Wednesday, February 22, 2012

The Ethics of Craft Beer

Socrates enjoys a glass of CBS while contemplating the
ethics of aftermarket beer sales.
When I first began my exploration into the craft beer realm, I had no idea what I was getting myself into. No, I'm not referring to the vast number of breweries, beer styles and varieties that are at a drinker's disposal, but instead the amount of ethical discussions and disagreements that take place in craft beer communities. Basically, I would never have guessed that craft beer was such a breeding ground for debates on moral relativism and what is right and wrong in terms of craft beer economics and business practices. 'Beer karma' is a phrase that seems to get thrown out more and more often, and it gets someone such as myself thinking about what really is right, what's wrong, and what we are supposed to do when there are no helpful laws in place to regulate issues that frustrate better beer consumers so often.

Of course we all are aware of one of the biggest problems in craft beer, which is the constant battle against macro brands for shelf space, tap space and market share. The film Beer Wars gave us an in-depth glimpse into these issues, but occasionally we still get harsh reminders of how our respective craft beer 'Davids' are constantly battling the macro 'Goliaths'. Most recently, a news story hit where a Flying Dog rep in Washington D.C. alleged that MillerCoors had paid a bar to remove a Flying Dog draft line and replace it with a MillerCoors brand. While the claim was later redacted, stories like this still bring to light major issues that smaller breweries across the nation face constantly. Similarly, we as consumers face ethical issues when it comes to purchasing and accessing the products we want.

With the recent fiascos induced locally by the Chocolate Ale and Hopslam releases, it only seemed appropriate to touch on these issues since they're already being discussed via social media outlets. I've seen many frustrations expressed recently with various retailers' business practices when it comes to limited releases. Price gouging is consistently at the top of the list of retailer complaints. As a recent example, Beer Cave in Lenexa shamelessly priced their Chocolate Ale bottles at $25 each. Of course, they didn't feel guilty about it or issue an apology until AFTER all the bottles had sold, but they tried to deflect blame on Boulevard for not allotting enough to Kansas City. Strange, since other stores in the metro didn't seem to have a problem charging MSRP or at least close to it. Of course, the fact still remains that Beer Cave still sold all of their bottles, so to them it's not a problem, and I'm sure they'll practice the same habits for other limited releases simply because THEY CAN. The demand is there, the money gets thrown down on the counter, so what do they care? Just like Mike's Liquor can break open their Hopslam six packs and sell them in chunks of 3 for $10 each and when customers question the practice, answer rudely with responses like "Well you don't have to buy it, do ya?". There's either no law regulating these types of activities, or if there are, some retailers do everything they can to ride that thin line as closely as possible to what's legal and what's illegal. When the rules are so flexible, some people will always take the chance to bend them.

Then again, we speak of retailers and express anger for their less-than-ethical actions when it comes to the sale of limited release or high demand items. But we as consumers take part in actions that raise eyebrows as well. How many times has a special release ended up on Craigslist or Ebay within hours of it hitting store shelves? At first glance, this black market-style activity seems like a close cousin of a retailer gouging prices, but also comes with it's own blurry line of ethical behavior. I'll admit, I was on a flagging frenzy when Chocolate Ale bottles were hitting Craigslist and being sold for $50, $60, even $75 a bottle. To me, that is absolutely ridiculous. But what about Ebay? Does it make it more acceptable because people are given the opportunity to bid and decide how much they are willing to spend? Where does consumer-generated aftermarket activity of craft beer fall in the 'right vs. wrong' gray area? Are Craigslist and Ebay sales just a monetized extension of bottle trading, which is a fairly well-accepted practice in the community? And besides us as drinkers, how do breweries feel about people turning a profit on their work? I would imagine, that as a whole, they aren't especially fond of it, but that's just my assumption.

The answer might seem to lie in a need to have specific laws regulating the above actions, but then again, our cry as craft beer drinkers tends to call for LESS government regulation than more. As evidenced by our lovely Kansas liquor store laws, an overabundance of regulation is not always (read: pretty much never) a good thing. But, on the same note, shouldn't we as consumers be a little more protected? Is the only viable response that we are able to offer a verbal protest, by either raising these issues to actual employees or using the Internet as a sounding board? I'm not going to pretend I have an answer, because I don't. It's a daunting task trying to wrap one's head around all the issues that lie within the regulation of alcohol sales while also factoring in my own selfish desires as a craft beer drinker.

