Tuesday, February 12, 2013

After Finally Going After a Big Merger, U. S. Anti-Trust Action Goes After the Wrong One

Who Cares if Two Giant World Wide Beer Companies Merge?

For decades now the concept of the government enforcing the anti-trust laws had been DOA.  Under pressure from the business community and under a total lack of understanding that government needs to vigorously promote competition for a free enterprise economy to work, the Federal government has been absent in preventing mergers which reduce competition.

But suddenly the government has decided to oppose a merger on anti-trust grounds. 

The U.S. government sued to block the world's biggest beer maker from spending $20 billion to get even bigger, the latest deal to fall prey to global antitrust regulators.

The surprise lawsuit seeks to block Bud Light maker Anheuser-Busch InBev NV's deal with the Mexican company that owns the Corona brand, and comes just a day after concession talks with the government broke down.

U.S. authorities said they want to prevent any overcharging by the global giants that dominate mass-market brews.

This is stupid.  First of all beer is not a critical commodity and if the price rises, too bad.  In fact, higher prices may even benefit society, ie, less beer consumption.

But the real point here is that the beer industry is now highly competitive.  Micro breweries are everywhere.  Incredibly, the Feds have now used their anti-trust powers to go after a merger that is not anti-competitive in an industry that is highly competitive and will remain highly competitive even if the Busch merger does take place.

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