Advertising and Concentration in The Brewing Industry

Erik Madsen, Yanqing Wu

Article

The paper tracks the development in industry concentrations from 2002 to 2012, discusses some of the main drivers behind this development and points to economies of scale in advertising as a main pay-off from mergers and acquisitions. Using firm-level data both from the American market and the world market, the estimations verify significant economies of scale in marketing and distribution costs. Based on information from the annual reports of the eight largest breweries, the estimation proved a reduction in these costs of 10% when doubling the size of the brewing groups.

Keywords

Round Building

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