On Expenses

I’ve got beer as an expense on my monthly budget-othewise god only knows how much I’d blow- and I’ve always felt that beer in the grocery store was far more expensive than it really ought to be.

There’s a mini-rant at the New School blog about this topic and the author asks people to chime in with reasons why beer is so expensive–and of course, nobody really has any clue. There’s some nonsense about ‘that’s what the consumer will pay’ but you know what? I don’t set prices for beer. Someone else does and there’s very few ways for me to know if I’m being screwed or not. What I can do is not buy that beer, because it’s too expensive and homebrew. However, that’s not an option for most people. They pay what the store tells them to: If they could get it cheaper elsewhere, of course they would do that. Consumers have a lot less power, I think, then most economists try to foist on us.

It’s suggested that Oregon’s distribution system for beer (which is examined, also at the New School blog, here) may be an accomplice in the high prices. I wouldn’t doubt it, especially as that system becomes more tightly controlled by one or maybe two corporations.

I’m happy to pay what’s fair but how do we measure what’s fair? How do I know what’s fair? I have to confess, I don’t know enough about the industry to say, all I can do is look at what information is available and say: something seems wrong about this.

7 thoughts on “On Expenses”

  1. Grandpa Frank bid at 50% above cost, if memory serves – that way he mad money. I think he was an honest man so I trust that he wasn’t making that much profit. If the same holds true for brewers and if volume reduces cost, you can figure something out by looking at the price of Bud compared to the price of… Dogfish Head, say. Figure out if you’re saving money by brewing your own over buying you favorite. Lots of different ways to calculate cost. But, since there is more involved than just cost for any purchaser, you have to factor in taste, prejudice, when and where you drink beer, what your social group considers acceptable and etc. One thing’s for sure: if you’re bitcnin’ ’bout the price: buy something else.

    1. Well, I definitely save money by brewing my own. If there’s a drawback, it’s that I tend to look for more exotic styles of beer, which are more expensive, because I can make a decent pale ale.

      However, I don’t think it’s as simple as ‘if you don’t like the price, buy something else’, which was the point of the articles I was linking to. The price might be artificially high due to a marketplace that isn’t as competitive as it should be.

      1. If economics works the way they tell us it does – which, I think, at some level it does work that way, then buying something else will make them lower their prices. It may require some sacrifice. It may require some organization – like a boycott. But that’s how you make them change.

  2. I just don’t think beer is all that expensive here. Go elsewhere to see what a six-pack costs (out of state, I mean) and you’ll see that it just isn’t as bad as people think. There are plenty of fabulous beers to be had here for a more than reasonable price. You don’t always have to reach for the expensive, exotic beers to enjoy yourself. Deschutes, Bridgeport, and Widmer are regularly $7.99/six-pack at Freddy’s. Oh the problems we Oregonians face….

    1. Good point. Bill’s article seemed pretty solid but it’s been a little while since I actually looked at prices in Washington. Still, I seem to remember most beers there being at least somewhat cheaper.

      And while it is possible to get a solid beer for a reasonable price here, I don’t think that takes away from the need to look at Oregon’s distribution laws to see if they are encouraging a monopoly that will not only restrict what we see but drive the prices up.

      1. I just went and read the article at the New School. Had to get me some edumucation on the subject. Again, compared to Washington and Minnesota? Ok, maybe we cost more. But go to New Mexico and a six pack of Widmer or Deschutes is the same cost there as here. The State of New Mexico does not operate like Oregon with its controls on distributors, etc. I don’t have a good answer, but I feel like beer here is cheap compared to what I’ve seen charged in CA, NM and some other states. Seems like we might be right in the middle of costs…

      2. Could be. But I’ve always been a little surprised that a beer made in Oregon-sometimes even in Portland-could cost as much or more than a beer made in California.

        An actual breakdown of costs would be interesting to see.

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