Concentration in the Belgian brewing Industry and the Breakthrough of Lager in the interwar years pptx

Concentration in the Belgian brewing Industry and the Breakthrough of Lager in the interwar years by Peter VAN DER HALLEN Economic History Center for Economic Studies Discussions Paper Series (DPS) 07.28 http://www.econ.kuleuven.be/ces/discussionpapers/default.htm October 2007 1 ȱȱȱȱȱ¢ȱȱȱȱȱȱȱ ȱȱȱ ȱȱȱȘȱ ȱ ŗǯȱ ȱ ȱ   ȱ ȱȱ ȱȱȱ ŗ ȱȱȱȱȱ¢ȱ ȱ ȱ  ¢ȱ ¢ȱ ȱ ȱ ȱ ȱ  ȱ ǯȱ ȱ ȱ  ȱ ȱ ȱ ȱ  ȱ ȱ ¡ȱ ȱ ȱ ȱ  Ř ȱ ȱ ¡ȱ ȱ ȱ ȱ  ȱ ȱ ȱ ȱ ȱ ǯȱ  ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ¡ȱ ȱ  ȱ ȱ ȱ  ȱ  ȱ ¢ȱ  ȱ ȱȱȱ ȱ ǯȱ  ȱ  ȱȱȱ 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rs . 1 S e e : S U T T O N , J ., Sunk Costs and Market Structure: Price Competition, A dv ertising , and th e E v olution of Concentration, C a m b rid g e , 19 9 1 a n d S U T T O N , J ., T ech nolog y and Market Structure, C a m b rid g e , 19 9 8 . 2 C f in fra , p . 3. 3 B A K K E R , G ., ‘T h e d e c lin e a n d fa ll o f th e E u ro p e a n film in d u s try : s u n k c o s ts , m a rk e t s iz e , a n d m a rk e t s tru c tu re , 18 9 0 -19 27 ’ E conomic H istory R ev iew , 5 8 -2 (20 0 5 ), p . 310 -35 1. 4 B A IN , J .S ., B arriers to new Competition, C a m b rid g e , 19 5 6 . 2 ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǯȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱȱȱȱȱȱȱȱ¢ȱȱ ȱ ǯȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ¡ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ¢ǰȱ ȱ 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¢ȱȱȱȱȱȱȱȱȱȱȱȱ 17 A Nash eq uilibrium is one of the basic concepts of game theory whereas a balance between strategies forms if none of the players has an incentive (no gains will be made) to change his strategy unilaterally. When this condition is met a stable situation, which is called an eq uilibrium, arises. This is a configuration that allows no profitable deviation. 18 BAKKER, G., ‘The decline and fall of the European film industry: sunk costs, market size, and market structure, 1890-1927’ Economic History Review, 58-2 (2005), p. 319. 19 SUTTON, J., Technology and Market Structure, Cambridge, 1998, p. 10. 20 SUTTON, J., Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Cambridge, 1991, p. 45 6 ȱ¢ȱȱȱȱȱ¢ȱȁȂȱȱȱȱȱȱ¢ȱȱȱ ǯȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǯȱ ȱ ȱ ȱ ȱ Ȃȱ ȱȱȱȂȱȬȬ¢ȱȱȱȱȱȱ¡ȱ¢ȱȱ ȱȱȱ¡ȱǰȱȱȱ¢ȱȱȱȱǰȱ ȱȱȱȱ Řŗ ǯȱȱ ȱ ȱȱȱȱȱȁȱȂȱ¢ȱ¢ȱǰȱȱȱ 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ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ǯȱ ȱ ȱ ȱ ȱ ȱ ȱ 21 SUTTON, J., Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Cambridge, 1991, p. 47. 22 SUTTON, J., Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Cambridge, 1991, p. 308. 23 VAN CAYSEELE, P.J.G., ‘Market structure and innovation: A survey of the last twenty years’ De Economist, 146 (1998), p. 408. 24 BAKKER, G., ‘The decline and fall of the European film industry: sunk costs, market size, and market structure, 1890-1927’ Economic History Review, 58-2 (2005), p. 319. 7 ǯȱȱȱȱȱ¢ȱȱȱȱȱȱȱȱȱȱ ¢ȱ ǯȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱȱȱȱȱȱȱȱǯȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ 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Congres. Section Alimentation, p. 14. 