Under the Foam
A single-minded lobby of beer wholesalers seems to have persuaded Congress that the vigor of the American republic and the health of the American people depend on perpetuating beer-distribution monopolies. It is an unattractive case of a special interest seeming to prevail without regard to the public interest.
The Reagan Administration has not been as susceptible to the blandishments of the beer distributors as have members of Congress, and that is fortunate, for a presidential veto may turn out to be the only way to stop this dangerous adventure.
At stake is an innocuous-looking piece of legislation, the Malt Beverage Interbrand Competition Act (S 412), being touted by its sponsors as a measure to protect consumers and small-business people. In fact, it serves only the established beer wholesalers by making it more difficult to bring antitrust action against the territorial monopolies that they have established in 27 states and are pushing in all others, California included. The sham of the sponsors is exposed by the opposition, which includes most of the consumer and small-business groups represented in Washington.
The heart of the dispute is whether open competition among wholesalers should be tolerated. The National Beer Wholesalers’ Assn. wants that competition to be limited to wholesalers who have brand monopolies in a given market--Coors vs. Bud, for example--which concentrates enormous power to maintain relatively high prices in the hands of the handful with distribution monopolies for the leading brands. Opponents want an expansion of the competition that comes from the so-called transshippers--wholesalers who offer real price competition, including Bud vs. Bud. There are studies that indicate significant price reductions when that sort of competition exists.
The Justice Department, in opposing the legislation, has noted the risk of this breach of antitrust legislation. If it’s beer today, what next?
A move to establish beer-distribution monopolies in California has been stalled in the Assembly Ways and Means Committee--a fate that it deserves. Much of the momentum was lost when Gov. George Deukmejian kept his commitment to a free and competitive economy and wisely vetoed similar legislation for wine importers last year. But the beer wholesalers are applying enormous pressure on legislators.
At the national level, their political-action committee, originally called the SIX-PAC but now called the National Beer Wholesalers Political Action Committee, has already raised about $200,000 for this year’s congressional elections--a threefold increase in the funding raised before the 1984 elections. With bipartisan support led by Sens. Barry Goldwater (R) and Dennis DeConcini (D) of Arizona, they are expected to carry the Senate. But they have found a more stringent defender of anti-monopoly laws in the House in the form of Rep. Peter W. Rodino Jr. (D-N.J.), chairman of the Judiciary Committee, who has thus far resisted rushing the legislation to a vote--a judicious exercise of his authority.
