In the middle of October, after months of courtship, Anheuser-Busch InBev and SABMiller struck a $104.2 billion deal to merge. The global beer conglomerates behind Budweiser, Miller, and a stable of other beer brands will, if approved by regulators, become a single company with control over nearly 70 percent of the U.S. beer market, and 30 percent of the market across the globe.
Two weeks later, Walgreens and Rite Aid announced an agreement to combine into the country’s largest pharmacy company, on the heels of rival giant CVS buying Target’s pharmacies in June. Meanwhile, Staples is moving ahead with its $6.3 billion acquisition of Office Depot (which itself acquired OfficeMax in 2013), Bass Pro Shops is exploring a bid for the hunting and fishing chain Cabela’s, and last week, in a transaction that will create the country’s largest hotel chain, Marriott announced its acquisition of Starwood Hotels.
Even as craft breweries, farmers markets, and other small-scale, locally owned enterprises experience renewed vitality, at the other side of the economic spectrum, there’s more consolidation than ever. Mergers and acquisitions are expected to hit a record $4.58 trillion this year, the American Prospect recently reported. And nearly a third of industries qualify as “highly concentrated” under current federal antitrust standards, found a recent Wall Street Journal analysis, up from about a quarter of industries a decade ago.
Much of this concentration is invisible to consumers. When AB InBev bought Chicago’s Goose Island Brewery for $38 million, for instance, it kept the well-loved craft brewer’s recipes and label, a pattern that it’s continued with its other craft acquisitions. Bar patrons still see a variety of beers on tap, and might not realize that their dollars now flow to AB InBev when they choose any number of them. Or take milk. Grocery shoppers choosing between 31 milk brands around the country rarely know that they’re all owned by one milk processor, Dean Foods, which controls 36 percent of the U.S. market for milk. Continue reading