29 HOELEN, H., De economische problematiek van de biermarkt, in het bijz onder in Nederland, Amsterdam, 1961, p.36. 30 PEUMANS, H., ‘de Evolutie der Belgische Brouwindustrie’, Economische Tijdingen van de K redietbank, 3 (1938), p. 97. 31 For the composition of ex penditures on beverages in Belgium: SEGERS, Y., Economische groei en levensstandaard, Leuven, 2003, p. 240. 32 Law ‘Van de Velde’ JANSEN, A.C.M., Bier in Nederland en België: een geografie van de smaak., Utrecht, 1987, p. 63. 33 CBB. 9 Graph 1: Beer production and Breweries (1900-1940) 0 2 000 4 000 6 000 8 000 1 0000 1 2 000 1 4 000 1 6 000 1 8 000 2 0000 1 9 00 1 9 05 1 9 1 0 1 9 1 5 1 9 2 0 1 9 2 5 1 9 3 0 1 9 3 5 Beer production/100 hL 0 5 00 1 000 1 5 00 2 000 2 5 00 3 000 3 5 00 4 000 Breweries B e e r p ro d u c tio n B re w e rie s ȱ ȱǻȱŗDZȱDZȱ řŚ Ǽȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱǰȱȱȱȱȱȱȱȱȱȱȱȱȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǯȱ ȱ ǰȱ ȱ ȱǰȱ¢ȱȱȱȱ£ǯȱȱŗşŖŝǰȱȱȱȱȱȱǰȱřřŞŝȱ ȱȱȱȱǰȱȱȱȱȱȱȱŗŜȱŘŞřȱŖŖŖȱ ǯȱ ȱ ȱ ȱ ȱ ȱ ŗŞŝŖȱ ȱ ȱ ȱ ȱ ȱ ȱŗŞŚŖȱȱŗŞŝŖȱȱȱȱȱȱȱȱȱ řś ǯȱȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱȱȱȱȱ£ȱȱȱȱ¢ȱǰȱȱȱ¢ȱȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ¢ȱ ȱ ȁȬȱ ¢Ȃǯȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ¢ȱ ǯȱ ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ǯȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ȱ ǯȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ¡ǰȱ ȱ ¢ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ȱ ȱ ǯȱȱȱȱȱȱ ȱȱȱǰȱȱ ȱȱȱǯȱȱȱǰȱȱȱȬ¢ȱǰȱ¢ȱ ȱ ȱ ȱ ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ 34 Confederation of Belgian breweries 35 MOMMENS, T., De Belgische voedingsnijverheid tijdens de negentiende eeuw. 1. De bier- en jeneverindustrie (1810-19 13 ). 2. De margarineindustrie (189 0-19 13 ), unpublished paper CES, Leuven, 1993, p. 4. and BAETENS, R., ‘Bierbrouwerijen en stokerijen’ in: Industriële revoluties in de provincie Antwerpen, Antwerpen, 1984, p. 105. [...]... ’—žœ›¢ȱ’—ȱ‘Žȱ—Ž› Š›ȱŽŠ›œȱ˜›ȱ‘ŽȱŽŒŽ——’ŠȱŠŽ›ȱȱ˜Ž—ȱ’Ž›Ž—ȱ™›˜žŒ’˜—ȱ 64 GREER, D., ‘Product Differentiation and Concentration in the Brewing Industry , The Journal of Industrial Economics, 19-3 (1971), p 206.; PELES, Y., ‘Economies of scale in advertising beer and cigarettes’, The Journal of Business, 44-1 (1971), p 32 65 JANSEN, A.C.M., Bier in Nederland en België: een geografie van de smaak., Utrecht, 1987, p.215216 20 ™•Š—œȱ... 66 SUTTON, J., Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Cambridge, 1991, p 285-304 67 STACK, M., ‘Local and regional brewers in America’s brewing industry, 1865-1920’ Business History review, 74-3 (2000), p 435-463 68 SUTTON, J., Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Cambridge,... H., ‘Bier’ in: LINTSEN, H.W (ed.), Geschiedenis van de techniek in Nederland De wording van een moderne samenleving, 1800-1890., Zutphen, 1993, p 198-199 42 JANSEN, A.C.M., Bier in Nederland en België: een geografie van de smaak., Utrecht, 1987, p 20 43 JANSEN, A.C.M., Bier in Nederland en België: een geografie van de smaak., Utrecht, 1987, p 3334 and SIGSWORTH, E.M., ‘Science and the Brewing Industry, ... THOMAS, H., The industry context of strategy, structure and performance: the UK brewing industry Strategic Management Journal, 8-4 (1987), p 344 90 HOELEN, H., De economische problematiek