Biden Administration Asks Agencies to Reduce Competition Barriers in the Beer Industry

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On Thursday, July 9, 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy. The executive order directs several federal agencies to study or take actions designed to promote fair and open competition in a variety of industries. While the mainstream media has mostly focused on the order’s suggestions for restricting non-compete agreements, providing more competition in the rail and maritime freight industries, and restoring the “net neutrality” rule repealed by the last Administration, it also specifically addresses competition in the alcohol beverage market.

The Brewers Association applauds President Biden for recognizing the need to promote a fair, open, and competitive marketplace in the sale and distribution of beer. Over the past three decades the American beer consumer has embraced a diverse beer market filled with the unique, quirky beers produced by over 8,500 small, independent breweries. Longstanding federal and state policies helped fuel that success by, for example, prohibiting large brewers or wholesalers from dominating retail channels through “slotting fee” payments and similar practices.

But substantial consolidation within all three tiers of the industry makes it increasingly difficult for small, independent brewers to succeed in traditional distribution channels and in big chain retail. Moreover, investigations by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) repeatedly uncover practices by large industry members that unlawfully exclude small producers from key retail outlets. To date, these investigations and the settlements flowing from them do not appear to have substantially curbed such illegal and exclusionary behavior.

The Brewers Association also appreciates the president’s recognition that in some cases, regulations create their own barriers to entry by focusing on outdated concerns, failing to leverage modern technology, or demanding unduly burdensome processes and procedures.

We stand ready to work with the Department of the Treasury, the Department of Justice, and the Federal Trade Commission to create a more competitive and fairer environment for all brewers.