Branding and Consolidation in the Global Beer Market

The liberalization of trade turned on a wave of cross-border M&A after the turn of the century that dramatically increased the concentration of ownership in the global beer market, where the four largest breweries now serve close to 60 percent of the market. The chapter looks at the motivation behind these changes in corporate ownership and the pay-off to the breweries and their owners. The breweries spend a large amount of money promoting some of their lager beer as premium beer, and as consumers perceive it as high-quality beer, they are willing to pay a high price premium for the branded beer. We estimate the price premium for branded beer and relate it to the rapid change in the ownership structure in the beer market.