The US Treasury Department has raised concerns about consolidation in the US alcohol market and outlined reforms to boost competition and help new entrants to the market.
The big brewers and distillers control a large chunk of the US alcohol market, which is worth US$250bn a year.
Anheuser Busch InBev and Molson Coors account for 65% of US beer revenues, while Britain's Diageo PLC (LSE:DGE), the world's biggest spirits maker with brands like Johnny Walker whisky and Smirnoff vodka, recorded sales of £3.26bn in North America in the six months to 31 December 2021.
The US Treasury believes new merger and acquisition scrutiny, different tax rates and lifting regulatory burdens to new entrants in the wine, beer and spirits market would make the market fairer for new brewers and cheaper for consumers, according to a Treasury report seen by Reuters.
The Treasury report, due to be released later Wednesday, follows a July executive order on competitiveness as the Biden administration starts to tackle what it deems to be excess consolidation in a number of industries.
The US market for beer, wine and spirits has spawned thousands of new breweries, wineries and distilleries over the past decade, but complicated rules and "exclusionary behavior" by massive producers, distributors and retailers means small entrants can struggle to compete and flourish, US officials told Reuters.
"We're determined to protect what has been a successful, vibrant industry with a lot of small businesses entering it," while tackling issues that "lead to excessive prices for consumers", said one senior US official.
So-called "post and hold" laws, which restrict price competition, mean beer consumers alone pay US$487mln a year more than they should, and can push up the cost of a bottle of wine by as much as 18% and a bottle of spirits by over 30% the report said.
The Department of Justice (DOJ) and Federal Trade Commission (FTC), who are responsible for antitrust enforcement, should take a closer look at proposed acquisitions of smaller players by bigger ones, given past claims that such deals would lower prices had failed to materialise, the Treasury report said.