Whether these issues of beer ethics will ever be solved is doubtful, in my opinion. And while there are certainly problems that seem to consistently arise in the craft beer community, there are always two sides to every story. Where one person may see price gouging, another person sees a business doing what they are legally entitled to in order to make money. What one person sees as shady aftermarket activity, another sees as a legitimate way for a regular person to make money, just like selling another piece of their property. If there's one thing we are as craft beer drinkers, it's opinionated, but those opinions don't always align.

Certainly when I purchased my first mix-a-six pack at the liquor store and slowly inching my way into craft beer, I never predicted I'd encounter these types of craft beer-related debates and the passionate, angry, dissenting opinions that they fuel. But they're there, so they are worth talking about.

Sound Off: What are your thoughts on some of the issues mentioned above? Are there other problems that you feel need to be recognized or discussed?

34 comments:

  1. I think people have a right to drive from store to store hoarding beer, and I have the right to think they're selfish a-holes. Legalities aside, I don't care if people pay $50+ for a bottle of beer on the secondary market, because I have the right to call them morons. Stores can limit quantities or not, gouge or not, be a-holes or not...just as I have the right to stop patronizing stores who do things I don't like.

    Missie's was charging $15 or $16 for BBQ. I can afford the extra $4-5, but shouldn't have to. I stopped shopping there on principle and bought from another local liquor instead. And I'll never shop at Beer Cave. Not that it was one of my regular haunts, but I'd be willing to bet they'll lose more in future business than the extra few hundred dollars they made that day.

    In other words, the market works even when we don't like the results. It might be disappointing when we don't land something rare. but IT'S JUST BEER. Try to consciously fight your inner hunter/gatherer/must-chase-and-hoard instinct, and ignore the fact that it's scarce. OR, embrace the chase, get your rush, and understand you can't win every time. Most of all, recognize that we have more beers than ever available right now, some of which we are ignoring because we can get them anytime.

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  2. Looks like the market will handle the exorbitant pricing. Who are you to flag a price on Craigs List, just because you think it is wrong. You simply made it harder and drove the price up higher. Congrats on that, not the intent you probably had, but that is the effect you had. The store can charge whatever they want. I can go somewhere else, or choose to buy it. We vote with our wallets. The argument that is being made, which I don't think you are intending is that Boulevard should quadruple the recommended price.

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  3. Actually, alcohol is a prohibited item on Craigslist, so it's totally logical and appropriate to flag it. The exorbitant, gouging, selfish prices just made it that much easier.

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  4. This idea that you're entitled or have a right to buy a beer at a certain price is crazy. Just thinking you need "protection" from a beer price is childish, let alone thinking the state can give you such protection.

    We have 2 ways to deal with scarcity, limits or prices. If something's important to you you will pay the price or go to several stores to get your stash. If you don't like a store because they "gouge" don't go there, don't bring the motherfuckers from the ABC into the deal.

    That being said, you should avoid being a beer asshole and hoarding stuff just because you can and being a jerk to liquor store employees and all of the other bad behaviors you described.

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  5. I completely agree with JJSKCK and Bull E. Vard. Placing a price ceiling on beer would not be useful. This is Econ 101 in its most basic form. Great post, though. It should generate a lot of discussion and I look forward to reading more comments. P.S. Many breweries give out their recipes. Try brewing up a batch instead of hoarding!

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  6. Nick - my response was getting too long-winded, but your point on homebrewing is spot-on. My wife and I have brewed all of 5 batches of beer, but even that limited exposure has taken a lot of the mystique out of it. I still love some of the weird stuff that makes its way into stores, but knowing I could at least attempt to replicate it reinforces the "it's just beer" mindset.

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  7. I'm throwing in with the lot of you. Was I pissed off at the jerks bragging about having a dozen bottles of Chocolate Ale, yes (I would have liked to have had a bottle this year, but I didn't want to skip out on work or drive all over town, so my choice). Do I want some action taken, no. Ideally, I want people not to be dicks, and I will spend my money at places (like Royal on 103rd) where I get treated right. The system works.

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  8. In case you care to educate yourself on the economics of scarcity and price-gouging:

    http://www.econlib.org/library/Columns/y2007/Mungergouging.html

    http://www.econtalk.org/archives/2009/10/munger_on_short.html

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  9. Thanks for the comments, all. For the record, other than loathing Craigslist Chocolate Ale scalpers, this post isn't meant to convey an opinion on my part one way or the other. Mostly interested in generating conversation.

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  10. How about trading? I would trade my bottle of Chocolate Ale for a 6 pack of Hopslam. What!?!? No takers?!?!?

