Yesterday’s Wall Street Journal brought the story, “Bud Crowded Out by Craft Beer Craze.” While Bud Light is currently the highest selling beer in the United States, the flagship brand Budweiser is fading. The international beverage giant is scrambling to win over younger drinkers to boost Budweiser sales, so the familiar Clydesdale horses are out this holiday season and ads will take on a younger vibe.

On Facebook Alexie Marcoux commented that Budweiser’s decline ought to put the end to the old Galbraithian narratives about corporations so powerful they can dictate tastes and preferences. We can hope (but I’m not hopeful — I suspect the demand for evil dragons to be slain by heroic antitrust economists will keep the myth alive).

The beer giant has been through a few mergers over recent years, and I wondered how Budweiser’s troubles were reflected in the related antitrust analysis. Antitrust theory isn’t built on the work of John Kenneth Galbraith, but antitrust narratives conjure similar images of powerful corporations and seemingly helpless consumers (granted that antitrust lawyers write in more leaden prose than JKG).

In January 2013 the U.S. Department of Justice Antitrust office filed a lawsuit challenging Anheuser-Busch InBev’s acquisition of a 100 percent stake in Grupo Modelo. Here is what Justice was worried about just over a year ago:

The Department of Justice filed a civil antitrust lawsuit today challenging Anheuser-Busch InBev’s (ABI) proposed acquisition of total ownership and control of Grupo Modelo. The department said that the $20.1 billion transaction would substantially lessen competition in the market for beer in the United States as a whole and in 26 metropolitan areas across the United States, resulting in consumers paying more for beer and having fewer new products from which to choose. Americans spent at least $80 billion on beer last year. According to the department, ABI’s Bud Light is the best selling beer in the United States and Modelo’s Corona Extra is the best-selling import. Because of the size of the beer market in the United States, even a small increase in the price of beer could result in billions of dollars of harm to American consumers, the department said. … According to the department’s complaint, the U.S. beer market is already highly concentrated, and prices are increased by strategic interactions among the largest brewers, including ABI and MillerCoors. ABI generally acts as the price leader, implementing annual price increases in the sub-premium, premium and premium plus segments of the U.S. beer industry. MillerCoors and other brewers have typically joined the ABI price increases, while Modelo has not. By pricing aggressively, Modelo–through its importer, Crown Imports–puts pressure on ABI to maintain or lower prices, especially in certain parts of the country. As a result, Modelo has become a particularly important competitor in the U.S. market.

The press release manages to divide the industry into for segments, from “sub premium” (i.e. Busch and Keystone) to “high end” which is described as including Corona, Heineken, “and a variety of craft beers.” This brief mention, as just a fraction of a segment of the industry, is the only mention of craft beers in the press release. Justice’s formal complaint mentions craft beers three times, each time more or less as an aside — they missed the real market action.

In the resulting agreement, the United States federal government sought to promote competition in the beer industry by, among other things, extracting a promise from the company acquiring a few AB-InBev assets that it would expand the capacity of a brewery in Mexico to at least 20 million hectoliters of packaged beer annually.

For this heroic antitrust effort beer consumers in the United States offer a heart-felt yawn. How many of our tax dollars when into deciding whether the Mexican brewery needed a capacity of 20 million hectoliters, rather than 15 million or 23.5 million?

Meanwhile, actual competition in the market continues to force international beverage giant AB-InBev to scramble for new customers.

NOTE 1: See full collection of Justice documents here.

NOTE 2: It isn’t just the Department of Justice, the private think tank the American Antitrust Institute is also worried about concentration in the beer market. Just a few days ago AAI sent a letter to the Department of Justice expressing concern about rumors of a AB-InBev merge with SABMiller. That letter follows AAI’s lengthy report, Global Beer: Road to Monopoly, which two years ago worried about a then-rumored merger between AB-InBev and SABMiller and the prospect of creating “a huge entity with great market power.”

I keep wondering how great the market power can be in a world without barriers to entry? No real secrets in how to brew beer. I suspect the biggest threats to competition emerge because alcohol distribution is highly regulated in the United States — not because one brewery in Mexico has a smaller than desired production capacity — but I suspect the Department of Justice will not be challenging the post-prohibition three-tier system anytime soon.