With the Biden Administration looking to fight consolidation in industries from meatpacking to shipping, a new report from the Treasury Department on Wednesday zeroed in on the $250 billion (annual) US alcohol market, outlining a series of reforms to boost competition, combat “exclusionary behavior ” by big companies and save consumers money.
The Treasury Department today warned about excess consolidation in the US beer, wine and spirits markets, which is dominated by two major conglomerates, Anheuser-Busch InBev and Molson Coors, together accounting for 65% of US beer revenues.
The detailed, 63-page Treasury document, first reported by Reuters, comes as part of the Biden Administration’s larger regulatory push to promote competitiveness across various US industries.
Though the report commended the thousands of new breweries, wineries and distilleries that have emerged over the past decade, the Treasury Department details the “challenges to the growth of small businesses and new entrants into the marketplace.”
US officials outlined a series of reforms—including stricter merger and acquisition scrutiny from the Department of Justice and Federal Trade Commission—to “better level the playing field” for small businesses and new market entrants, which tend to struggle against bigger companies with pricing power .
The Treasury Department also wants to implement different tax rates for producers and reform “outdated” state and federal regulations—some of which date back to the end of Prohibition in 1933—in order to allow new entrants to grow their business.
By fighting excess consolidation and implementing reforms that promote competition in the industry, which would also make the alcohol market cheaper for consumers, saving them up to hundreds of millions of dollars a year, according to the report.