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NY Times: Are Big Brewers Inviting an Antitrust Review?
FILED AUGUST 27, 2009

BreakingViews.com, via the New York Times, suggested yesterday that the Big Two brewers are "testing President Obama's tolerance" by "raising prices at the same time, during a recession and while beer demand is slumping. With 80 percent of the market between them, the move almost begs for an antitrust review."

Indeed, the media has been in a frenzy this week after the Wall Street Journal reported that ABI and MillerCoors are raising prices in the Fall on a part of their volume, even though they've raised prices every year in the Fall (and sometimes again in the Spring) for as long as I can remember, and this Fall's increase won't likely rise to the level of previous increases, as some price letters we've seen simply raise frontline pricing only to deal it back to previous promo levels. Plus, Crown and Heineken, for example, are likely sitting this price increase out.

Also, the news isn't exactly new. Back on August 4, BBD reported MillerCoors chief Leo Kiely as saying "the beer industry was slow on catching up with commodity pricing on the last three year cycle. Our point of view is that beer is a pretty good value right now....So we think there are some packages that will take an increase in the Fall.....on a market by market basis."

The fact is that beer pricing hasn't even come close to keeping up with cost of goods sold increases, and beer prices typically go up at or just below CPI. So, yes, there's going to be a nominal 4% price increase (MillerCoors' COGS was up 5% last quarter, and that was a vast improvement). So for the media to cry "antitrust" is something of a stretch. I think that rising costs, debt, and synergy targets are more of a driver of taking price than anything else.

Still, the Times notes that the "Obama administration is taking a tougher line on monopolistic behavior. Christine Varney, the head of the Justice Department's antitrust division, has even signaled a willingness to re-examine deals that were approved under the Bush administration" and "taking on Big Beer might be politically popular."

So we take it, from the Times, that it's politically popular to take on the few industries having some success in hard times? Has everybody taken a crazy pill?

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A Lot Going on And Nothing Happening

FILED MAY 29, 2015 Yesterday we caught up with IBG consolidation consultant Joe Thompson for a tune-up. Every now and then we like to check-in with folks in the industry who are out and about and talking to many folks. In fact, when I talked with Joe, he was in a car with Yuengling's Dave Casinelli. So we asked Joe about what he's hearing out there in beerland.
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BI Announces Chief Economist, Federal Affairs Director

FILED MAY 28, 2015 Late yesterday Beer Institute chief Jim McGreevy sent members notice that they'd soon announce both a new Chief Economist and a Federal Affairs Director. "Michael Uhrich will be our Chief Economist and we have added the new position of Director, Federal Affairs that will be filled by Joe Heaton," per memo.
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