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From Local to Global Competitors on the Beer Market

Author

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  • Erik Strøjer Madsen

    (Department of Economics and Business Economics, Aarhus University)

Abstract

Liberalization of trade has been high on the political agenda after the Second World War. First through the international corporation in GATT and WTO and later the creation of the internal market in Western Europe and the opening up of Eastern Europe and China. The breweries respond to these changes in institution by a global M&A strategy and the following concentration of ownership among breweries increased the large breweries’ global market share dramatically. Why does this concentration in ownership take place, and was there some pay off to the breweries of this strategy? We will examine the market power hypothesis, how the increasing concentration has affected the growth of global brands and the beer prices. First, we examine where the increasing global concentration is reflected in a concentration of ownership in local markets. Next, we examine the effects of ownership concentration on the level of beer prices. Finally, we examine the effects of the global ownership on the market share of the global beer brand.

Suggested Citation

  • Erik Strøjer Madsen, 2019. "From Local to Global Competitors on the Beer Market," Economics Working Papers 2019-11, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2019-11
    as

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    File URL: https://repec.econ.au.dk/repec/afn/wp/19/wp19_11.pdf
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    References listed on IDEAS

    as
    1. Madsen, Erik S. & Pedersen, Kurt & Lund-Thomsen, Lars, 2012. "Effects of the M&A Wave in the Global Brewing Industry 2000-2010," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61(4).
    2. William James Adams, 2006. "Markets: Beer in Germany and the United States," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 189-205, Winter.
    3. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
    4. Madsen, Erik S. & Pedersen, Kurt & Lund-Thomsen, Lars, 2012. "Effects of the M&A Wave in the Global Brewing Industry 2000-2010," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 61(04), pages 1-9, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Branding; Brewing industry; Global market power;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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