Tonight, millions of people will enjoy a beer. What the vast majority of them probably won't realize is that the variety of brands they see in the stores come from just two foreign-based multinational companies that control 80 percent of the market here in the U.S.
While many of America's favorite beer brands appear unchanged over the years, behind the label, the beer industry has become a global affair, along with the rest of our food system. Now, one of the largest beer corporations, AB InBev--which owns Budweiser, the king of American beers, wants to buy Grupo Modelo--which owns Pacifica, Tsingtao, and Corona brands. The Department of Justice (DOJ), after allowing foreign companies to buy nearly all U.S. breweries in the past decade, finally took some action in January when it sued to block the Budweiser-Corona marriage.
But AB InBev seems intent on forging ahead with the deal, claiming it is working to address the DOJ's concerns. It is rearranging the trimmings of the proposed takeover (selling one factory and the Corona and Modelo brand rights in the U.S. to another company), but even these changes leave AB InBev in control of nearly everyone's beer cooler. The company would have a bigger stranglehold on what brands of beer are available and the power to raise prices unilaterally.
AB InBev, based in Belgium, and SABMiller, based in the U.K., are indeed beverage behemoths. AB InBev owns over 200 brands worldwide including Budweiser, Becks, Stella Artios, Boddingtons, Löwenbräu, Michelob, and St. Pauli Girl. SABMiller also owns over 200 brands distributed on six continents, including Coors Light, Fosters, Miller Light and Milwaukee’s Best. Meanwhile, the nearly 2,000 independent craft breweries comprise less than 6 percent of the market.
Why does it matter who owns our beer? According to a recent report by the New America Foundation, consolidation in the beer industry has led to higher prices and less consumer choice. After InBev purchased Anheuser-Busch in 2008, a long-running price war between Anheuser-Busch and MillerCoors ended, and both began to raise their prices simultaneously.
What's worse, consolidation is a problem that extends across the whole food system. When a few large companies own and control our meat, milk and processed foods, it's bad for consumers and bad for the farmers who bring us the food. The big players get to make all the decisions, from pricing to distribution, and consumers and producers have no choice but to go along for the ride. The markets cease being fair and the high concentration of companies that control a majority of our food has become a foodopoly--an alliance of agribusiness and big food companies that control everything we eat every step of the way, from seed to table.
Just how highly concentrated is our marketplace for food? Two out of three pork chops are sold by just four companies--Smithfield, Tyson, JBS and Excel. It's even worse for beef, with four companies processing 80 percent of all U.S. cattle. When markets are this concentrated, the big players make all the rules in the marketplace to the detriment of farmers and consumers. That's why a chicken farmer receives about 25 cents on every 12-piece KFC chicken bucket (the poultry company gets $3 to $5 and KFC pockets $14 to $16 at big city franchises).
When you look behind the multitude of brands in the supermarket and find just a handful of companies, it's easy to see why small farms have disappeared. Over decades of policy shaped by the largest food and agriculture corporations, these companies have managed to squeeze more and more from the livelihoods of farmers. The meatpackers and other food manufacturers pay farmers lower prices, and farmers are forced to turn their livestock operations into factory farms so that they can make ends meet. Consumers aren't the ones benefiting off of the low, low prices farmers get for their products--the middlemen do.
Who controls your beer might seem a frivolous question on the surface, but who controls our food supply is no laughing matter. The DOJ must work to prevent the expansion of the food monopolies to protect consumers. The beer market is no exception, and the DOJ should take a stand and block this merger.
Oct. 2, 2013 Update: The number of SABMIller beer brands has been changed to reflect SABMiller's A to Z brand listing as of fall 2013.
This post originally appeared at Food & Water Watch's blog.