van de biermarkt, in het bijzonder in Nederland, Amsterdam, 1961, P 466-467 91 WILLEMS, D., Toepassing van de Sutton-methode voor bedrijfstakanalyse, sector: bierindustrie, onuitgegeven licentiaatsverhandeling, Leuven,... Bulletin de l’Association des anciens étudiants en brasserie de l’U niversité de Louvain, 54-3 (1958), p 94 78 This law made mergers and acquisitions easier because it replaced most of the existing laws concerning these activities The law furthermore exempted taxes on the surplus capital by liquidation of companies in case of mergers BAUDHUIN, F., Histoire économiq ue de la Belgiq ue 1914 -1939: Grandeurs... ’—Ž› Š›ȱ¢ŽŠ›œȱŠ™™ŽŠ›ȱ˜ȱ‹ŽȱŠȱŸŽ›¢ȱ’–™˜›Š—ȱ™Ž›’˜ȱ˜›ȱ‘ŽœŽȱŽŸŽ•˜™–Ž—œǯȱ ȱ ȱ ȱ 25 SUTTON, J., Technology and Market Structure, Cambridge, 1998, p 17 SUTTON, J., Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Cambridge, 1991, p 309 27 BAKKER, G., The decline and fall of the European film industry: sunk costs, market size, and market structure, 1890-1927’ Economic History Review, 58-2 (2005),... ‘žœȱ •ŽŠŸ’—ȱ ‘Ž’›ȱ 61 VAN CRIEKINGE, H., ‘Les industries alimentaires belges et le tabac en 1936’ Bulletin trimestriel de l’Association des anciens élèves de l’Ecole supérieure de brasserie de l’ université de Louvain, 37-2 (1937), p.97 62 HET BROUWERSBLAD, 33 (1925), p 314 63 HOROWITZ, I.; HOROWITZ, A.R.; ‘Firms in a Declining Market: The Brewing Case’ The Journal of Industrial Economics, 13-2 (1965),... ¡™˜›ȱŒ˜—œ’žŽȱŠȱ–˜œȱŖǯřƖȱ˜ȱ˜Š•ȱ 76 These data are constructed by means of reports of primary materials for the Excise Authority by the main Belgian breweries These data were for some time publicised by Het Brouwersblad, but their publication was quickly halted due to complaints of smaller breweries, who saw those publications as a form of free advertisement for the large breweries 26 ™›˜žŒ’˜—ȱŠ—ȱ’–™˜›ȱŠŒŒ˜ž—Žȱ˜›ȱ—˜ȱ–˜›Žȱ‘Š—ȱŗǯşƖȱ˜ȱ˜Š•ȱŒ˜—œž–™’˜—ȱž›’—ȱ... ŠŸŽ›’œ’—ȱ˜ž•Š¢œǰȱ’—ȱ™Š›’Œž•Š›ȱ’—ȱ‘Žȱ•ŠŽ›ȱœŽ–Ž—ǯȱȱ 86 PEUMANS, H., ‘de Evolutie der Belgische Brouwindustrie’, Economische Tijdingen van de Kredietbank, 3 (1938), p 113-114 87 ADAMS, W.J., ‘Beer in Germany and the United States’, Journal of economic perspectives, 20-1 (2006), p 198 88 SUTTON, J., Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Cambridge, 1991, p 515-521 30 ˜›ȱ Šȱ •˜—ȱ... •˜—ǰȱ ‘žœȱ ‘Š–™Ž›’—ȱ ž›‘Ž›ȱ 34 Confederation of Belgian breweries MOMMENS, T., De Belgische voedingsnijverheid tijdens de negentiende eeuw 1 De bier- en jeneverindustrie (1810-19 13 ) 2 De margarineindustrie (189 0-19 13 ), unpublished paper CES, Leuven, 1993, p 4 and BAETENS, R., ‘Bierbrouwerijen en stokerijen’ in: Industriële revoluties in de provincie Antwerpen, Antwerpen, 1984, p 105 35 9 ›Š—œ™˜›ȱ˜›ȱ›ŠŽȱ˜ŸŽ›ȱ•˜—Ž›ȱ’œŠ—ŒŽœǯȱ˜›Ž˜ŸŽ›ǰȱ˜›ȱ–˜œȱ‹›Ž Ž›’Žœȱ‘Ž›Žȱ Šœȱ‘Žȱ . Concentration in the Belgian brewing Industry and the Breakthrough of Lager in the interwar years by Peter VAN DER HALLEN Economic. A.R.; ‘Firms in a Declining Market: The Brewing Case’ The Journal of Industrial Economics, 13-2 (1965), p.129-153.; DONNACHIE, I., A history of the brewing industry in Scotland, Edingburgh, 1979 techniek in Nederland. De wording van een moderne samenleving, 1800-1890., Zutphen, 1993.; GREER, D., ‘Product Differentiation and Concentration in the Brewing Industry , The Journal of Industrial