The Beer IneQuality Index

The conventional Canadian view is that American beer is bad; watery and weak. Yet American breweries produce some of the world's best beers - superb brews coming out of microbreweries across the country.

What is striking about the United States is the country's level of inequality - or, to be more precise, the beer quality inequality. Countries like Germany, Belgium - the Scandinavian countries in general - have much less variation in the quality of their beer.

The question is: why? Does beer quality inequality result from other forms of inequality, like disparities in income and wealth? Or do the forces that produce income inequality also produce beer quality inequality? Is it a spurious correlation, or is the armchair empiricist's observation that the US has more beer ine-quality simply wrong?

The income-causes-beer quality inequality story is easily told. Some people are poor. They demand cheap beer, and cheap beer is necessarily poor quality. Some people are rich. They demand high quality beer, and are willing to pay for it. Hence, in theory, we would expect income inequality to produce beer quality inequality. As an empirical observation, the US has substantially more income and beer quality inequality than other rich countries, including Canada, while Scandinavian countries have some of the lowest levels of income and beer inequality in the world (here). So income inequality causes beer quality inequality: Q.E.D.

This story is plausible, and there may be some truth to it. The problem with it is that not everybody drinks beer. Take a country like England, for example. There beer was traditionally a working man's drink - the upper classes sipped Pimm's on the lawn, or perhaps a gin and tonic. If the rich aren't drinking beer, an increased concentration of income in the hands of the richest 1 percent will have no impact on the variation in beer quality.

Demand-driven heterogeneity in beer quality only reflects heterogeneity in the preferences and incomes of beer drinkers, not (necessarily) broader social inequality. In fact, what might be remarkable about the US is not so much the inequality in income, but the democracy in drinking - rich and poor alike end the day with a hard-earned beer.

An alternative theory that beer quality inequality is produced by the same factors as drive income inequality: low tax rates, low levels of unionization, lack of regulation in general.

 Take Germany, for example, where the quality of beer is relatively heavily regulated. This level of regulation is a manifestation of the way that Germans conceive of the appropriate role of government vis–à–vis private enterprise. The country has traditionally been a corporatist welfare state. Governments protect businesses, businesses protect workers, the average working person has a decent standard of living, and income inequality is relatively low. (This consensus may be collapsing - but then the German beer industry is not in great shape either).

Or take Canada. As any serious student of beer labels can tell you, the major Canadian beers are union made. Canadian beer is also subject to higher taxes than US beer. These forces push up the price of bottle of beer in Canada.  An American manufacturer can make money by lowering quality and upping quantity; moving vast amounts of cheap weak watery beer. This strategy does not work in Canada. Taxes and labour costs mean that it is simply not possible to produce ultra-cheap beer. Instead, Canadian brewers compete by putting more beer quality into every can or bottle - more alcohol, more flavour, and so on. Inequality in the quality of beer overall is reduced, by the same forces - taxation, redistribution, unionization - as reduce income inequality. (Empirical research finds that the inequality-reducing effect of unionization through increased wages for workers outweighs any potential inequality-enhancing effects created by the gap between union and non-union wages. For a readable but serious analysis of the drivers of income inequality in Canada, see here).

Economies are complicated. Vastly, hugely, mind-bogglingly complicated. Economists try to compress that complexity into a single number - GDP, per capita GDP, the Gini inequality index, the UN HDR ranking, and so on. But looking at those numbers, and seeing that the US Gini index is 40.8, while Canada's Gini is 32.6 and Germany's is 28.3 (here) - does not deliver a gut sense of what they mean for people's every day lives. When I want to feel get a feel for an economy, I go grocery shopping - so I can see what people buy every day, what they can afford, and what people purchase in their quests for a good life.

Comments

[Jacques René Giguère]

German beer is highly regulated! Will Schaüble close the banks until it is corrected?

[Evan Harper]

So here is an overly long post from a guy who reads economics blogs and drinks a lot of beer, including both bargain lagers and snobby craft IPAs.

