Is Anheuser-Busch a monopoly Essay Example | Topics and Well Written Essays - 2500 words

Is Anheuser-Busch a monopoly - Essay Example It, however, is not the only corporation that is doing so, as the beer industry has become an oligopoly where â€Å"a few large firms producing a homogeneous or differentiated product dominate a market† and â€Å"firms in the industry that firms are mutually interdependent—each must consider its rivals’ reactions in response to its decisions about prices, output, and advertising† (Monopolistic Competition and Oligopoly). This has created a beer market where the smaller brewers do not really have a chance for success, since the larger companies will make it nearly impossible for them to survive. These large corporations have altered the free market to the point where it is not really free anymore and the consumer’s choices are very limited. Anheuser-Busch does not dominate the beer industry, but it is one of the members of this oligopoly that has taken control of this industry globally. It cannot be said that Anheuser-Busch dominates the market because of its low prices because other breweries do the exact same thing. Anheuser-Busch was, until recently, the world’s largest brewery, by volume, but it has since fallen back a little bit because of its reluctant to acquire other breweries. Despite this, Anheuser-Busch has managed to take a 49% market shape in the United States based almost purely on its major brands: Budweiser, Michelob, and Busch. Each of these beers is basically the same recipe, with minor variations and different names, which is what most beer companies do with their beers. Despite all of this, there have been problems growing for the company in terms of revenue and net profits, as both of these have declined in recent times. The net income for the company is down 31% from last year and the company also went from having %50 of the market share down to only having 49%. One reason for this drop in profits is that beer consumption as a whole has decreased in the United States recently. People are now beginning to