On the beer-related side of this article, the author writes, "In 1988, Miller and Coors lowered prices on their flagship beers, which
led Anheuser-Busch to slash the price of Bud and its other brands in key
markets. At the time, August Busch III told Fortune, “We don’t want to
start a blood bath, but whatever the competition wants to do, we’ll do.”
Miller and Coors promptly abandoned their price cutting." This is not an illegal practice, however--and continues to this day.
What was more interesting to me is this: "It’s quite possible that the true monopolistic battles of the 21st
century will not be among massive corporations but among the
self-interested governments. We can only hope that they don’t engage in a
trigger strategy of their own." Because national governments legislate the anti-monopoly law their intra-national companies must abide by, what protects us against global monopolies? Other thoughts on the article?
The fear of self-interested governments using anti-trust law to benefit regional corporations, at least from this article, seems valid. I would hope that future trade agreements will take this concern under consideration, and some type of international anti-trust policy will be explored.
ReplyDeleteVery interesting point! If governments don't allow monopolies, than they should be caution about not breaking their own rules. If any of you have taken IOPP we discuss the great international beer monopoly that takes place. Though things may be moving smoothly in the beer industry today, beer companies need to be wary that their monopolies do not lead to a lack of motivation for efficiency. If firms, even monopolies fail to remain efficient, eventually a competitor will enter the market and provide a better product or service.
ReplyDeleteThe concern raised by the article is a valid and an interesting one. However, I don't see global monopoly being associated with the beer industry but I might be wrong. Beer consumption is largely based on local preferences and cheap price, so it would be very difficult for any foreign beer to monopolize their product in other country.
ReplyDeleteI would not be worried about a monopoly in the beer market because of all the small microbreweries around the country. These microbreweries are able to make a good quality type of beer that is specific to a season that brings in customers regularly. Just like Bells brewery in Kalamazoo.
ReplyDeleteI don't see as much of a "danger" as presented in the title in this article. I do find the competition in the beer market between these places ( US, Europe, Japan, China, India, etc.) interesting, since I'm used to hearing about other competition in, as the article states, retail, food manufacturing, banking and countless other industries. I am not worried about this megamerging. Like Rohitha said.
ReplyDeleteTo me, the beer market is good for now. Prices are in a reasonable range and the quality is good. It just would seem highly unlikely for a monopoly in the beer market. I agree with Rohitha that microbreweries are able to make quality beer and they charge a reasonable price.
ReplyDeleteRohitha I agree with your point about microbreweries and artisan beers being able to keep reasonable prices and attracting many customers. Chad Goodwill, our investments professor and regional sales manager at Imperial Beverage, talks about artisan beers and microbreweries and he claims that they are doing very well these days, especially in Michigan.
ReplyDeleteRight, that is the question. When we are talking big scale, there is really nothing stopping any country from breaking the rules. We have trade treaties yea, but really there is no enforceable punishment for breaking them. At the end of the day the only power a country has over another is the threat of violence. If your country carries the biggest stick, no one wants to go to war against you. You can do what you want at the end of the day.
ReplyDeleteLike everyone else said, the fact that we have these small microbreweries around is definitely a big help in not allowing one beer company to take over. I think people like being loyal and supportive to their local breweries in their hometowns and I don't think this will change anytime soon.
ReplyDelete