Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Wednesday, January 13, 2021

Global giants and local stars: How changes in brand ownership affect competition

Global giants and local stars: How changes in brand ownership affect competition

By:

Vanessa Alviarez; Keith Head; Thierry Mayer

Abstract:

We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4-7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU.

URL:

http://d.repec.org/n?u=RePEc:cii:cepidt:2020-13&r=com

https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/global-giants-and-local-stars-how-changes-in-brand-ownership-affect-competition.html

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