AMONG THE BILLS Congress is considering and that it may, in the rush of activity at the end of the session pass, is one that would almost surely raise the price of a commodity many citizens consider as American as apple pie: beer. The bill is the Malt Beverage Interbrand Competition Act (yes, that's really what they call it), and its purpose is to allow beer producers to agree to give their wholesalers exclusive rights to sell their brands in a particular territory. Its chief backers are the National Beer Wholesalers Association and its political action committee which is called, truly, SIXPAC.
That seems to us -- and, more relevant, to the Justice Department and the Federal Trade Commission as well -- to be an unwarranted exemption from the antitrust laws. It's illegal generally for firms that would otherwise be competitors to agree not to compete in a particular market. The reason is fairly obvious: each firm could charge what it pleased in that market. Backers of the SIXPAC bill argue that that would not be the case here, and they are partially right -- but only partially. It is true that a wholesaler with exclusive rights to sell Budweiser, for example, in the Washington market would not charge too much, or he would lose sales to the wholesaler with exclusive rights to sell, say, Miller. And there could still be keen competition between wholesalers handling different brands in servicing bars and restaurants. But price competition would to some extent be dampened. Beer producers like Miller and Budweiser advertise their brands heavily, and many consumers have a strong preference for a particular brand of beer. Beer wholesalers with exclusive rights to provide such consumers with beer will be able to charge more than they would if they had competition.
The wholesaling of alcoholic beverages is already a business tightly regulated by the states, and rightly so. In many states it is a business difficult to enter. That is all the more reason, we think, not to allow division of territory between wholesalers. Advocates of the SIXPAC bill argue that Congress has already passed a bill allowing division of territory between soft-drink wholesalers; this was a measure passed after the FTC threatened a marketing arrangement that had prevailed in the soft-drink industry throughout the 20th century. But the fact that anti-competitive agreements were tolerated a long time in one business was not a good argument for legalizing them in that business and is certainly not a good reason to extend that principle to another business, one in which such territorial divisions have been illegal in most states.
Unfortunately, 278 members cosponsored the SIXPAC bill introduced by Rep. Jack Brooks (D- Tex.) in the House, and 65 members cosponsored the same bill introduced by Sens. William Proxmire (D-Wis.) and Robert Kasten (R-Wis.) in the Senate -- majorities in both houses, but numbers short in each case of the two-thirds needed to override a presidential veto. We hope that the strong opposition from the Justice Department means that President Reagan will indeed veto the SIXPAC bill if it is passed, and that this will not be one of those anti- competitive laws a smart lobby slips through while ordinary citizens are not paying close attention.