Modelo Justice


Amidst the hoopla of the triumphant release of Budweiser Black Crown, the King of Beers learned that its $20.1 billion offer to purchase Grupo Modelo — maker of Corona, that beer people put lemons in — had been given the kibosh by the good folks at the Department of Justice.

One of the key DoJ players in the blockages is our own LU alum William Baer, who had this to say:    

This is the sort of product that matters to consumers. If you have a very slight price increase that happens because of this deal, it could mean that consumers will pay billions of dollars more.

Now, reaching for the back of my envelope, the average American guzzles down about 30 gallons of beer per year, about a half gallon per week.  Now, if the price per gallon goes up $0.10, that would entail about $3 per person per year times 300 million people, or about a billion dollars (assuming the demand for beer is pretty inelastic, of course).

On the down side of all this consumer largess, young folks will probably be saddled with more STDs!

Thanks you to the formerly bearded “Mr. T” for the tip.  Those of you in the 400 class should take a look.  Very interesting stuff.