United States v. Pabst Brewing Co., 384 U.S. 546 (1966)
U.S. Supreme CourtUnited States v. Pabst Brewing Co., 384 U.S. 546 (1966)
United States v. Pabst Brewing Co.
Argued April 27, 1966
Decided .June 13, 1966
384 U.S. 546
In 1958, Pabst Brewing Company, the country's tenth largest brewer, acquired Blatz Brewing Company, the eighteenth largest, thus becoming the fifth largest with 4.49% of the total industry sales. The Government brought this action charging that the acquisition violated § 7 of the Clayton Act because its effect "may be substantially to lessen competition" in the production and sale of beer in the United States, in Wisconsin, and in the three-state area comprising Wisconsin, Illinois and Michigan. The Government introduced evidence to establish a marked decline in the number of brewers and a sharp rise in the share of the market controlled by the leading brewers, both prior to and following this merger. It also showed that the combined share of the two companies in Wisconsin in 1957 was 23.95%, and in the three-state area was 11.32%. At the close of the Government's case, the District Court dismissed the case, finding that the Government had not shown that Wisconsin or the three-state area as a relevant geographic market within which the probable effect of the acquisition should be tested, and had not shown that the merger might substantially lessen competition in the continental United States, the only relevant geographic market.
1. By the language of the Act, the Government must only prove that the effect of the merger may be substantially to lessen competition in any line of commerce "in any section of the country." Pp. 384 U. S. 548-550.
(a) A violation of § 7 would be proved by evidence showing that competition may be substantially lessened throughout the country or only in one or more sections of the Nation, and failure to prove a relevant "economic" or "geographic" market is not an adequate ground for dismissal. P. 384 U. S. 549.
(b) Proof of the section of the country where the anticompetitive effect exists is entirely subsidiary to the crucial § 7 question, which is whether the merger may substantially lessen competition anywhere in the country. Pp. 384 U. S. 549-550.
2. The evidence as to the probable effect of the merger of these to large corporations, in an industry which is rapidly becoming more concentrated, on competition in Wisconsin, in the three-state area, and in the entire country, was ample to show a violation of § 7 in all these areas. Pp. 384 U. S. 550-552.
3. The Act is concerned with arresting concentration of the economy, whatever its cause, in its incipiency, and the Government has no duty to show that the trend towards concentration in the beer industry is due to mergers. Pp. 384 U. S. 552-553.
233 F. Supp. 475, reversed and remanded.