"Where there is no vision, the people perish: but he that keepeth the law, happy is he."
-- Proverbs 29:18, King James Bible (KJV)

Friday, February 17, 2017

UK's Competition and Markets Authority (CMA) Opens Investigation of Heineken Purchase of Punch Taverns While Technology Company Monopolies Flourish

It is time to turn from ephemeral political issues to things that really matter long-term to the average man out there in the real world: like the future of beer and pubs in the Brexit-besotted United Kingdom.

As we read at Out-Law.com, the UK's Competition and Markets Authority (CMA) has opened an investigation into the Heineken purchase of Punch Taverns.

Now what could be competitively wrong with that purchase? The number of different beers available in the UK is immense and the number of superb pubs on the British Isles is of course legendary.  Here is what Heineken's managing director, David Forde, wrote about the beverage market in the UK in November, 2014 (fairly recent in terms of publications of this nature):

"Heineken UK is a company that has 42% market share in cider and roughly 24% market share in beer.  And I know you guys know the market well.  It’s a fragmented market.  The UK is a very competitive market.  It’s one of the few markets where the five big global brewers are all present.  We still have a strong regional brewer base in the UK and they have about between 20% and 23% of the market with strong pub estates.  So this is one of the more competitive markets in the UK, or in the world. But we find ourselves with Heineken UK with a remarkably strong position."

Of course, pub acquisition is one way to make sure that your beverage brands retain high visibility and help to expand your markets, if possible. Nevertheless, there is little reason here to worry that the strong competitive beverage climate in the UK will suffer greatly from the Punch Taverns acquisition.

What irritates this writer is that anti-trust and competition authorities in the USA and Europe have no qualms to investigate the highly competitive beverage industry, but seem to do virtually nothing to halt the abusive ongoing and proliferating monopolistic excesses that permeate the oft non-competitive technology industry among the big tech monopoly players (the percentages below are not as recent as they could be, but they give a good general picture of the competitive lay of the land):
  • Qualcomm (90% of small mobile device LTE semiconductors) --- see in this regard the recent FTC Charges Qualcomm With Monopolizing Key Semiconductor Device Used in Cell Phones (is a whopping 90% the monopoly threshold to get the FTC to initiate action??!!!!)
  • Microsoft (89% of the PC operating system market via Windows)
  • Intel (88% of the x86 processor market)
  • Google (88% of the smartphone operating system market via Android)
  • Google (80% of the search engine market share via Google Search)
  • Oracle (55% market share of integrated systems - Oracle is the world's 2nd largest software company, behind 1st-place Microsoft)
  • Amazon (43% of online retail sales in the USA)
  • Facebook (42% of the social network market)
  • Verizon (ca. 35% market share of wireless systems in the USA)
  • AT&T (ca. 32% market share of wireless systems in the USA)
  • Vodafone (ca. 30% telecommunications market share in numerous countries)
  • Apple (ca. 25% of the global tablet market)
  • Hewlett Packard Enterprises (ca. 25% of the enterprise server market)
So, now the competition authorities are going to go after a beverage company with a 24% beer market share in the UK????, a market share LOWER than ANY of the above tech company market shares....

There are 1700 breweries in the UK. One Thousand Seven Hundred. We call that a pretty healthy, competitive industry.

How many competitors are there in each of the above mentioned categories of the technology monopolists and why have the anti-trust and competition authorities in Europe and the USA already long ago not instituted massive corrective measures, and not have passed desperately needed reformed patent laws, to restore healthy competition to the various branches of those technological industries????

That is the question.