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  11. If the beer release hustle is something you don't appreciate, simply shut things like this blog down. I can remember countless times I knew a beer was coming out and planning to get some on my way home, only to feel forced into running out immediately because Bull threw up a post on this site.

    You have now taken it to a whole new level with weekly features specifically pointing to upcoming events and when beers are coming to shelves or already out there. I don't write this to complain about that, but the existence of this post in the first place makes it seem like you don't realize the major role you play in the frenzy.

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  12. I don't think the bloggers Craig's List flagging was done because of illegality. More from the perspective of that price offends me and gosh darn it I'm going to flag it because of that. I think the normal method for getting around that prohibition on EBay and Craig's List is to sell the bottle not the contents.

    I'm starting to think this blog is jumping the shark with thinly veiled 'ethics' posts that are really nothing more than camouflage for unreasonable opinions. This post much like the post a week or so ago about Kansas grocery stores versus liquor stores is showing a personal bias that I don't really care for. I'm really not feeling the love for the weekly bar report either. Might I suggest more posts about particular beers and the act of drinking them or the awesome beer lineups we used to get such as comparing beers to action characters? I may be wrong but this blog is quickly dropping from my must read list to my list of things I'll read after all other options are exhausted and I'm stuck in an airport for two more hours list.

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  13. Again, this post is more of a collection of thoughts that I've seen others put out in the open on Twitter, Facebook, discussions at bars, etc. I get into the beer release frenzy as much as anyone else, and certainly realize the importance and role that this blog plays in contributing to that.

    This post isn't meant to knock the hustle (Jay-Z reference FTW), because as a whole, it's exciting and part of the draw of these limited releases. But when I see people regurgitating the same issues and complaints, to me it's worth discussing and talking about. I don't think there's anything wrong with appreciating the competitive, anticipatory aspect of it all while also airing frustrations here and there.

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  14. @Anonymous - Sorry you don't like reading the blog anymore. I am a person, so yes, I naturally have a personal bias toward things, just like you do. This is not a major media outlet, this is a local beer blog, so yeah, I will be opinionated about stuff occasionally.

    Don't worry, not all my posts will be on 'ethics'. Stick around, I'm working on a post about beers and Royals players. Or not, I guess it really just depends on how many flights you have coming up.

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  15. Beers as Royals players is a time consuming post to write. You may do better with beers as rappers.

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  16. Now THAT is a post I could destroy.

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  17. 1) I think the comment about enjoying/exploring the selection we have without worrying TOO much about the limited releases would do a lot of people wonders.

    2) Almost all of the beers that are chased/sought after (including Hopslam and blvd chocolate), are readily accessible for at least a week or two at the better beer bars in town, while the scarcity is running its course at the liquor stores. And this beer almost always tastes better.

    3) DFH = Outkast; 90 min IPA = ATLiens

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  18. I think a positive to draw from all of this negative "beer karma" surrounding special releases is the not special releases. This past year was the first year I really hunted special releases. Now that the year is closed I can say the only special release I would say was worth the trouble was Firestone Parabola (I mean it sucked don't buy it save it for me). I've been more impressed by regular releases such as Mirror Pond, New Belgium Dig, and Schlafly Export Stout. That is just to name a few from recent memory. I completely agree with the homebrew comments above, it is a very rewarding hobby. Why fight for one 750ml bottle of Super Duper Chocolate Pepper Nutmeg Dandelion Ale when you can have 5 gallons of it? Take it from Charlie, "Relax, have a homebrew". Or from FatCat, "Relax, buy something else".

    Thanks for pointing out the retail gougers, I will be sure to never visit those establishments. I was not aware they were doing that. Regardless of what Econ 101 says, it's a d*ck move. I bet they lose more money than they made on gouging. At least they won't get any from me.

    Cheers!

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  19. The economics of price gouging are fascinating. Look at Hurricane Katrina there were many people who showed up selling ice and generators at high prices where previously there wasn't the demand. So what changed? Well a hurricane and no other options to fill the demand. People needed these things and FEMA could not do it fast enough. So people stepped in to fill the void. Price gouging helped the problem by giving people what they needed long before other options were available. Just because there is a disaster doesn't mean you don't have rising costs to get the generators and ice to the people that needed them. The profit on those generators and ice were probably not as high as people thought. Look it up on Freakanomics.

    The problem with beer scarcity seems to be one of entitlement. I'm entitled to buy it at that price. I doubt this hurts very many stores. The people who rushed those stores probably were not the normal customer base. People were driving to stores that were not convenient just to get the novelty beer. Its not like you need Chocolate Ale, you just want it. It you don't want to pay for it don't.

