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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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Guinness is owned by Diageo the worlds largest spirit producer. They also used to own Burger King, so we know they are all about quality
Its a crime against humanity that Diageo bought Guinness. Its like having the love of your life dying.
Old Milwaukee. It doesn't get any better than this.
while it appeals to my sense of outrage it just aint true. the craft beer market has taken over. i shop at the poor peoples super and their craft beer section is as large as the area for corporate brewed product. a 20 oz craft beer can and does often cost as much as a twelve pack of PBR. in some ways i think it is more American to buy the PBR, less pretentious, more of a working class consumer decision. the working class is finished, and a quart of beer costs more than a quart of wine.
at least in theory corporations have a public trust. this is why they can be sued. they operate on a profit based system because we want them to be efficent, we don't want them to operate like a bloated and inefficient socialist bureaucracy (even if they are).
if you want to get to the heart of corporate malfeasance i think you need to take a look at the NFL, which is really a club for rich owners. Ralph Nader has suggested that there should be public ownership of the teams, but of course we still respect the corporate model of efficiency. the NFL is an oligolpoly, which defines a much bigger market than beer, though they are connected. beer and football. i dont hate the beer makers, they adjust their product when they see craft brewers stealing market share, but the NFL, those guys could give a crap about the game, they get their money and they laugh all the way to the bank.
a lot of these craft beers get bought out by the Big Boys, but keep their names OFF the label;
on another note did you know that ODWALLA juice is owned by PEPSI? Nothing on the label about it
a friend of mine was working there when in happened oh, 10 years ago
" A lot get bought out " -
I don't think so. I'm in the Pac NW and there are Tons of small brewers. (Some of my local favorites are in Montana and Idaho.) Their distribution is extremely small, statewide or just regional. They don't have illusions of getting rich - probably just want to make a decent living and do what they love. It'll never be worthwhile for the big factory brewers to buy them out.
America has been on a 'bigger is better' kick at least since FDR's Depression programs & WW2. For many, they can't think outside that box. And can't even buy far superior, fresher beer from a local source.
In 1984, the proles are bitchin' about the size of the pour of a pint. I never figured out what measure of "Pint" was the basis: Imperial, English, whatever. Before and after the introduction of "metric".
Lincoln Chaffee was deeply imprinted with this unfortunate situation.
- Ned
You'll drink your shitty expensive beer and you'll like it, commie! This is nothing but the efficient workings of the capitalist system. A company exists to maximize its profits, so it buys up its competitors, cuts costs, and raises prices. Somewhere along the way, people got the false idea that companies exist to provide jobs and create prosperity, that is absolute bullshit.
There is a major difference between "companies" and "corporations."
Americans choose to drink swill. There are plenty of other options, but I guess this depends on where you like and what is available. I only drink that shit when there is no other options, like at a concert. I'm fortunate to be surrounded by some of the best breweries in the country. I drink almost exclusively beers brewed in NC. We have damn fine beer. When I walk into a beer bar with dozens upon dozens of good microbrews on tap, I still see people drinking the fizzy yellow piss and just laugh and think "low-brow mouth-breathers".
Yep, great stuff in NC, new brewery popping up every month it seems like.
I confess. When it's 100 degrees here at the lake, I like a old school yellow label coors banquet, ice cold, gurgling down my food pipe.
Those beers are served super cold to hide the taste of sub-par ingredients.
Try a micro Czech or other pilsner sometime in that situation.
DuPont to merge with DOW.
I'm sure they'll be some freshly unemployed chemists walking around, and some soaring chemical prices.
But, Hey, M&A is good for the markets...
Yes swill and damn expensive. Today, a 12-packs costs what case cost 8 years ago.
you can make your own beer.
there are even places around here with all the recipes and equipment to help you brew and bottle it.
It's pretty good stuff if you can get the right recipe. AND, you don't spend a shitload on watered down garbage, that just goes to buy more bad beer commercials. Fuck InBEV and whoever their competitor is.
