Market structure and competition in the Italian brewing industry

The goal of this paper consists in the analysis of market structure and the degree of competition in the Italian brewing industry. Many works include the brewing industry in the broader food industry. These analyses obviously present aggregated results that turn out to be poor and not clear. In this paper we analyse the brewing industry separately, investigating its characteristics related to the process of competition, and thus showing how the brewing industry presents different features compared to other sectors included in the food industry. The degree of market concentration in the Italian brewing industry is high. This result requires considerations about the degree of market power and competition in the market. The first conclusion of the paper is that the degree of competition seems to be satisfactory due to the significant presence of many importers. With respect to this, then, import plays a disciplinating role in the competitive process of the market. In this industry, in Italy, the potential anticompetitive effects might be ascribed to other motivations. The recent dynamics in the brewing industry are crucial: distribution is becoming more and more strategic, and firms are more and more internationalized and compete in many markets. The first consideration shows that producers are vertically integrating in the distribution channels, thus leading to possible foreclosure and anticompetitive practices. The second consideration refers to the fact that multimarket contact stimulates collusive behaviours among firms. In conclusion, the paper draws some policy suggestions.