Is the price right?

The subject of whether we undervalue good beer in the price we’re prepared to pay for it has cropped up again in the past couple of days. The debate was well summed up in this blogpost by Boak & Bailey, and the subsequent debate in the comments, but I thought it would be worth adding a few thoughts of my own on the subject, in no particular order:

• The world doesn’t owe anyone a living. No product is worth more than the price customers are willing to pay for it.

• In general, cask beer in the UK is far from cheap. Outside Wetherspoon’s, the going rate is well over £3 a pint in most areas; in London £4 or more. If the brewers aren’t getting much of that, don’t blame drinkers for being skinflints.

• The people drinking beer at £2 a pint in Sam’s and Spoons wouldn’t be there at all if it was a quid dearer.

• As in most other markets, there’s room for a mixed economy of discount, mainstream and premium retailers. Think Aldi, Tesco and Waitrose.

• High duty levels tend to reduce the returns to producers, as consumers only have so much money in total to spend on beer.

• To some extent, the benefits of progressive beer duty have been used to offer lower prices rather than a better return to small brewers.

• Many small brewers do not rely on brewing to provide a decent full-time income, because they are retired, have another job, a rich daddy, or a working partner. This means they can afford to take a more relaxed attitude to pricing. For the avoidance of doubt, it does not mean they are any less competent or dedicated as brewers.

• There is a wide variety of potential wholesale purchasers of beer. If you don’t like Wetherspoons’ prices, don’t sell to them. It’s not an oligopsony like supermarket purchasers of milk.

• If you want your products to command a price premium, you have to earn it. Look at BrewDog and Thornbridge. Or Peroni, for that matter.

• The rotating guest beer culture in pubs militates against brewers achieving a price premium. Pubs tend to either charge a flat rate or price in strength bands.

• For historical reasons, cask beer sells at a discount to kegs and lagers. You may well think it’s a better product and deserves a higher price, but that’s always going to be the case while it remains so variable in quality at the point of sale.

• If artisanal beer was dearer, more people would drink industrial beer.

• If you really can’t make a decent living at brewing, there are plenty of other careers out there. There doesn’t seem to be a shortage of people willing to try their hand at it.

Incidentally, I donated all of this year’s Spoons tokens to Simon Everitt of BRAPA fame, who I’m sure will make better use of them than me. I generally only go in Spoons for the meal deals anyway, on which they’re not valid.