I don't agree that mainstream or "macro" American beer doesn't stand comparison to standard "macro" Canadian or European products. Beer snobs are perpetually cooking up conspiracy theories to explain why macros regularly win prizes in competitions that use blind taste tests, in the "pale lager," "cream ale," "light lager" categories etc (ie, the categories that describe the kind of beer most people think of as just "beer.") It is true that American lagers tend to be marginally less bitter than Euro lagers, in keeping with the general American preference for sweet things – but bittering hops are such a tiny fraction of the cost of these beers that they can be safely ignored for economists' purposes.

In my experience there's a sharp divide in opinion about "macro" beer between beer people who only drink and talk about beer, and people who brew their own. It's not widely appreciated how difficult these "boring" beers are to brew – their very boringness makes even small deficiencies in ingredients or technique stand out glaringly.

Does the price floor story really hold up? "Macro" beers seem to compete more on brand identity than anything else. Molson Canadian, the top domestic, commands a slight price premium. True North Blonde and Upper Canada Lager match or undercut even the cheaper macros like Blue and Carling, but the former are all-malt "craft" lagers that beer snobs much prefer.

Also, the German Reinheitsgebot is widely misunderstood, mythologized, and even propagandised. Historically it was an obscure seigneurial privilege made to benefit some long-forgotten interest group in Medeival Bavaria. The "consumer protection" story makes no sense as barley is cheaper than other grains supposedly used to "adulterate" beer, let alone refined sugars. Around Shakespeare's time in England you often find hops being vilified as a cheaper foreign substitute for the proper, traditional gruit (blend of bitter herbs like bog myrtle,) and apparently Shakespeare himself was a partisan as his characters often praise "ale" (gruit beer) and refer to "beer" (hopped beer) in disparaging contexts.

Beer is... a strange product. Probably it's the same with food and drink in general. Preconceived expectations, brand identity, cultural context, signalling all seem to influence preferences much more than objective factors, at least when the products are so similar. Triangle tests have shown repeatedly that typical consumers can't distinguish between e.g. Blue and Canadian or Budvar, Heineken, and Stella. Craft beer brewers have gotten a lot of mileage out of sketchy or downright false claims about evil corporate overlord brews. And I get the impression that if you corner a craft brewmaster and buy them a few drinks they'll admit that many of their own customers have little or no idea what the product is "supposed" to taste like and are just going along for the ride. (Read beer snobs on review sites talking about beer that's "supposed" to be bad, they'll make all kinds of ridiculous claims like it tastes like vomit, dish soap, pee...)

Yeah, the whole thing is a big mess and I don't really know what to make of it. I only drink the stuff. :)

[Tom Brown]

I'm an American who's neither rich nor poor, but I actually prefer cheap watery beer, and not just because I'm stingy (although that's definitely part of it). So there's that too. If one brand is a nickle cheaper per six pack, I'll question whether I can really tell the difference, and pick the cheaper one every time. I do have my limits though: Trader Joe's "Name Tag" beer is substantially cheaper but undrinkable (though I've tried more than once to be sure).

[Lord]

The largest cost is marketing and distribution and that has favored economies of scale profit seeking and least common denominator beer, but has also lead to its decline and a resurgence of craft brewing, so I would put this as a long wave, large and slow due to the scale of the market, but one whose economy of scale may be breaking down also. Will we ever see such mass markets again? Hard to contemplate though most industries go through shake outs.

[Frances Woolley]

Evan - there is something to be said for the argument that US and Canadian beers aren't that different - see, for example, this interesting article describing how the myth of weak American beer is just that - a myth - resulting from the different ways in which alcohol content is measured in the two countries: http://www.fermentarium.com/industry/beer-industry/canadian-beer-vs-american-beer-the-alcohol-content-battle/. I looked for evidence of American v. Canadian beer taste tests, but couldn't find a lot. I'd be interested in seeing some of these triangle tests you mention.

But if you take the position ""Macro" beers seem to compete more on brand identity than anything else" you need to explain what it is about the market structure that makes firms engage in brand identity competition, rather than price or quality competition. On the argument that cultural context matters more than, e.g., price - I'm not convinced.

