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.

It's okay to be the party of no

There's an old saying that "it is better to do nothing than to do something stupid and unproven.  A government that heeds this advice would be far more likely to be successful than one that responds to all the whims and wishes of modern society.

Too many times we hear people see a problem and say, "We have to do something!"  It's good to search for solutions, but it's not good when these solutions are based on emotion as opposed to hard core facts.

Most U.S. Presidents before Woodrow Wilson had a Laissez-faire, or hands-off approach to government.  They basically stood on the sidelines and acted only when necessary.  Yet that all changed with Woodrow Wilson.

In fact, I believe it was Grover Cleveland (correct me if it was a different president) who was presented with a bill by Congress that would give increase taxes and donate $10,000 to states ravaged by natural disasters.  He vetoed the bill saying that the people are more effective at solving such problems than the government.  He was right. Since they weren't taxed, private people donated over $1 million to the cause.

During the 1920s the economy soared in an environment whereby the federal government basically cut taxes, cut regulations, and then just sat on the sidelines. That decade saw the greatest economic boom of all time, resulting in basically no unemployment.

During the 1920s taxes and regulations were scaled back, and that decade saw that largest rise in charitable givings in the history of this great nation.  So even while our nation is more charitable than any other nation in history, imagine if our leaders had more of a Laissez-faire approach to government.

Then we have examples of the opposite happening.  FDR raised taxes and regulations to the point that the great depression lasted ten years, while most recessions and depressions prior to the great depression were all short lived. They were short lived because legislatures and the president trusted the American people to turn things around.

The same thing happened during the last year of George W. Bush's term, and the entire Obama term, whereby the government overreacted to a recession and ended up making matters worse.  While our latest recession started in 2008, there is still no evidence that it is improving.

So, bottom line, Laissez-faire governments work best.