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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 $6 billion in annual U.S. sales and, despite its poor reputation among beer aficionados, accounts for one in every six beers Americans drink.
Translation? The serfs will drink whatever swill we put into a bottle, no matter how poor the quality, as long as we “market” it with enough girls in bikinis.
This is the world we have created for ourselves. We ignore the rampant corruption in our governments. We ignore the refusal of these puppet governments to enforce our laws. We ignore how these oligopolies have pillaged and plundered our economies – laughing at us as they do so.
If readers are not already nauseated, stay tuned. Next for publication is an analysis of the Food Oligopoly and what they deceive us into putting into our mouths. Warning: for strong stomachs, only.
Please email with any questions about this article or precious metals HERE
Anatomy of an Oligopoly: the Beer Industry
- advertisements -
Nothing like a growler full of bourbon barrell aged beer!
wait until InBevMillerCoors gets a bill passed banning the posession of microbrew equipment and ingredients!
Thanks Usurious, butt this doesn't change the fact that these soulless vampires are doing exactly what the above article says they are doing. The revolving door policy insures that laws are allowed to be broken.
F$CK the corporations, F$CK the regulators, and a double F$CK the media.
Spoctor Din
So glad some hometown folks here opened the first one in this county. Got to help do the build out and got a Founder card good for a free beer everytime I walk in. All locally sourced brews, wine, etc. Have 16 taps on hand and place is always busy. (marker48.com)
+1 I can't drink anything I see advertised on TV anymore.
I can't drink anything I see advertised on TV anymore.
You watch TV .... ???? Never turn it on.
'The standard of living has declined the last 40 years?' No it hasn't. Life was boring before computers.
'People are unemployed because of sinister forces?' No. People are unemployed because computers are replacing them.
USA people are unemployed because minimum wage laws and environmental laws are incompatible with free trade pacts as currently worded..
'The standard of living has declined the last 40 years?' No it hasn't. Life was boring before computers.
'People are unemployed because of sinister forces?' No. People are unemployed because computers are replacing them.
USA people are unemployed because minimum wage laws and environmental laws are incompatible with free trade pacts as currently worded..
I did not get my first home computer until 1995...
And since childhood I do not recall ever having the luxury of being bored...except once.
When we wanted entertainment from the parents, ONE TIME we whined, "Take us to the beach". My mother responded, "So. You are bored?" When we replied, and let me remind you that it was ONCE...AND ONLY ONCE, "Yes", then we were given a long list of chores to do. That is burned as a BRANDING IRON upon my brain.
I learned at a very early age...NEVER GET BORED.
And amazingly my imagination developed and I always found something to do. It tended to create that which is sadly lacking in today's society...AMBITION.
Perhaps those computers have not served to increase the standard of living...AT ALL.
People are not employed because they LACK AMBITION. It is NOT Government's responsibility, or anyone else's for that matter, to provide a person with a job.
If they lack the imagination to create sellable products or sell their own skills and services then that is the reason that they are not employable in the first place.
Since ypu assert that they have taken over the jobs...and argue this point quite well and argue against yourself...maybe those very computers and VIDEO GAMES, along with all of the smartphones and iCrap, have served to decrease the Standard of Living.
Did you even think about what you wrote?
Perhaps the distraction from the computer has served to exacerbate the decreases in the Standard of Living. Then you can add in the Television Programming and the astounding WASTE OF TIME that people have their eyes glued to that screen rather than thinking of how to go about productive activities...and you can see why America has become fat, lazy and unmotivated.
You wrote complete and total Liberal Minded HOGWASH.
The sad thing is that SIX PEOPLE here did not even think about what you wrote and agreed with it?
"Life was boring before computers."
Retired Guy, change your handle to Retarded Guy
"Life was boring before computers'???? I was in my Twenties from 1968 to 1978. I covered the Sixties and the Disco Era. Kids today are having about as much fun as a retarded quadraplegic.
the streets are empty of playing children
someone should put up a collage of a wasted life with their selfies
That's because they're not allowed to DO anything any more.
Yes some jobs are being filled by computers and robots but most of the Jobs in the last fifteen years went to China and India.
Ding Ding Ding!
The truth is it's a complex screwing from many angles, some self inflicted with a heaping helping of crony bought off politicians, a good measure of general ignorance and a whole heaping helping of I'll get mine screw the rest of you from all corners.
It is undeniably true though that if an enlightened person wanted to help you'd probably sooner or later end up ignored or worse.
@Duc888
I really like some of the craft beers made in the US that are coming over to the UK, seems like you guys are getting your act together and discovering taste.
I didn't realize sprott was such a left-minded group. Corporate welfare? are we talking about the gov giving money, or tax breaks? Nothing wrong with tax breaks. Taxes are usurious anyway.
The article says the big beer makers gouge prices, but then say they charge prices under market to cut out the competition. Which is it? The article says the big guys own approx two thirds of the beer market, then they say 70+%. I think they are fudging the stats. I find it hard to believe micro-brews haven't taken a HUGE chunk of the market away from the big guys. Even in my mid sized town there are three or four breweries. All stores have bigger "small brewery" sections then large. EVERY bar offers a bigger selection of micro brew than big corp brew.
Don't swet it. Let the big guys consolidate. It will only create more INEFFICIENCY for them. We don't need gov to save us or create more laws. The public will decide which beers are better; it already is deciding. The free market will win. REJOICE!
What we need in some states is an end to state ordained beer distributor oligopolies. For example, in PA, a smal handful of very powerful beer distributors with ties to Coors, InBev/AB, Miller, etc., dominate the rules and prohibit consumer access to product that competes, and mid and small cartel members don't want consumers to have the ability to not buy through their toll booth at convenience stores or grocers.
https://xkcd.com/1534/
Hmmm. Sprott??
Sorry, but the regulation IS the problem, not the lack of enforcement. The very first Trust Buster laws were written by the biggest cartel cronies of the age in an attempt to promote the first barriers and hurdles to entry against those in railroads, etc., so to enable the fat cats to better rest on their laurels without pesky wildcaters.
Today the deepest pockets write the regulations, using complexity (taxes, etc.) and prohibitions against consumer choice (ala tax cab cartels prohibiting Uber) and cosensual free labor movement (Big Labor mandating its control in partnership with big biz who like the locks on labor fluidity) . ETC.
And dont' get me started on the central banking cartel and its nexus with big government. They are one and the same, an intertwined political economy that loots from us all, thus causing the massive degredation in standard of living, employment opportunity, etc.
No. Computers are not stealing our jobs. So long as needs are unmet and igenuity exists, there is potential for jobs. Stop being luddite -- It's the looting of private capital by the elite that's the problem.
One last item: ALLAGASH TRIPLE!!!