The Brewing Industry: A Case of Concentration in America and England

Abstract

The brewing industry has been an important part of economic activity for hundreds of years. The industry has, in recent times become a concentrated industry. This phenonomenon emerged in the US and in England after World War ll. Reasons for the emergence of a few large brewers that control the majority of the market vary from the US to England. In the US, many breweries were forced to close because of prohibition and only the most prosperous could reopen their doors when it was repealed. This, in combination with the two world wars and improvements in technology created a highly concentrated industry. In England, the reasons for concentration have more to do with the world wars and technology than prohibition. The two world wars devastated England and the brewing industries there. The infrastructure and many of the laws passed during this time were helpful to the major breweries, which led to concentration there as well. The emergence of the craft brewing segment as a competitor in the market has started to slowly change the industry. In the US, micro and craft breweries came onto the scene in the 1970's, but they have existed in one form or another in England since brewing began there. This history has helped the English industry to survive and compete with the larger players in the industry. The two industries are not equally concentrated, but have both been plagued by this problem. The small breweries have different ways of promoting their product and try to appeal to different markets. Generally, in England they can use an appeal to cultural heritage, whereas in America they appeal to a specific segment of the drinking population.