The US Treasury Department released today a much-anticipated report on competition in the alcohol beverage industry.
The report follows the Biden Administration’s July executive order on “Promoting Competition in the American Economy.” Following much input from industry members and trade associations, the “Competition in the Markets for Beer, Wine and Spirts” report from the Treasury Dept. covers industry concerns such as franchise laws, consolidation in the manufacturing, retail and distribution channels and direct-to-consumer laws among many other industry practices issues that affect competition.
The Brewers Association seemed pleased with the results of the report. “The Brewers Association thanks the White House, Treasury Department, the Department of Justice, and the Federal Trade Commission for their work on this report; and we appreciate the recognition that despite growing numbers of craft brewers, beer remains a heavily concentrated industry, which poses competition challenges to craft brewers and consumers,” said BA CEO Bob Pease in a statement issued today. “We applaud the Treasury Department’s recommendations on how to improve competition in the beverage alcohol industry, many of which align with the Brewers Association’s submitted comments. Upon an initial review of the Treasury’s Competition in the Markets for Beer, Wine, and Spirits, we are glad to see that the report recognizes that some laws, even those originally designed for a pro-competitive purpose, have inhibited the growth and competitiveness of craft producers.”
The reaction from the Beer Institute, which represents large brewers in the country, was quite different. “We are disappointed by the Administration’s mischaracterization of the thriving American beer industry,” said Beer Institute President and CEO Jim McGreevy. “The American beer industry is one of the most vibrant industries in the country. Since 2010, we have seen more than 10,000 new breweries permitted, and today–from agriculture and manufacturing to construction and transportation, the beer industry supports more than two million American jobs and contributes more than $331 billion to the nation’s economy. Consumers are benefiting from the growing number of brewers and beer importers.“
Mainstream media quickly picked up on the release of the report with blaring headlines such as ‘Treasury wants to reform U.S. alcohol market to help smaller players’ from CNBC and ‘Treasury wants to stir up U.S. alcohol market to help smaller players,’ from Reuters.
If you are keeping score, today was a check in the “win” column for craft brewers in the ongoing effort to tilt the competitive and highly regulated alcohol beverage market in favor of small manufacturers.
You can see the full “Competition in the Markets for Beer, Wine and Spirts” report here.