Cheap Beer Under Threat: Distributor Merger To Push Up Bodega Prices

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Those cans of Natty Ice/PBR/Bud Light from your bodega’s fridge maybe be about to get a whole lot more expensive, thanks to a huge merger between two of the city’s three biggest beer distributors. Manhattan Beer Distributors and Phoenix Beehive Beverages are joining forces, which has lead a coalition of 13,000 bodegas and some 100 trade groups to petition the Justice Department to stop the merger. Why? Because the two companies combined control 80 percent of the beer market in New York City, and could potentially set prices to whatever they feel like. Because bodegas don’t get the same wholesale discounts as grocery stores and chains (they don’t have the space to store things in that quantity), the hardest hit by the merger would be your friendly corner shop.

The Bodega Association of the United States has complained about the merger, releasing a report last week stating that “the growing beer monopoly threatens small retailers and beer drinking public with discriminatory pricing and high costs.”

What that actually means for consumers is that cheap beer is about to be not-so-cheap. Together, Manhattan and Phoenix Beehive distribute everything from Sam Adams to Heineken to Brooklyn Brewery, and can effectively control their pricing. That’s a big deal because roughly 65% of the beer sold in New York comes from bodegas, not big-box chains or grocery stores. Plus, independent distributors may have to raise prices to compete with the merged company. That’s bad news for craft brews because, as Grub Street points out, those indie distributors will take fewer risks on interesting brews if they have to pour more money into promoting what they’re putting out.

The merger has yet to be finalized, but the companies expect an answer this week. Buy up that New Year’s Four Loco while you still can.

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