Friday, August 26, 2016

Give AB InBev the finger and read this article about antitrust and the importance of supply chains.


Beer is not mentioned in this article, but if you're reading it while drinking a Goose Island product, you're probably better off heading back to Thrillist.


What Role for Antitrust in the Era of Rising Inequality? The Importance of Power in Supply Chains, by Marshall Steinbaum (Pro-Market)

Concentration of power in supply chains is a prime mechanism by which dominant companies consolidate power and profits.

The Sherman Antitrust Act of 1890 was passed almost unanimously and with one goal in mind: to keep the cartels that dominated the nation’s railroad network from shaking down yeoman farmers. If they wanted to sell their goods, farmers had to pay the railroads’ exorbitant prices for freight, and any time demand increased, the railroads increased their prices and so captured the entire windfall. The Sherman Act, along with later U.S. antitrust legislation, aimed to diffuse market power in supply chains. The premise of the act was that individual small-scale producers should be allowed to make a living without paying powerful gatekeepers for the privilege.

For the most part, that has not been the standard applied by regulators and courts in enforcing antitrust law over the last four decades. Instead, they have looked almost exclusively at consumer welfare rather than the relative power of different suppliers to set prices and other trading terms. And policymakers and experts have tended to assume that large suppliers serve consumers’ interest by competing out inefficient producers—meaning that concentrating power in supply chains is, at least most of the time, beneficial to the public. That intellectual trend is reflected in the prioritization of different types of cases by the antitrust enforcement agencies, and also in the judiciary with the Supreme Court’s move to consider vertical price-fixing cases under the Rule of Reason following the 2007 Leegin case.

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2 comments:

George Harrison said...

Very enlightening. Clearly written just the way I like... with words of as few syllables as possible...😉 we don't see discussion of this issue very often. Merci beaucoup! Tres bien!😃

George Harrison said...

Very enlightening. Clearly written just the way I like... with words of as few syllables as possible...😉 we don't see discussion of this issue very often. Merci beaucoup! Tres bien!😃