Thursday, February 25, 2010

Beer: A Lesson in Economics

Posted By on Thu, Feb 25, 2010 at 5:00 AM

Is it possible that the Canadian fuzz are part of a plot to help keep breweries afloat in these tough economic times?

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While skimming the Wall Street Journal this morning, I noticed an item suggesting that beer brewers worldwide are experiencing a slump in sales, and they predict this trend will continue. Said Heineken, "The global economic environment will continue to lead to lower beer consumption," particularly in the United States and Europe.

Seriously?

I've always thought that the alcoholic beverage industry was well-insulated from economic downturns. People drink celebratory toasts when life is good, and they drown their sorrows when challenged by tough times. Furthermore, beer is extremely inexpensive to produce. I confirmed this fact today with a phone call to my friends Kevin and Jake, brewers at The Ram in Boise. According to Jake, "The true cost of beer is about 10 cents on the pint, maybe even less than that."

So hearing that brewers plan to limit price increases this year and cut costs in a bid to maintain profits makes me wonder why the oil companies (who seem to have no problem maintaining profits) don't take similar action.

Oil_Prof_Charts.pdf

Meanwhile, less than 10 pages away, a related story in the WSJ caught my eye. Apparently the officers of the Vancouver Police Department are too busy monitoring public drunkenness to watch theOlympics. In less than a week, they've asked revelers to pour out approximately 3,700 alcoholic drinks ... this works out to almost 350 gallons, which is almost enough to fill my hot tub.

Regardless of how it all turns out, my husband and I will continue to do our part to make sure the beer industry thrives.

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