On February 9, the Treasury Department issued a report analyzing competition in the US alcohol industry (defined as beer, wine, and spirits), which outlined several proposed reforms aimed at improving competition in the sector.

The report stems from President Biden’s July 2021 Executive Order on Promoting Competition in the American Economy, intended to reduce corporate consolidation and increase competition across more than a dozen industries. The administration outlined its priorities in the executive order, and federal agencies are beginning to comply as they commission reports, initiate studies, and consider new rules to help bring the administration’s agenda to fruition. For example, in January the Federal Trade Commission and Department of Justice jointly announced plans to overhaul merger guidelines – a directive in President Biden’s Executive Order that has now been endorsed by the Treasury Department in its report on the alcohol industry.

The detailed 63-page report was released after a period of public comment, with consultation from both the FTC and the DOJ. The Treasury Department analyzed the markets for beer, wine, and spirits and raised concerns about continuing consolidation in both the manufacturing and wholesale of alcohol. According to the Treasury Department, despite the growth of small craft producers of beer, wine, and spirits over the past few decades, there has been significant consolidation in distribution. Treasury posited that existing regulations at the state and federal level may disproportionately burden those small craft producers without a corresponding justification.

The Treasury Department made several recommendations aimed at allowing small business and new entrants to more effectively compete with larger market participants in beer, wine, and spirit markets. Specifically, it recommended that:

  • DOJ and the FTC strengthen their review of horizontal consolidation by applying “particular skepticism to claims of efficiencies, and particular attention to concerns relating to coordination, in assessing mergers and in considering revisions to merger guidelines”;
  • DOJ consider the effects on distribution stemming from the acquisition of craft brewers by larger brewers, in particular;
  • DOJ and the FTC, in consultation with the Alcohol and Tobacco Tax and Trade Bureau (TTB), examine vertical arrangements that may lead to monopolization;
  • TTB prioritize labeling rules that protect consumers and reduce regulatory requirements that burden new entrants and small businesses;
  • TTB consider rulemaking to clarify categories of conduct that are intrinsically harmful;
  • TTB evaluate its trade practice enforcement policies, including complaints of under-enforcement of anticompetitive conduct by large industry participants; and
  • States examine whether state regulations, including franchise laws and distribution models, impede the ability of small producers to compete in the market.


As the federal antitrust enforcement agencies and certain State Attorneys General continue to evince their concerns about consolidation across many industries in accordance with the President’s agenda, companies should be prepared for a tougher antitrust enforcement environment characterized by increased scrutiny of transactions and investigations into industry practices concerning pricing. Now that competition concerns in alcohol markets have been raised by the Biden administration, scrutiny of transactions in the beer, wine, and spirits sectors all the more likely. Even smaller deals and vertical transactions may be subject to antitrust scrutiny from both federal and state antitrust enforcement agencies.