The U.S. Beer Industry: Concentration, Fragmentation, and a Nexus with Wine*

Kenneth Elzinga

Journal of Wine Economics, 2011, vol. 6, issue 2, 217-230

Abstract: The U.S. Beer industry has undergone two periods of major structural change in the post-World War II period. The first period, 1950–1980, was one of consolidation in which concentration increased dramatically. Since this period, combinations among leading brewers took place that would not have passed antitrust scrutiny earlier. The second period, from 1980 on, is one of fragmentation, marked by the entry of many craft brewers and increased product heterogeneity. The fragmentation has brought about consumption complementarities between wine and beer that never existed before. The wine and beer industry both face distributional inefficiencies sustained by state regulatory provisions that were a consequence of ending prohibition in the United States. Each of these topics is explored in this paper. (JEL Classification: L66, M37)

Date: 2011
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