Tom Brown "If one brand is a nickle cheaper per six pack, I'll question whether I can really tell the difference, and pick the cheaper one every time."

Interesting - if lots of beer drinkers reason the way you do, there may be good reasons for brewers to compete on readily observable characteristics of beer, i.e.. price, rather than characteristics that can't be observed until the beer is bought and opened, i.e. quality.

Lord "favored economies of scale profit seeking and least common denominator beer"

Not obvious to me why economies of scale should lead to poor quality beer, as opposed to beer that most people like, or a good quality beer at a reasonable price. And that the economies of scale should favour mass production of a small number of beer varieties, as opposed to say the breakfast cereal market, where a small number of dominant players produce huge numbers of different cereals.

Or are we a bunch of beer snobs here, deploring the plebeian tastes Bud and Coors drinkers, and turning up our noses at anything with an IBU less than 60?

Jacque Rene -

;-)

[Determinant]

There was a fascinating story of how the standard American beer actually came to pass, though I don't have the link to hand. The end of Prohibition led to a wave of consolidation and takeovers. Brewers came to favour "adjuncts" like rice and wheat instead of straight barley, plus there was the general takeover of German tastes in beer in the US starting in the 1870's. The Coors, Millers and Bud's of this world are all American Pilsner Lagers brewed with a significant amount of adjuncts (not in itself a bad thing) and standardized for large-scale industrial production. This placed a heavy premium on standardization, which runs directly counter to the diverse tastes of individuals. Like me, who prefers ales and porters and dark-roasted coffee too.

What the craft beer movement did do, and did quite successfully, was reintroduce an entrepreneurial culture to North American brewing and broaden consumers tastes. It also provided an outlet for lesser-known styles with less followers, and as the big brewers themselves will admit, it provided them with free market research of a kind they could not duplicate easily. Hence why even the big boys have been broadening their lineups in the last 15 years.

[whitfit]

I am not sure about the reasons for people liking different "macro" brews. I am a craft or micro guy myself. I don't really have a preference for what other people drink or like, and don't need to put it down to enjoy what I like.

However, I would say that it is clear that the US us far ahead of Canada for craft beer. I think it is largely because of the closed market in Canada. The thing I find frustrating about the Ontario political approach to beer regulation is that it primarily values price and availability. Having a heterogeneous marketplace with options for those without mainstream preferences is ignored.

Almost makes me want to become a libertarian ;)

[Jacques René Giguère]

Whitfit: try the Québec beer market! Almost as good as some U.S. states.

[Frances Woolley]

Jacques Rene - interestingly, Quebec beers were the only Canadian microbrews I saw for sale in the liquor stores in my recent trip to upstate New York - now possibly these were just being marketed towards Canadian x-border shoppers, but they are excellent brews.

whitfit - however see this response to my post by my American colleague Steve Saideman here, who points out that Pennsylvania also has strange beer distribution regulations, and argues that Canada/US beer is mostly a matter of apples v. apples.

Determinant - Interesting. I wonder if this has something to do with the relative price/availability of rice/wheat/barley in US/Canada/Europe.

[Determinant]

I would say so, as brewers have always been conscious of price.

American and Canadian brewers turned to lager rather than ale, especially "real ale" with live yeast because it is plain out easier to ship, especially by rail. Wellington Brewery in Guelph is one of the few that make English-style real ale in North America.

The trend in a devastated market post-prohibition on both sides of the border was for consolidation (see E.P. Taylor in Canada, and Bud in the US). It was the Henry Ford era of beer: you could have any beer you wanted, so long as it was an American Pilsner.

The inevitable consumer reaction to this was the craft beer movement. It took a few decades though.

Er, and the brewers in the US are also unionized.

[Frances Woolley]

Determinant: "Er, and the brewers in the US are also unionized."

Agreed - US unions are weaker now due to having fewer protections under labour law, but during the height of the bad US beer era it's not obvious that US unions were any weaker than canadian ones.

The tax argument still goes through, and all one needs is some difference in costs that works on a per bottle basis to get manufacturers trying to put more quality into each bottle.

