Tacit Collusion

A brewer the size of the New Belgium is less likely to engage in tacit collusion by the nature of their business.  Additionally, craft brewers are fiercely independent as most began as one or two individuals following a dream.  New Belgium is no different. That is not to say that tacit collusion does not affect New Belgium and other craft brewers. As the Washington Post pointed out in their 2015 article, “The price increases that we estimate exceed the predictions of a standard economic model, accounting for changes in demand and cost conditions. This is consistent with tacit collusion between ABI and MillerCoors that emerges after the consummation of the MillerCoors joint venture,” Miller and Weinberg wrote in response to questions.” The two biggest brewers in the country are merging and there appears to be tacit collusion between their products.  While New Belgium is independent and has made every attempt to stay that way with their 100% employee-owned move, their beer is sold through similar distribution channels as ABI and SABMiller products.  Collusion between the big boys will definitely have effects on smaller players like New Belgium. As I pointed out last week, the rosy market for craft beers is finally feeling the squeeze, with Stone laying off employees.