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  20. Chocolate Ale is for the amatuear! The hype is overated. If people want to buy it up in a hour and pay high prices, let them. Coors original in the can will always be on the shelf.

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  21. I vote on implanting chips in our hands that allow us to only purchase 2 of each special release beer per month. If we try to buy a 3rd, the chip releases a symptom that gives us bad diarrhea for 48 hours. See, I solved that problem.

    I too agree to skip places that price gouge. I'll take my money elsewhere because that's my right. But regardless I enjoy the article & the discussion it has brought because it is a good topic to debate. I also love the beer release info. Not all of know what's coming out unless we work at a beer retail store & do the ordering. I'd even suggest a beer trade section on here. We don't always have the same things & some of us order out of state as well.

    Budweiser = Kid Rock (they both suck ass)

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  22. I guess I agree with the majority of people here. Let the bastards do what they want and show them how you feel about it with your wallets. I had no intention of driving out of my way to seek out Beer Cave, but after reading this post, if I happen to be driving past it I'll probably just keep driving. That said, I've been a home-brewer since 2005 and I've made some good and some bad beers. There is a very robust community who are more than happy to help you figure out how to clone a certain beer that you might not have been able to get your hands on. The best part of brewing your own though is that you can do whatever your imagination (and nerves) can come up with. Back to the limited release though. While these people were driving all over town searching and paying outrageous prices, I was enjoying the exact same beers on tap. They were all over the place and there was no fighting to get what you wanted. Hell, even the firkin tapping of Hopslam at Flying Saucer wasn't difficult to get in on.

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  23. Ah, the old double-edged sword. More people are out hunting beer so there's less of the limited releases to go around, but the increased buzz around beer in our area means much more quality beer to choose from, if you can find it.

    Ultimately, it's a great problem to have. Didn't find any Hopslam this year? There just happens to be a plethora of other fantastic beer in our city to imbibe, some of which many would say you're ultimately better off with, considering the imaginary cost of entry to quality ratio that I just made up (see: Lagunitas, Green Flash, Firestone Walker, blah blah blah the list is huge). So I suppose my thoughts are thus:

    1. The beer economy will work itself out, either through natural means (waning interest) or artificial (higher prices from the brewery, increased supply, ...). In the meantime, look around and find something plentiful to enjoy. You'll be much happier in the long run knowing you can easily find more when you run out.

    2. If you won't rest easy until you've sampled the rarest of the rare, get out of the house and explore the bar community. As mentioned above, most of these super rare wonders are/were readily available on tap at a variety of places around town, often earlier and usually way later than their street date in bottle form.

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  24. I agree that the market will eventually correct itself. Personally, I think I just hit the point of not caring anymore about the new rare stuff. Now I love my Hopslam and BBQ and will do my best to get my hands on that stuff but I'm going to try to start ignoring the "we have 4 bottles of XXX, get it before it's gone!!" noise. If I happen to stop by the store and I see something that looks interesting at a price point I can accept, I'll still buy it.

    Probably the most disturbing thing about this recent boom in interest in craft beer is the increase in prices for limited release bombers. The maximum price points keep rising and in many cases, they've hit levels that are simply too high for me to accept. Sorry, but $15 for a bomber of Cocoa Mole is just too much. To help me keep myself in check, I multiply bomber prices by 3 and some change in my mind to get the six pack equivalent price. That $15 bomber of Cocoa Mole is equivalent to paying $50 for a six pack! Hopslam seems expensive at $18.99/6-pack but it's really a bargain when you put it in perspective! Putting prices in terms of 6-packs also helps me when drinking at local bars. That $9 10oz snifter is equivalent to paying $65 for a 6-pack. Who thinks I'm just a cheap bastard?

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  25. What about the liquor store that makes you buy 3 other Smokestacks as in order to buy the Chocolate Ale. While they are adding money in their pockets by selling more bottles, Boulevard also makes more of a profit and they get more of shipment next time. The only one who misses out is the customer who now have 3 beers to try. Better then marking up the price of the beer in which you alienate customers and really helping all parties involved. I had no issue with it and in the end it was only $10 more then what I saw the highest retail per bottle price.

