Review of Industrial Organization (2005) 26:245–267 © Springer 2005
The Supreme Court and Beer Mergers: From
Pabst/Blatz to the DOJ–FTC Merger Guidelines
KENNETH G. ELZINGA
and ANTHONY W. SWISHER
Department of Economics, University of Virginia, Charlottesville, VA 22903, USA;
Gump Strauss Hauer & Feld LLP, 1333 New Hampshire Avenue, N.W., Washington, DC
Abstract. The beer industry in the U.S. has undergone signiﬁcant structural change in the
post-WWII period. The industry also was the object of prominent antitrust challenges to
horizontal mergers proposed during this time frame. This paper documents the trend of
increasing seller concentration in the brewing industry and assesses the role that mergers
played in this structural transformation. We also analyze the change in merger policy that
has taken place since the Supreme Court originally addressed mergers in the beer indus-
try as compared to current antitrust enforcement under the DOJ–FTC Merger Guidelines
and recent judicial decisions.
Key words: Antitrust, beer, mergers, Supreme Court.
In Robert H. Bork’s treatise on antitrust policy, he wrote:
Though the goal of the antitrust statutes as they now stand should be
constant, the economic rules that implement that goal should not. It
has been understood from the beginning that the rules will and should
alter as economic understanding progresses.
The beer industry in the USA illustrates how the antimerger “rules” have
altered “as economic understanding progresses.” Few, if any, American
industries have undergone such a remarkable structural shakeup in the
post-World War II period. During this time frame, many mergers and
acquisitions were consummated and, in the process of its structural trans-
formation, the beer industry was the subject of several prominent anti-
trust decisions, including two Supreme Court opinions that interpreted the
new antimerger law, the 1950 Celler-Kefauver amendment to Section 7 of
Author for correspondence: E-mail: firstname.lastname@example.org
Bork (1993), at 430.