The rise of beeronomics(3)
SWINNEN: It was much easier to enforce taxes on larger breweries than small. So for a long time, government was stimulating concentration in the brewery sector. Later, they became much more concerned with the fact that too much concentration would raise prices. With this antimonopoly idea, they tried to control concentration. In a chapter by Kenneth Elzinga, he argues that the vision of the US Supreme Court on that has changed. There have been really big mergers in the past decade that would have not been allowed 20 years ago or so.
IDEAS: How important is the microbrew movement?
SWINNEN: In terms of growth rate, it’s the fastest-growing segment of the beer market. It’s a bit paradoxical that it started in the US, as the type of beers they’re selling are more European-like or Belgian-like. In the US, there has been very strong consolidation of the traditional beer sector. Basically, you can see the microbrew movement as a counterrevolution against extreme consolidation, against the homogenization of beer. There were just a few breweries left, just producing lager beer. A lot of people who enjoyed more variety in beer couldn’t find anything. So people started their own breweries. It has been a tremendous success.
IDEAS: For a while there, it seemed as though Americans simply loved light beer. Why did all this consolidation and homogenization happen if there was a market or a taste for other styles?
SWINNEN: There is a fantastic chapter in the book by Lisa George, a professor. She argues that there are a number of different reasons. Really important was advertising. It became crucial after the breakthrough of TV. After the 1950s, you could have big companies advertising through the nation. There was the breakthrough of Budweiser and Miller Lite and whatever. Advertising spread the domination of a couple of big companies in the ’60s and ’70s. In Europe, this occurred 30 years later, because commercial TV only came to Europe in the ’90s. Before, it was state-organized broadcasting, and there was no advertising. Since the ’90s and 2000s, Europe has seen exactly the same phenomenon.
IDEAS: So television killed local beer, or tried to.
SWINNEN: There was also new science and technological innovation in the 18th century. Before, you had beer that was brewed locally, on a small scale. Most of the beer that was brewed was what we now call “specialty beer.” Then people discovered how yeast really worked. When you could control the yeast and the brewing process, you could brew really crystal-clear beer. And you could produce good bottles and ways of cooling better and putting tops on bottles, which made it possible to produce beer on an industrial scale.