    It's the same for tickets to concerts where their is already tickets for sale on secondary sites before the shows go on sale at much higher prices. (or in my case seeing GABF Member tickets on sale before you can buy them)

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  26. I think you are a cheap bastard, dantzig. Under normal circumstances, the cost of goods generally go down when you buy a larger amount...so a bomber is going to cost more per ounce than buying a six pack worth of beer. In a lot of cases, I would rather incur some of that additional cost on a bomber and not have to drink three times as much of a beer I possibly won't like. The same goes for paying more at a bar than you would for a six pack. The bar is providing you with the opportunity to try a beer through what most people consider a superior delivery method of draft compared to bottle. It's like saying why pay $10 to go to the movies when I can wait 4 months and spend $1 at Redbox.

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  27. Chimpotle-thanks for the honest reply! Since I unfortunately do not have unlimited money to spend on beer, I try to put my purchases in perspective so I can understand their true opportunity cost. Spending $15 ea on bombers and drinking $9 snifters means I should spend less on other fun things I like than if I bought $7 bombers and $4 draws and it's just not worth it to me. I guess my point is that I'm trying to put things in perspective of not overspending on beer just because it's rare, limited, and/or new. We seem to be going crazy over limited releases and prices are therefore going through the roof. Another example is 75th Street's limited releases. They sell Dante's Dream for $21.12 per 750ml. I'd love to support my local small brewery and try it but never will at that price because I know I can get 2.7 750ml bottles of Sixth Glass or 2 750ml bottles of Koningshoeven Quad instead! And don't even get me started on Sam Adams Utopias...

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  28. Dantzig, I don't think your thought process is irrational at all. I tend to think in terms of opportunity cost as well. The psychology of pricing for all products fascinates me, and beer is certainly included. I think the cheaper-per-ounce prices on a 6-pack has less to do with buying quantity than with the fact that breweries have figured out that it's hard to move product once it breaks the $9.99/6 pack threshold. They put more and more of their beers in bombers (or now, 4 packs) where $5.99 in a bomber seems cheap, but $20 a six-pack seems ridiculous.
    In the end though, I think my aversion to buying a $15 bomber of Imperial Stout has less to do with being able to afford it than it does my skepticism that it's going to be any better than the $8 bottle right next to it. I've found pricing on fancy beers has as much to do with pricing strategy as it is a reflection of material costs and quality.

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  29. My $.02...this whole topic is a function of the yearly chaos that is Chocolate Ale. Had some from batch 5 Sat night and I'm still not impressed. Nothing against Boulevard, I just don't like it.

    As for the ethics, I don't see a second-hand eBay/Craigslist double market as an issue whatsoever. It's a free market, much like ticket scalping. People do this all over with limited releases of...everything. See Christmas shopping. You can't legislate greed out of the human condition.

    I think Pat and others do a great job with the blog and have it trending towards being a useful tool in learning about new beers and where to buy them. I like how they're not pontificating like the Alstrom bros about rating/ranking beers. That being said, I don't even see 'ethics' as an issue to debate. In KC, it all stems from a once a year event.

    The real issue is why people actually drink beer flavored with chocolate. To me, that's losing.

    Oh yeah, and the guy from Mike's Liquor is a real treat. You get the sense that he's somehow angry you're in his store. He should sell tampons instead.

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  30. I'm pretty sure I saw one of the liquor stores that's active on twitter (Royal, Gomers, or Lukas) mention something about randomly putting rare beers on their shelves. I think this is a great idea.

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  31. One thing that has been danced around, but not quite mentioned is that there is a ceiling for the cost of these creative beers for the masses. The comment about the Cocoa Mole Beer may be technically correct on price as compared to a six pack, but as far as I can see New Belgium is a smart business and they would not sell for $15 what they could sell for $10. They sell it for $15 because that's what it cost to make + Taxes + Distribution + Retail Store markup + a fair profit for New Belgium.

    Once that price ceiling is met, these events will become less and less. Until then, no amount of whining, complaining, name-calling, or even government control (we saw what good that did during prohibition) will change it.

    I applaud those that chose to shop elsewhere because they did not approve of what happened with pricing or bad attitudes. That's the most powerful action you can take. Even better is to have a conversation with the manager or write a letter to the owner and let them know that you $$$ will go elsewhere.

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  32. Whenever I think I might be paying too much for beer I enjoy I remind myself when I used to shell out $3-4 a pop for miller lite and the like (some still do!). It's rationalizing, but since most of my drinking is at home, I just compare it to what I would spend going out all the time and even your $10 bombers are a bargain.

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  33. It is called capitalism, duh. I love when people suggest less govt then bitch about prices. Why dont most of you try homebrewing, you can clone alot of these beers.

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