U.S. Alcohol Market Blocks Monopolies, Encourages Competition

Nov 09, 2021
The Michigan Beer & Wine Wholesalers Association responds to a recent column in The Hill.

Contrary to a recent column, the alcohol market is one of — if not the most — competitive markets in the country. There are over 8,000 brewers and more than 11,000 wineries operating in the United States and competing every day to gain shelf space, cooler space and tap handles.


Communities across the country benefit from the economic development brought by the alcohol beverage market. Jobs, tax revenues and tourist attractions are just some of the highlights provided by a system that has fostered competition, resulting in unparalleled choice for consumers.


All it takes is a walk down any grocery store aisle in America to appreciate the vast array of choices we have in the beer or wine aisle, which are dotted with offerings from hyper-local breweries and wineries next to those from halfway across the country and halfway around the world.


The same can’t be said for pop or chips. Sure, their aisles are full too, but in reality a small handful of companies manufacture all of those products and squeeze out the little guy.


Some want to ignore the success of the alcohol beverage market while criticizing lawmakers for supporting a system that prevents large multi-national alcohol manufacturers from engaging in monopolistic and anti-trust behavior that locks out competition, lessens choice and harms consumers.


Policymakers are aware of the dangers of a vertically integrated market where alcohol manufacturers own or control distribution and retail outlets.  We saw it before prohibition, today in Europe and in other industries where retail outlets are coerced or forced to carry limited selections primarily produced by the largest and most economically powerful companies.


In fact, last year Dutch brewer Heineken tried to force bars in the United Kingdom to exclusively sell its beers.


The bars involved in the year-long Heineken investigation wanted to break their exclusive tie with the brewer and offer other beers. Heineken’s pub arm, Star Pubs and Bars, instead doubled down, according to reports, and told those pubs 100% of the keg beer they sold had to be Heineken brands. These kinds of tactics went on for years.


The brewer was eventually fined $2.6 million for pushing bars to sell ‘unreasonable’ amounts of its beers. Heineken’s strong-armed tactics reinforces the importance of the three-tier system of alcohol distribution across the United States, which ensures what Heineken did in the UK will never happen in America.


Beer and wine distributors are proud to educate lawmakers on these dangers, to stand against anti-competitive behaviors and to build brands for all alcoholic beverage suppliers, big and small — local and global.


Lawmakers who support this system don’t fall for ideological arguments, they know facts from rhetoric and recognize a competitive market. The public benefits of this system are obvious: Choice, competition, public safety, economic development, jobs and more.