Monday, September 8, 2014

Why does beer cost so much?

I like beer, and my beer of choice is Natural Ice.  Just recently the price went up to just under $10, and that includes the deposit.  While I enjoy it a lot, I would enjoy it a lot more if the price wasn't so high.

So why is the price of beer so high?  This was a topic recently taken up by Bonnie Kristian at CainTV.com: "Here's how government makes your beer 44 percent more expensive and way less tasty."  She wrote:
The last six-pack of beer I bought ran me about $11. It was a craft Altbier from Wisconsin, and it was lovely.
It was also 44% more expensive than it needed to be.
Yep, it turns out if you total up all the taxes “levied on the production, distribution and retailing of beer,” according to the Beer Institute, they add 44% to the retail price. My Altbier pack could have cost just $6.60, which definitely would have made it even more delicious.
For craft brewers and beer drinkers in Florida, this bad situation is about to get much worse. That’s because there’s a bill making its way through the Florida state legislature right now which would force all breweries to sell their beer to distributors and then buy it back again before selling it to customers.
If this sounds completely nonsensical, that’s because it is.
For big beer makers, like Miller and Anheuser-Busch, a law like this is no problem. Corporate brewers don’t typically sell beer straight to customers anyway; and if they want to, they can afford to absorb the extra cost.
But for smaller, craft breweries in Florida, this bill could be devastating. The buy-back mark-up from distributors will force brewers to raise their prices by at least 30%, meaning a huge hike in prices at that adorable little brewpub you keep meaning to visit.
In other words, regulations like these mean less success for local brewers and therefore less tasty beer for us.
It should come as no surprise, perhaps, that the Florida state representative who sponsored the bill received $3,500 in donations from big brewers the month before he introduced this legislation...
On a national scale, small breweries are still subject to extensive federal regulations which many can’t afford to follow. Changes that are easy for a Pabst or Coors factory to make come with exorbitant costs for microbrewers, making it impossible for many to stay in business—a classic example of the way regulations tend to benefit the big businesses which lobby for them at the expense of their smaller competitors.
Meanwhile, the Alcohol and Tobacco Tax and Trade Bureau (TTB) is limiting your access to new beers from out of state. The TTB requires all beers sold across state lines to undergo an additional approval process, which slows the distribution process and can stretch the finances of small, new breweries.
Again, if you want to stop large, rich corporations from spending millions of dollars each year trying to influence government, make it so the government has less influence over them.  That's truly the only way to solve this problem.

While I post about half the article here, it's worth your time to click on over and read the rest.  Kristian also writes a neat history of beer and beer regulations that have made beer taste less good and cost more.