Malt, hops, yeast, water, and regulatory regimes: market structure, profitability, and firm survival in the Swedish beer industry, 1920–1990

Description

The Swedish brewery sector was like few other industries the target of regulations during the 20th century. Alcohol legislation affected production possibilities, sales, and probably also market structure, for instance through creating larger business groups with few new entries in the market. This project will investigate different several different aspects regarding the brewery sector during the 20th century: a) market structure (market concentration); b) production structure and profitability; c) firm survival and business strategies, including the mechanism of cartelization within the sector.

So far the project has shown that the prohibition on strong beer in 1923 led to difficulties in production and falling profitability until 1950 (Häggqvist, 2023). It likely also caused increased differences between larger and small firms and laid the groundwork for future market concentration. The Swedish and Norwegian brewery cartels are being investigated in depth in a forthcoming PhD-thesis (Hage Stjern, 2025). One of the conclusions is that the two cartels worked as self-regulating organs under state supervision, with their own rules and regulations regarding the division of the sales market, price-setting, and negotiations with other sectors. The thesis also show how the cartels treated members who bend or overstepped the rules.

Future publications in the project will investigate the drivers of market concentration in the long run, the connection between market concentration and cartelization, and state ownership of breweries.