[Jim Rootham]

My recollection of the arrival of craft beers in Ontario was that is was triggered by changes in regulations. One particular one was the prohibition on serving beer in the brewery (ie no brewpubs). Being a Morris dancer beer snobbery is a way of life. Once upon a time this meant drinking Bass. There were no local brews. Given the abrupt arrival I'm pretty sure that regulation change was the trigger.

The Canadian market always included products that called themselves ales. The American market always had small breweries (or at least had them before Ontario did).

[Jack Grahl]

The problem with this argument is that it is perfectly possible to produce decent quality beers for a very low price. The cheapest lagers in Germany are extremely cheap, with the per-volume price of single bottles similar to that of the lowest quality beer in the USA when bought in bulk, however they are made to a very high standard and in compliance with the Beer Purity Law which prohibits additives. There is a similar situation in the Czech republic where some of the finest mass-produced beers in the world are solf for a very low price.

Australia does not have cheap beer due to high levels of taxation and minimum pricing. However the price before tax of very good quality beer is very low, and there is a tiny difference between the price of decent and low-quality beers when bought by the case.

[Oliver]

Tom Brown:
If one brand is a nickle cheaper per six pack, I'll question whether I can really tell the difference, and pick the cheaper one every time.

As your run of the mill continental European snob, I would say that confirms our prejudices against those uncultured, bargain hunting Americans. I say the snob effect is generally stronger and a feeling of cultural superiority wrt to beer quality is more prevalent in traditional beer brewing countries such as Germany or Britain.

As a consequence, the market for bargain brews is smaller as a proportion of the whole beer market than in the US. That doesn't mean American beers are worse, of course. The USP is just more likely to be price than quality. I bet the proportion of bottled beers vs. canned beers is also higher here than in the US. The English buy beer in crates, Germans in Kasten whereas Americans buy 6-packs.

[Jacques René Giguère]

Though can have a cheap image, they are superior to bottles as a mean of preservation. In Québec, craft brewers are fast moving toward can. Two new canning lines have recently opened.

[Peter Dorman]

This is a fascinating thread. I have a few thoughts that don't add up to any overall position on beer quality inequality vs income inequality. (1) Growing up in Wisconsin in the 60s and 70s, I was surrounded by small breweries like Point, Leinenkugel and Huber. For the most part their beer was only marginally better than the macros, although the seasonal availability of Huber bock was a big event: cheap but with flavor. (2) Beer seemed to serve the role of soda for grownups. It was drunk in large sloshes. It was advertised for its thirst-quenching qualities. (3) The story of Yuengling, an old brewery in rural PA, might be pertinent. It began in the 19th c. catering to the German taste, went watery in the 20th c. and returned to a traditional and more robust formula in, I think, the 1980s, becoming a cult favorite. (4) I am writing this from Germany where mass market beers very somewhat in quality, but very cheap ones (e.g. Jever) can be pretty good. (5) I think there has been a general shift toward quality in a number of consumer domains across the advanced economies since the 1980s. Many people could afford quality before then, but the demand was lacking. A cultivated appreciation for quality was seen as elite or even effete. Now marketing on the basis of quality and distinctiveness has trickled down in many markets: coffee and tea, fabrics, consumer electronics (the Apple fetish). There has been a sea change in consumer culture. How can this be explained?

[David C]

I've enjoyed plenty of Molson's and LaBatt's, but don't frankly see them as higher quality than the better mainstream American beers like Budweiser or Miller Genuine Draft. There is certainly a sea of watery swill sold here, Coors, Miller Lite, and so forth. But the people who drink those seem to really prefer the lighter flavor and lower alcohol content.

I lived for many years in the hometown of one of the earliest and most successful of the microbreweries, Bell's Beer in Kalamazoo. He found an audience of people who enjoy nuance, and for whom beer drinking is more than quenching thirst or getting a buzz on.

[Don A in Pennsyltucky]

It's not so much that the big breweries can't make good beer as that they won't. At least not until the little guys start cutting into their market so that Anheuser-Busch is now promoting a clone of Sam Adams. Sam Adams has itself become mainstream enough to compete for shelf space with more varieties of their brand.

