A1 - Vanessa Alviarez
A1 - Keith Head
A1 - Thierry Mayer
TI - Global giants and local stars: How changes in brand ownership affect competition
IS - 2020-13
T3 - Working Papers
KW - mergers
KW - markups
KW - globalisation
KW - competition
N2 - 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.
ER -