It’s been a rough run for the U.S. economy in recent years.
One of the few bright spots is the price of beer. The U.S. has the most affordable beer on the planet.
Americans can point with pride to a study published in The Economist Online.
Based on median hourly wages and average beer prices, it takes just five minutes of an American worker’s time to earn a cold one. Prices are lower in plenty of countries, but their wages are even more so. The average across 150 countries is 20 minutes of work to pay for a beer, and in some parts of Asia it can be close to an hour.
But there’s a threat to the American way of life.
Last week the Obama administration filed a lawsuit in Washington’s district court to block a proposed beer industry merger. Anheuser-Busch InBev wants to take over Grupo Modelo of Mexico (Corona beer), which would leave the country with just two companies (the second being MillerCoors) controlling more than 70% of the U.S. beer business. The Justice Department has made a pretty compelling case against it, arguing that the marriage of Budweiser and Corona’s parent companies would eliminate competition between the rivals and lead to higher beer prices for Americans.
The brewing industry has already been consolidating like crazy for years. The number of major brewers in the U.S. fell from 48 in 1980 to just two after a mega-merger in 2008. Global Beer: The Road to Monopoly, a study from the American Antitrust Institute, shows how beer price increases started to accelerate immediately after 2008, with Anheuser-Busch leading the charge. Anheuser-Busch has kept prices high for decades by threatening a price war against any American brewer that breaks ranks and lowers prices, and the memory of retail bloodbaths in the 1980’s has kept them all in line. Grupo Modelo has been able to grab a lot of U.S. market share for its flagship Corona brand by keeping its prices stable. If Busch goes through with the purchase of Modelo that competition disappears, and the Justice Department predicts higher prices for everyone.
Never overpay again.
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