[marcel proust]

What is of greater interest to a quasi-Marxian analysis of beer is first, does there exist a trans-national correlation in income distribution and the watering of beer? And further, how does this relate to control of the factors of production:

https://www.youtube.com/watch?v=b1TY0XSyDVg

[whitfit]

Oliver says: "As your run of the mill continental European snob, I would say that confirms our prejudices against those uncultured, bargain hunting Americans. I say the snob effect is generally stronger and a feeling of cultural superiority wrt to beer quality is more prevalent in traditional beer brewing countries such as Germany or Britain."

This is a line that can only be written by someone who is not a true beer snob. American craft breweries wipe the floor of the Germans and continental Europeans in beer quality. Sure, the German macro stuff is better than the American macros, but for pure snobbery, I would argue that the high end of the market is more important. German and Czech style beer is decent, but the style they pursue is pretty narrow, and not very interesting. And the rest of the Continent is a wasteland of bad beer. It is close to impossible to find decent beer in France and Italy, for instance. I just drink wine when I am there - sometimes life is hard ;)

[Narwhal]

Any discussion of Quality versus price also include an analysis of AB-InBev's dominance of the beer market a 25% share worldiwide. AB-InBEv laps up another craft brewer each week....

Country Market Share Country Market Share
USA 49.9% Luxemburg 48.5%
Mexico (Modelo) 55% The Netherlands 15.7%
Canada 42.9% UK 21.8%
Cuba 45.1% Germany 9.6%
Brazil 67.5% Italy 7.8%
Venezuela 4.1% Bulgaria 26.6%
Peru 10% Croatia 39.7%
Ecuador 8.9% Czech Republic 15.6%
Dominican Republic 11.3% Hungary 25.1%
Guatemala 15.7% Serbia 54.3%
Argentina 74.4% Montenegro 92.3%
Paraguay 93.1% Romania 19.2%
Bolivia 97.1% Russia 18.4%
Chile 13.3% Ukraine 37.5%
Uruguay 97.1% China 15.4%
Belgium 57.7% South Korea 41.1%
France 9.7%

[Jon]

Beer is a creature of regulation in the US. When prohibition was repealed, it was done in a funny way which ceded control of alcohol regulations to the states (no federal supremacy).

Consequently it remains nearly impossible to ship (let alone sell) beer across statelines. The major brewers workaround this by having uniform plants distributed across the US combined with some expensive legal foot work for distribution across state lines where there are bilateral agreements. To do this they need a low alcohol watered down product (lowest common denominator across all states).

Thus in the past favorful products were imported. So what is craft brew? It is a choice to forgo national distribution in favor of taste.

Why is the craft brew revolution only in the past twenty years? Gradual deregulation of alchol sales at the state level that enabled small breweries easier access to bars and direct sales.

[Oliver]

It is close to impossible to find decent beer in France and Italy, for instance. I just drink wine when I am there - sometimes life is hard ;)

France and Italy are not beer nations, they are the two of the largest wine producers... And I was only referring to the snob effect, not actual beer quality. I.e. charging more for fancy packaging, bottles and the like.

A person may reasonably claim to purchase a designer garment because of a certain threading technique, longevity, and fabric. While this is true in some cases, the desired effect can often be achieved by purchasing a less-expensive version from a reputable brand. Often these high-end items end up as closeout items in discount stores or online retailers where they may be offered at deep discounts from original price, bringing into question the true value of the product. Ultimately, wealthy consumers can be lured by superficial factors such as rarity, celebrity representation and brand prestige.

But you're right, I'm more of a wine guy. A real snob. Or, as I read the other day: what makes having children so expensive is all the red wine one has to drink. Blame it on the kids. :-)

[Donald]

I think this has a lot to do with taste.

I think this has a lot to do with taste.

Take British versus European food as an example. Food tends to be better in Europe, particularly at the cheaper end of the market. This is, I think, mainly because that's what people demand in Europe - they won't buy crap food.

I suspect there's something similar going on with beer. A great example is a well pulled pint of lager. This should have a decent sized head on it - at least a finger and a half. But in the UK lots of people see this as not getting their full pint and prefer a flatter but fuller pint.

