Review of Industrial Organization (2005) 26:243 © Springer 2005 DOI 10.1007/s11151-004-8110-0 VICTOR J. TREMBLAY Department of Economics, Oregon State University The U.S. brewing industry provides dramatic examples of many of the important issues in industrial organization. With only three major produc- ers, considerable non-price rivalry, and growing foreign competition, the industry today exhibits features typical of many consumer goods indus- tries. Thus, a case study of brewing provides insights that may generalize to other industries. Also of interest is the continued structural change in brew- ing. Since Prohibition, industry concentration has risen dramatically and the leading brewers have transformed from regional, single product pro- ducers to international corporations that invest heavily in advertising and market a variety of beer styles and brands. At the same time as the rapid growth of the industry leaders, thousands of small microbreweries have entered local markets since the late 1970s. These changes have raised pol- icy concerns about market power, mergers and acquisitions, and the social desirability of alcohol advertising. To shed light on these concerns, the articles in this series examine indus- try concentration, marketing activity, and antimerger enforcement in the U.S. brewing industry. Kenneth Elzinga and Anthony Swisher explain how early antimerger litigation helped establish important legal precedents, and use later merger activity in brewing to illustrate the evolution of antimerger enforcement as reﬂected in the horizontal Merger Guidelines. Jon Nelson discusses recent marketing activity in brewing, focusing on the impact of advertising and product differentiation on industry structure, market demand, and social welfare. Finally, Natsuko Iwasaki, Carol Tremblay and I summarize recent changes in industry concentration for the micro and macro sectors of the industry and discuss plausible explanations for these changes in concentration. I wish to thank Kenneth Elzinga, Natsuko Iwasaki, John Kwoka, Jon Nelson, Anthony Swisher, Carol Tremblay, and Lawrence White for their suggestions and contributions to the series.
Review of Industrial Organization – Springer Journals
Published: Dec 23, 2004
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