UBC - University of British Columbia (Vancouver Campus, , 2329 West Mall, Vancouver, BC, V6T 1Z4 /
Okanagan Campus, 3333 University Way, Kelowna, BC, V1V 1V7 - Canada)
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.