Did the MillerCoors Joint Venture Strengthen the Craft Beer Revolution?

Abstract

We study how the MillerCoors joint venture affected craft brewers in the United States. We use scanner data to track the entry, assortment, and market share of artisanal and commercial brewers over a 4-year period after the merger. Using an instrumental variables strategy that uses only variation in concentration generated by the merger, we find that, in the average market, the merger led to an 11.59% increase in the number of craft brewers. The number of products per craft brewer did not increase. Most of the new entrants were small, and thus the market share of craft brewers experienced only a small (though statistically significant) increase. This entry of new firms may have been facilitated by the increase in prices by incumbent commercial producers following the merger.

Keywords: mergers, product policies, competitive strategies

JEL Classification: G34, L11, L13, L20, L66