Making your own beer should not be motivated by saving money; I doesn't really end up being cheap. But you made it yourself, you controlled the ingredients and there is no buzz like a self fermented and bottled buzz.
If gubbermint wasn't involved with every aspect of our lives, including your beloved social programs, there would be no reason for corporations to bribe politicians with millions of dollars. Statist idiots can’t have it both ways!
Looks like I picked a good year to stop being a drunk...or did I?
The author mentions Americans gladly lapping up 'swill' tossed at them by the 'mega-corporations' - however, the cartoon is mistaken - perhaps purposely so...?
Quite the contrary to the cartoon's caption, we have not had truly 'Free markets' for a Long Time - which leads the reader to (rightly) suspect a tad of some other motive when he sees key socio-economic issues portrayed in this fashion.
Clever deceit Always involves a smidgeon of Truth...
There are legitimate laws that protect natural rights and illegitmate laws that trample them. Sprott can't seem to distinguish between the two. Anti-trust laws clearly belong to the second category.
Home brew to the rescue!!! And on that note here is my mead recipe :)
- 5 lbs tart/sour cherries (pitted or unpitted)
- 6.6 lbs organic honey
- One pack of champagne yeast (Lalvin EC-1118)
- Room at 18-20 degrees C
- Remove stems and rinse cherries, put in pot and mash up
- Add in 4 litres filtered water and bring to boil for 5 minutes
- Reduce heat and simmer for 30 minutes on lowest heat
- Let cool until just warm not hot add in honey and stir until all disolved
- Put mix into primary fermenter and fill to 23 litre mark
- Cover and let cool for 4-6 hours
- Add champagne yeast
8-10 days later transfer to secondary fermenter with airlock
6-8 weeks later transfer back to primary stir in 3 Tablespoons honey disolved in warm water and bottle.
Leave sit for a year in a cool dark place (18-20C). Enjoy.
I've been doing mead for less than a year (brewed beer since 1987), so I might give this a shot. 6.6lbs seems like not enough honey for a batch this size. I always end up wishing my mead had more honey flavor and I use more than 12 lbs for 5/6 gallons.
We've added grapes juice, oranges and pears so far in different batches, but not cherries yet.
I've liked doing it so much, we started two bee hives this spring. First honey harvest won't be till next year, but it'll be nice to use our own for the mead.
Cheers!
My boil to keg time is 7 - 10 days. IPA, Red Ale and a Stout. Any more than that an you're doing something wrong IMO. and my ABV is around 4.25 sometimes it may be higher as can be detected in certain posts.
What IPA recipe do you like? I just started brewing, first one turned out good for what it was, an American wheat that came with all of the equipment. It took about a month, I bottled.
Yes. For beer.
The recipe with the cherries and honey is a melomel (mead with fruit) and usually takes a solid year of aging to start tasting good.
Thats' great, so long as you don't plan on drinking until Happy New Year 2017. Apart from that, it sounds tasty.
Most people aren't going to wait that long.
Do any of you watch The Squidbillies? If not, you should and be sure to find out who Dan Halen is. Watch the Ballmart episode. Funny as hell but sadly true.
Sadly, I like budlite.
I also brew beer. I like just about all of it.
For me, they have different uses. If I want something that tastes awesome and has high% then obviously not a 'swill' lol. You know, a couple with a nice dinner or something.
If I want to party, it's a 20 pack of budlite and possibly a couple jager shots.
I'd also like to note all the 'oh your drinking piss water' comments. That may be true, but i've yet to see someone drink 20 beers that are around 10% in one session. Those people are out there, and i'm sure everyone here knows one(lol) but I drink enough to know they are rare. I'd love to see someone try to drink 20 "Arrogant Bastards".
I live in a rural area and i'm actually an 'upscale redneck', lol, as I only drink glass bottles. I have a few poor friends dotted over the countryside that drink natural lite cans. It's like a social status thing. Fucking hillarious.
I've become a craft beer junkie, tried several last night at my bottle shop, Foothills Brewing just happened to do a tasting out of North Carolina. However I can still drink Bud Light no problem, especially on hot summer days on the beach. It tastes fine, I just put it in a completely different category.
