All across the internet, articles like this one from The Business Edition have been popping up reporting how America’s biggest breweries, MillerCoors and Anheuser-Busch, will be raising prices. One can only imagine that the rest of the macro-breweries will follow suit, as this is clearly in response to the fact that sales of macro-beers keep dropping while micro-beer sales are on the rise.

Instead of trying to compete in terms of quality, these breweries have opted to up their prices, recovering their losses via the consumer’s pocketbook. Although some may see this as a logical move, it is very short-sighted and will hurt them in the long run. Yes, raising prices will help the balance sheets appear normal to appease their shareholders, but as time goes on, all they will have done is take away one of their key competitive advantages over micro breweries. Right now the big breweries have price, volume, marketing, and distribution channels to leverage. By raising the price they not only negate that advantage, but will in turn lessen their volume and upset their distributors.

The question is what comes next. Thanks to this move, micro breweries’ will be more competitive dollar for dollar. Now if they can prove their craft beer is better than the mass market swill produced by the big boys, they have a serious chance of stealing even more market share. The only disadvantage is the big breweries still maintain the marketing budgets to convince people what they are buying is the best out there. The craft brewers out there have to use this small window to their advantage by getting out in their local scene and converting macro drinkers before the big breweries marketing budgets can convince them the price increase is justified.

Categories: