Competition Policy towards Brewing: Rational Response to Market Power or Unwarranted Interference in Efficient Markets?1
This chapter looks at general issues that competition authorities must face when designing a rational competition policy for any industry, and examines specific issues that arise when that industry is beer brewing. Both horizontal (i.e., firms in the same product market) and vertical (i.e., firms in a buying and selling chain) are considered, and the efficiency and market-power motives for common horizontal and vertical practices are assessed. These general issues are illustrated with two case studies, both from the UK beer industry. The horizontal case involves mergers among large brewers, whereas the vertical case involves the use of exclusive-dealing clauses and two-part tariffs in contracts between brewers and retailers.
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