Of course, taste comes from somewhere and may well be influenced by inequality, taxes and regulations. For example, weights and measures laws are strict in the UK. And vice versa - taste can influence tax and regulation policy.

[whitfit]

Oliver - I understand about children and wine - or beer... And I meant to say in the earlier post, the UK does have a well developed beer market (mostly in ale) and it is nice to travel there and sample the different offerings. There are a lot of gastro pubs where you can get good ale and food.

One issue that affects the beer market is that it is really a local market. Beer doesn't travel well, until you get into the higher alcohol stuff, and that is a specialized market.

I saw that Steve Saideman post that Frances linked to, and I mostly agree with it - but, would argue that on the micro end of the beer market the US market is significantly deeper, especially where it is less regulated. I have been in convenience stores in Rochester with better craft beer selection than most Beer Stores in Toronto. The Northeast US market, the Northwest US market and the Midwest US market each have deep and varied beer selections. There are some great breweries in Ontario and Toronto, but I think we would have a bunch more selection and players in the micro market if the beer regulation was opened up a bit. Because it doesn't keep or travel well, the beer market is not the same as the wine market. You need a developed local market to get a good amount of variety. Trappist beers and Russian Imperial Stouts are two beers that travel well, and are more widely available (also some of the Quebec beers go in this direction), but for beers around 5% or below this doesn't work as well.

I think that it is unfortunate that by catering to the macro market in regulation and market structure that the craft/micro market has been significantly constrained.

I wonder if there would be more variety and better craft beer in Germany if they lightened up their regulation?

[Jason Smith]

One possible exogenous factor is that the US is a bit warmer on average than Canada or Europe. Having lived in a hot climate (Texas), I can say the idea of a stronger, less watery beer is not as appetizing on a warm day. Moving to Seattle, my beer taste has migrated to darker and more European styles -- cold weather beer.

Also, most hot climates I've been to (e.g. Central America), the local beers are of the lighter, more watery type.

[Oliver]

I wonder if there would be more variety and better craft beer in Germany if they lightened up their regulation?

I just had a beer from the local state brewery of Baden (Schäuble country) to test that hypothesis. Tannenzäpfle it's called. Great stuff, I can recommend it.

I can imagine the lack of variety has more to do with a sense of tradition than over-regulation. Although I do admit I have no idea what German beer regulation looks like. I for one am quite happy with just normal beer and absolutely hate frilly beers. If I want frills I'll have cocktails, thank you very much.

[Erik Lund]

Put yourself in the place of a logger, forty years ago, turned out of the crummy at Jeune Landing at 4PM on a hot Friday afternoon in July. There's a big pay packet waiting for him, and he could just barely make it down to Nanaimo for the weekend, but, truth is, he's better off not even trying to do that. It's not worth the wear on truck nor man, and in the long run he wants to save most of that pay packet, if, in twenty years, he wants to be an independent contractor with a backhoe and a nice house with Lorraine and the kids in the suburbs of Campbell River. He may not have that goal consciously --may not even be able to conceive of it in concrete terms, but--

So what does he do? Well, he's got a log in his stomach where his appetite should be. That's because he's dehydrated, and all the water he's drunk is just sitting there. His electrolytes are too low for his cells to pass fluid. He doesn't know that, though. What he knows is that it's now socially expected that he have a beer with his buds. At the Legion, the pints come round. Tall frosties of Canadian. He imitates the older men, giving the head a vigorous shake of salt. Bland, inoffensive beer (salted!) goes down his throat. Gradually, as his body rehydrates, a pleasant buzz comes over him. He's ready for the cookhouse, for a mellow evening playing cards with the lads.

By Saturday morning, the temptations of Nanaimo will be out of reach. He'll be in for a boring weekend, drinking with the guys, but his Friday night will pay it forward when the woods are shut down by snow in December, and he meets Lorraine in Vancouver and impresses her as a big spender.

The wet bar in his house will have Canadian on tap, thank you very much.

