A friend of mine sent me this link yesterday. I’m not usually on his distribution list, and I haven’t seen any replies yet so I decided to come here to talk about it before I copy and paste my article to send out to my friends. I believe the point of him sending the link was to start a conversation on the article, I don’t necessarily believe this article in any way represents my friend’s view on the subject. It’s five pages long so I suspect most of you won’t read it, but check it out and browse through it if you have a minute. In the interest of time, I won’t hit every point I’d like to, so feel free to add any comments.
The author, Tim Heffernan, is worried that a monopoly in the beer market in the US will eventually cause prices to lower and increase the amount of alcohol consumed, causing the US to have the same drinking problems as the UK. He points out that there are two main beer companies in the United States, Anheuser-Busch InBev and MillerCoors, that make up 80% of the market share. He doesn’t cite any sources in the article, but from a Google search this appears to be accurate. He says that Anheuser-Busch InBev will eventually merge with MillerCoors, and will not only have a monopoly on the product, but also the distribution. He says this is what has happened in the UK, and I’ll take him at his word. He says this manufacture and distribution monopoly, along with making beer more available at supermarkets, is the reason the UK has a drinking problem, and we in the US will too when this eventually happens.
The first problem with his argument is that it is a false dilemma. Just because the UK has a more drunks per capita than the US and has less regulation (according to his article) than the US, does not mean that less regulation is the cause of of the increased drinking. Sure it is a possibility, but there are so many other potential causes he does not look at including culture, social stigma, work hours, religion, health concerns, etc.
I, like many, used to binge drink often in my college days and I had a lot less money back then than I have now. I hardly ever drink alcohol nowadays, but the reason for me is that I need to be productive in the morning and a hangover often gets in the way of that. I am also somewhat health-conscience. I try to maintain my weight, and be physically active. While some people may be able to handle it, I think most people would agree that binge drinking is not conducive at all to an active lifestyle.
One of his main points is that when the beer market is monopolized, it will lower prices and cause more people to drink. He does not say how this happens. He doesn’t point to any other monopolies that lower prices. In fact, it is basic economics (and the reason we have pointless anti-trust laws) that monopoly power increases prices. Even if the monopoly is earned in a free market through efficiency, prices would still increase until others can enter the market, therefore bringing the market price back down to its equilibrium.
The facts also do not back up many of his claims in his article, so I’d be interested to hear from him where he got his data. A Swiss bank, UBS, did a study in 2012 that shows the USA has some of the cheapest beer, relative to income, in the world already, even cheaper than the UK by a long shot! A second source, mytravelcost.com, also backs up my claim saying that alcohol costs in the US are 44% cheaper than in the UK. The whole premise of his article, that monopoly will lower prices and cause our streets to be flooded with drunks, is totally baseless.
Lastly, it is my personal belief that we will see the exact opposite, of what Heffernan claims, happen in the coming years. Sure, there are two huge corporations owning a combined 80% of the beer market, but Heffernan totally ignores the “wrath of the consumer”. Consumer tastes in the US toward beer are drastically changing. Over the past decade we have seen a rise in the “beer snob”. You’re seeing more and more microbrews pop up all over the place. According to The Brewers Association, craft beers are growing by double digits each year. In fact, in 1978 there were 89 breweries in the United State. As of June of 2011 there were 2,126 breweries, the most ever in the US. The previous high was 2,011 way back in 1887. That number is trending up for the future as overall beer sales are down, but craft beer sales are rising.
My take is that this article is a poorly researched, misguided, anti-capitalist hit piece, by an author who has no clue what he is talking about at best, or an author who knows exactly what he is talking about but maliciously chose to do a temperance propaganda piece with a big corporate boogeyman to blame for alcoholism at worst. It is clear to me that the author is against big business and alcohol in general. He fears people having the freedom to make their own choices and does not think the general population can be trusted. He thinks everyone should live the way he does, because he is somehow smarter or better than the average man. Sure, he wouldn’t become a drunk with lower beer prices, but all you idiots out there will.
God Bless Freedom, Liberty, and Personal Property,
Slappy Jones II