BudLite = Piss
I will not buy one brand these guys own - too many small craft beers - sure raise prices to make up volume lost - but a consumer strike will bury them in debt that cant be paid
these guys will not survive once a consumer movement takes hold and is set up in parallel distribution network
Spoiler alert: I haven't seen the "Food" version, but in 1979, the book "Merchants of Grain" was published.
"The first and only book to describe the seven secretive families and five far-flung companies that control the world's food supplies. Little has changed their central role since Morgan's best-selling book first appeared in 1979."
I applaud all efforts to update folks on what's really going on, with so few sociopathic hands controlling so much of the world.
If the beer oligarchy has such a control over the industry, why are so many microbreweries doing so well? You don't like to drink swill? Then don't.
Further--and this is why arguments like these fail from the beginning--taste is a matter of...taste. I like tasty, full-flavored beer. But many do not. Who am I--or more properly, who is Jeff Nielsen--to say what people should like? Some people love a nice Belgian, but not me. I think it tastes like crap. Opinions vary, don't they?
There are occasions where I might like to drink a <gasp> Busch Light. I also love Sam Adams beers (mostly), and when I'm in the mood for that, I drink that. Oh, wait--I guess Sam Adams is part of the Oligarchy, isn't it?
So--Jeff, you're entitled to your own views as to what tastes like swill and what does not. In the future, try not imposing those on others in order to make your argument.
Your first paragraph answers your own question. Why are microbreweries doing so well? Because their is a percentage of us who prefer great tasting, all natural, full bodied and freshl brewed beer!
The bonus is, I am not contributing my money to any oligarch, corporation, multi-national, holding company, private equity firm, or gazillionare.
I have taken this concept to buying groceries, restaurants, banking and whatever else I can purchase from local privately owned, sole proprietorships and individuals.
No more of my money for the corporate whores, who by the way, if you eat or drink anything made by them, is probally full of crap, you would never want to ingest in the first place.
Starve the beast! Support your local businesses! It may not be the cheapest, but it will taste better, be better for you, last longer, or provide much better service and quality than you are used to.
You are what you eat and you get exactly what you pay for...
By the way, a great article and post!
The 1889 book "The Great Red Dragon: Foreign Money Power In The United States" pointed all this out, but few cared. Of course, it was buried, best it could, by the few sociopaths who used it as their playbook. Globalizaation means they win, you lose.
Try Coors Light.
Then try my urine.
Can you really taste the difference?
Coors Beer - known as "Fairy Piss" when I owned a bar on the Arizona/Mexico border in the late '70's.
Not planning on finding out, but I'll take your word for it.
LMAO. Pretty sure they'd figure it out if they had to drink the Coors Light at body temperature.
Would your urine be hot or cold? If it is cold, I probably won't be able to tell the difference.
Quit crying and brew your own.
I really enjoy the fact that a lot of these little micro breweries are popping up like mushrooms all over the place.
Founders...Dirty Bastard.....fuck yea.
I'm a big fan of Bell's, Wicked Weed, Stone, Green Flash, and Ballast Point. All make fantastic IPA's.
I believe microbrews were illegal until late 70s or early 80s based on an old prohibition law. My guess is the oligopoly didn't care about the regulations from the prohibition time expiring. Now they have to play catch up and buy out all these microbrews. They've already started to stuff their repackaged swill like shock top on the shelf to take away space for good microbrews.
We have some great micro's here in S.E. Louisiana, the biggest & best is Abita.
I can't remember the last time I drank 'swill'. I tried one swallow of Coors about 6 years ago, I used the rest of the can as bait to trap ground bees (yellowjackets) - they loved the swill.
Founders Porter mmmmmm good.
about 4000 craft breweries...........making REAL beer.........I will never drink that goat piss swill bud/miller/coors again
you are wiser than Bud
I like making my own beer when I can since I can experiment. I think it's kind of funny that the big brewers are buying out craft brewers for big piles of cash because their sales are going down since nobody likes their swill anymore. Support your local brewer or make your own..........