CEPII, Recherche et Expertise sur l'economie mondiale
Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition

Vanessa Alviarez
Keith Head
Thierry Mayer

 Points clés :
  • Brand amalgamation raises markups
  • Competition policy has limited the negative effects
  • Firm fixed effects contribute little to brand performance

 Résumé :
We assess the consequences for consumers in 76 countries ofmultinational 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.

 Mots-clés : Mergers | Markups | Globalisation | Competition

 JEL : F12, F23, L13
CEPII Working Paper
N°2020-13, November 2020

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