Topic > Economic Concepts in the Beer Industry - 1090

There are more than 2000 brewers, but three control 78% of the beer market. Anheuser-Busch controls about 45%, Miller Brewing maintains a 23% stake, and Adolph Coors controls 10%. Anheuser-Busch's twelve breweries produce more than sixty varieties of beers across multiple families with operations worldwide and distribution in more than 60 countries. Some of these families are Budweiser, Michelob, Busch, Natural, Bicardi and Grolsch. Miller Brewing produces more than 130 million barrels of beer per year and operates in 40 countries under hundreds of brands. In July 2002, South African Breweries purchased Miller Brewing Company, forming one of the largest brewers in the world, called SABMiller plc. Brands range from Miller, Milwaukee's Best, Leinenkugel's, Peroni, Sparks and Fosters. Adolph Coors produced 42.1 million barrels in 2006 through 12 breweries and more than 40 brands distributed in more than 30 countries. Brands include Coors Light, Milson Canadian, Coors, Killian's Irish Red, Keystone, Blue Moon and Zima. Beer is distributed through a system called the "three-tier" distribution system. The three-tier system was established by the 21st Amendment to the Constitution and by the state and federal governments following the repeal of Prohibition as a means of checks and balances at each tier. The first level consists of brewers and importers, followed by wholesalers and finally retailers. Brewers and importers produce the beer and, in the case of importers, import it into the country, then sell it to wholesalers who then sell it and ship it to retailers. In addition to producing beer, brewers are also responsible for providing market support and assistance to wholesalers, providing point-of-purchase materials, ensuring a consistent supply of product, maintaining consistent product quality, and notifying the wholesaler of changes in the product , company ownership, changes in marketing strategy and provide adequate lead times for the introduction of new items or product design changes. Beer wholesalers occupy the middle tier of the three-tier system. The 21st Amendment established the need for a middle tier for a number of reasons. First, retailers are now protected from the control previously used by suppliers or brewers. Secondly, encourage consumption in moderation. Third, the process allows for more controlled and accurate collection of state and federal taxes. Finally, it allows individual states to regulate licensed beverages to reflect their own practices and beliefs.