Is The Price Of Beer Right?

To: The New Zealand Herald

Dear Editor

I wasn’t going to respond to Don Kavanagh’s article “Cheers: Don’t price out beer” but thought it needed a response since you deemed it was important enough to be printed in the nations largest newspaper.

Coming from your “expert” writer on the subject, the article comes across as naive, uninformed and un-researched. It is more of a light weight, personal complaint about having to pay for quality crafted beer in the pub. Not exactly a fun read.

“Frankly I think the price of a beer is shocking ..” 

“Shocking” doesn’t that imply some kind of surprise? The price of beer (and alcohol) has been on a gradual rise forever. I don’t recall in the recent past when the price of a pint made any radical jump. So where is the shock?

The article complains about the price of beer. Makes random comparisons by country, but makes no reference to the different excise rates of each country that he is comparing the pricing to. Higher excise will equal higher price.

If the author thinks the price of beer here is high, he is going to get a huge shock if he ever makes it to Australia where the prices are way higher. That is because the excise tax on alcohol is a lot high than in New Zealand.

The article doesn’t consider the costs associated with running a bar compared to a supermarket. Bars have staff to serve you a selection of beverages, in an environment which is clean, dry, warm and comfortable. The staff take away your empty glasses, and clean them, as well as clean the bar at the end of the evening when you walk out and go home.

“After all, the price of a single “craft” beer (whether from a craft brewery or a major one) will set you back more than a perfectly adequate bottle of wine from the supermarket.”

Most craft beer drinkers I know drink beer for the taste of it. Higher price does equal less quantity drunk, but drinking for the taste can be as pleasurable, if not more, then just drinking to get drunk on the cheapest beer available.

Price is generally more due to the cost of making it being higher for a small producer.

It would seem the author would rather sit home with a bottle of supermarket wine, than explore the exciting range of craft beers made by the small craft breweries in this country. These small businesses are battling against the odds to make a living. Each have an exciting unique story to tell. Stories that your readers may actually be excited to read about. More excited than hearing that they pay too much for a beer here in New Zealand vs an airport bar in Frankfurt. (even though the beers are taxed at different rates and it is going to cost them $2000 to get to Frankfurt to drink that beer that is a few dollars cheaper, but not as tasty.)

“It’s either the retailer or the manufacturer who has to do something…”

I’m not sure if your author saw Stu McKinlay’s great article on the break down of the cost of beer, but incase he didn’t here is a link. What’s in my beer? Hopefully this gives him a better understanding of the breakdown of the costs of a pint, and will give him an appreciation of how much a craft brewer is actually making from a pint. Brewers make beer not money.

Overall the article seemed out of touch with where the market is at. Craft beer is booming, there are new breweries opening every month in this country. That says to me that the demand for these “seriously expensive” beers, continues to grow, as does the number of bars stocking them. This is a time where the pub has a new lease of life. A time where people are returning to the pub. They are paying more for a good beer. And you know what, they are sitting in the pub and they are talking about the beer they are drinking.

Regards

Luke Nicholas

P.S. could you please ask Don to write cool articles about craft beer, as I find them more interesting. I want the people of Auckland to be able to read great articles like the rest of the country gets to read about craft beer.

P.P.S Here is an article about why craft beer cost more Selling Craft Beers: 5 Tips for Countering Customers’ Price Ale-ments

UPDATE 2/5/14 – Follow up article – Price row a matter of perception by Geoff Griggs

Kavanagh’s column ends with the warning that “if the pub culture dies, we’ll all be the poorer”.

But in a blog rebuffing those fears, Auckland-based Epic Brewing Company owner Luke Nicholas is far more upbeat: “Craft beer is booming, there are new breweries opening every month in this country. That says to me that the demand for these ‘seriously expensive’ beers continues to grow, as does the number of bars stocking them.”

In his rebuttal entitled “Is the price of beer right?” Nicholas argues “this is a time where the pub has a new lease of life”.

“A time where people are returning to the pub. They are paying more for a good beer. And you know what, they are sitting in the pub and they are talking about the beer they are drinking.”

I’ll raise a glass to that.