[genauer]

just some facts:

1. the German purity law from 1516 was overturned in 1993 by the European Union (EU) and since them you can buy all kinds of beer and ale in Germany. My beer shop around the corner, in walking distance, has more than 1000 different type in stock, as single bottle or bulk quantities. You need 5 crates of special Bamberg Schlenkerla smoke beer? Just walk over the street. Do I really need that? No, Only if a friend 700 kilometers away needs to be treated to a special birthday gift.

Fresh Czech, Irish, Belgian, Mexican beer on tap, no problem.

2. In former times cheap was equal to watery / low alcohol, bad taste. Now at least the cheap = low alcohol is not so anymore.

3. You can buy cheap beer in Germany , 29 cents for half a liter, around the corner, in LIDL and Aldi.

[genauer]

some more facts from a real beer town guy:

1. The transition from wine to beer in Germany was not voluntary
Colder climate, specific diseases, and the horrible https://en.wikipedia.org/wiki/St._Mary_Magdalene%27s_flood , combined with the Black Death ravaged the wine areas in western franconia (350 square kilometers, which were capable to produce 100-150 liter wine per capita and anno for our sober and god fearing anchestors : - ) http://www.vitipendium.de/Geschichte_des_Weinbaus

2. The bavarian beer purity law (https://de.wikipedia.org/wiki/Reinheitsgebot) was not so much against other sources of carbohydrates / sugar, like rice, then non-available potatoes, but against adding uncontrollable psychactive substances (Pilz = mushroom, BILSenkraut)
The law also had important price controls.

3. Bavaria was not the first with the civilizational ascendance to strict food and beverage quality controls
The 1800 BC https://en.wikipedia.org/wiki/Code_of_Hammurabi in the fertile crescent Babylon has lengthy regulations on it, according to cite 9 of above wiki.

[Wings Over Leafs]

Interesting analysis, you may also find the following video instructive. Like your piece, it puts the alcohol content of beer in a broad social context.

https://www.youtube.com/watch?v=2E064kb3UnU

[Lord]

Marketers followed a belief in a one dimensional scale to quantity/quality in search of the largest/best beer, where largest and best were considered synonymous and largely worked at copying each others most successful product. Only later research showed people differed in their preferences and one size fits all mass market is a poor approach to tastes in general.

[Frances Woolley]

Oliver: " I bet the proportion of bottled beers vs. canned beers is also higher here than in the US."

In my experience the proportion of bottled beers in Canada is quite a bit higher than in Britain, and my guess is that the same would be true of the US. One of the big differences in the way that Brits drink beer, as opposed to North Americans, is that Brits are much more likely to pour the beer into a glass, partly because the British taste in beer isn't so much for fizzy lagery drinks, partly because - due to the younger drinking age - formative British drinking experiences tend to be pints in pubs, where beer is drunk from a glass mostly, rather than drinking beer directly from the can/crate in someone's basement/in a car/by the lake. If you're drinking from a glass, it doesn't really matter so much whether the beer comes in a can or a bottle. But if you're drinking directly from the can/bottle, bottles are far superior to cans.

Donald: "Of course, taste comes from somewhere and may well be influenced by inequality, taxes and regulations."

Yes. An explanation that endogenizes tastes, e.g.the idea that the market power enjoyed by the few surviving breweries in the post-prohibition era allowed US brewers to use cheaper rice/wheat instead of barley (lack of competition, consumers eager for beer of any kind) and this led to US consumers to become accustomed to this taste, is a better explanation than "that's just what Americans like".

Erik - thanks for painting that picture.

genauer - but wasn't a new regulatory regime enacted called Vorläufiges Biergesetz (Provisional Beer Law) which complied with EU law but still restricted what could be put in beer? I couldn't find much in English about the provisional beer law, and don't even know if it's still enforced.

[Frances Woolley]

Jason - "the US is a bit warmer on average than Canada or Europe" - yes, that probably matters, both on the demand and the supply side - i.e. influencing the relative price of barley, which tends to grow relatively well in northern climates, versus corn and rice, the most popular "adjuncts" added to beer in the US (see http://www.beeradvocate.com/beer/101/malts/) That weak/watery taste that people object to in US beer isn't so much a reflection of lower alcohol content - the idea that US beer is less alcoholic actually seems to be a myth - US beers have that distinctive US-beer taste because of the corn/rice etc. At least as far as I can gather.

