Dear Capitolisters,

I try to avoid repeatedly covering the same policy issues, but a new report from the Treasury Department on antitrust and the U.S. alcohol industry leaves me little choice. It’s just too good an example of politicized thinking on antitrust and why we should be broadly skeptical of the growing movement, echoed by some in the Biden administration, to move U.S. antitrust policy away from the traditional goal of protecting “consumer welfare” and toward other things like attacking pervasive and presumably pernicious (no, not that Pernicious) “market concentration” or even battling inflation. 

The Treasury report stems from President Biden’s expansive July 2021 executive order on “Promoting Competition in the American Economy,” which among other things directed Treasury, in consultation with the Department of Justice and the Federal Trade Commission, to assess threats to competition and barriers to new entrants in the U.S. market for beer, wine, and spirits. The report summarizes the U.S. alcohol market and the federal, state, and local laws that influence it. 

As a fact-finding matter alone, Treasury does a decent job of laying out the various issues. Its report runs into problems, however, when it strays from the facts and recommends new DOJ and FTC scrutiny of the U.S. alcohol sector. As we’ll discuss today, the facts simply can’t support that position: The U.S. booze market is unquestionably the most diverse, innovative, and consumer-friendly in our lifetimes—something Treasury itself begrudgingly acknowledges. So if the Biden administration can recommend extra antitrust scrutiny of this market, then no market is safe from federal government intervention.