Has The FTC Gone Powerdrunk? Big Booze Might Not Like This
If it's from a big name or some dude named Steven, IPAs all taste the same to me.
Once we got into the swing of the pandemic, it seemed like there were three hobbies that stole the lion’s share of what people decided to do when they had way too much time on their hands. Making sourdough bread, getting really into Peloton, and podcasts. There were others, definitely, and one of them was boozing it up. And I don’t just mean one too many one too manys — people started actually brewing their own beers and spirits (notice that both of these vids are from about two years ago?).
Which is why it is a surprise to find that the FTC may be setting its sights on the alcohol market for trust bustin’. With everyone and their cousin bootlegging their own brew, one wonders if there is really a need to encourage competition in a clearly agonistic field. Turns out, one target could be bottlenecking:
To the extent craft alcohol makers face market access issues, however, it’s most often because of competition issues at the wholesaling tier of alcohol, not because of large brewers buying smaller ones. That’s because nearly every state in America has a three-tier system for alcohol, requiring alcohol producers, wholesalers, and retailers to all be legally separate entities. Alcohol producers are largely barred from selling their products directly to retailers or consumers, forcing them to go through wholesalers.
These state laws insulate alcohol wholesalers from competition by giving them a government-mandated middleman role in the supply chain.
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This is just speculative at this point, though. Other FTC targets could be big companies taking up market share by mass acquiring microbreweries or other sneaky-t0-be-discovered anticompetitive behavior. While I’m all for consumers having more options and I understand that Biden recently committed to increased antitrust action, I’m still hit with that feeling of why here, why now. I get why consolidating airlines perk ears. But alcohol seems to be in a bit of renaissance period right now. Microbreweries, despite their size, have been holding their own against goliaths like Anheuser-Busch. Trust busting in a growing field may start precedent that puts other growing markets in an uneasy position. Either way, I doubt most consumers will complain if it means cheaper pints once they get off work.
Biden’s Antitrust Crusade Targets Alcohol [Reason]
Chris Williams became a social media manager and assistant editor for Above the Law in June 2021. Prior to joining the staff, he moonlighted as a minor Memelord™ in the Facebook group Law School Memes for Edgy T14s. He endured Missouri long enough to graduate from Washington University in St. Louis School of Law. He is a former boatbuilder who cannot swim, a published author on critical race theory, philosophy, and humor, and has a love for cycling that occasionally annoys his peers. You can reach him by email at cwilliams@abovethelaw.com and by tweet at @WritesForRent.