Efficiencies Brewed: Pricing and Consolidation in the US Beer Industry

Orley Ashenfelter, Daniel Hosken and Matthew Weinberg
Additional contact information
Daniel Hosken: Federal Trade Commission
Matthew Weinberg: Drexel University

Working Papers from Princeton University. Economics Department.

Abstract: Merger efficiencies provide the primary justification for why mergers of competitors may benefit consumers. Surprisingly, there is little evidence that efficiencies can offset incentives to raise prices following mergers. We estimate the effects of increased concentration and efficiencies on pricing by using panel scanner data and geographic variation in how the merger of Miller and Coors breweries was expected to increase concentration and reduce costs. All else equal, the average predicted increase in concentration lead to price increases of two percent, but at the mean this was offset by a nearly equal and opposite efficiency effect.

Keywords: Food; Beverages; Cosmetics; Tobacco; Wine and Spirits (L66); U.S.; Northern America; Beer; Concentration; Cost; Merger; Prices; Pricing (search for similar items in EconPapers)
JEL-codes: K21 L1 L4 (search for similar items in EconPapers)
Date: 2013-11
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https://www.nber.org/system/files/working_papers/w19353/w19353.pdf

Related works:
Journal Article: Efficiencies brewed: pricing and consolidation in the US beer industry (2015)
Working Paper: Efficiencies Brewed: Pricing and Consolidation in the U.S. Beer Industry (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2013-1

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