[Frances Woolley]

whitfit: "One issue that affects the beer market is that it is really a local market. Beer doesn't travel well, until you get into the higher alcohol stuff, and that is a specialized market."

Yes, I'm starting to wonder if the beer quality inequality - income inequality connection, to the extent any exists, isn't a product of de-regulation during the 1990s, which allowed craft beers to flourish, and income inequality to grow. Or perhaps changes in supply chain/distribution systems resulting from technological changes, which allowed craft beers to flourish, and income inequality to grow.

[Bob Smith]

Frances, well, on your observation on the relative price of barley, could the advent of free trade have changed the relative price of barley/corn between hot and cold countries? (i.e., if Canada has cheap barley beause we're cold, and the US has corn and rice because they're hot, the advent of free trade should see some convergence between the relative price of the two commodities). That would tie in nicely with your inequality story.

[Frances Woolley]

Bob, yes, you're right!

[Johnny Johnson]

I'm actually kind of a beer snob relative to those who I like down upon: I'm and aficionado of sours.

[Oliver]

@ Frances

You're probably right on the can vs. bottle thing. I was picturing Germany as I experienced it when I was younger. Lots of local independent breweries and reusable bottles with a deposit. Not only for beer. But that doesn't extrapolate well to corner shops and pubs, nor probably to present day Germany. Heineken / Annheiser wasteland, most probably.

[genauer]

@ Frances

The “purity law” is history. EU regulations prohibited it. And it does not matter. Even the cheapest beer in town (27 cent for half a liter, in a plastic bottle, at LIDL) can be brewed according to it. They display it on the label “Gebraut nach dem deutschen Reinheitsgebot”, and that’s it. (All facts checked personally in the last 48 hours)

Your NewYorker link is nonsense, unusually very bad for the NewYorker.

Your McGrath link, describing Germany as a “corporatist welfare state”, is just plain nationalist stereotyping, with things which were not even true 30 years ago. Mass layoffs of inefficient corporate divisions are happening all the time, former corporation related social service have long been externalized. As a former Siemens employee, working at IBM in the past, with access to some of the upper 200 in a global 400 000 employee corporation, I know and understand some details and long term strategy.
I could tell you a lot about how US IBM and German Siemens got rid of their “high tech”, but notorious loss making semiconductor units, in somewhat specific environments, but neither “corporate welfare”.

Your Wharton piece is just plain nonsense

(3 to 5 dominating , subsidies for cash cows like breweries, bizarre thinking, on which a native German like me just stares with plain incredulity, , “cottage industry”, “to continue to exclude foreign players”, plain nationalist nonsense, shameless lies)

In what Marxist parallel universe do these writers live ?

[Jim Sentance]

A few observations on Canada-US differences, having been reading a good bit on beer recently.

Someone mentioned difficulties in moving beer across state lines - for the large national brewers I don't see anything in what I've read indicating this is an issue. None of them have breweries in every state, in fact I think Coors may only have three. Transport costs are a bigger factor. Craft brewing is a different matter. Canada on the other hand has until recently had very restrictive provincial barriers, requiring breweries in almost every province, not to mention the restrictive practices of government distribution. This has probably prevented Canadian brewers from achieving the type of economies of scale that have led to such a concentrated market in the US. And made it difficult for craft brewing as well.

There were also big differences in the use of antitrust/competition policy in the two countries. Us federal authorities have been very restrictive in merger cases involving the larger brewers - basically forcing them to expand by increasing capacity, not takeovers. Canadian experience I think is much different, with the big brewers picking off smaller regional brewers in the early post-war era.

And to your list of things like inequality, weather and so on, you might add race and ethnicity. The US for example has a much larger presence of German ancestry than Canada, not to mention of course African-Americans and Hispanics.

[Jim Rootham]

In Ontario at least beer distribution is not government but monopoly. That is almost certainly worse for the craft brewers.