.
Anti-trust laws are not enforced anymore and that is tragic. A classic example is Wall Street Ponzi-schemers who get away with theft and fraud from the Justice Department, but of course, Obama put Lynch in to replace Holder, and she sat on the New York Ferderal Reserve Bank's Board of Directors from 2003 to 2005. We can trust her, can't we?
Arkansas leads the nation in rice production. Like to guess who the number 1 buyer of that rice is? No not China. It's..... Anhueser Busch! Ta da! No German Purity Law in play here folks!
If you dig deep you will find that a lot of "craft beers" are owned or partners with the big boys
Budweiser should only be served with aspirin. Plus, American brewers use GMo wheat, barley and hops to concoct their swill. Drink Guinness or some other independent European import to stop feeding the corporate facists who don't give a damn about consumers.