Barley Mowat 

Where Does Good Beer Come From?

with 4 comments

As everyone knows, we all live in the best beer-producing region on the planet. Yes, I’m talking about Cascadia. Oh, I mean, sure, Belgium has some nice beers and all, and as jealous as I am of all their monks and giant caves for cellaring and whatnot, they’re just a bit too… traditional for me. Let’s just say that brewing with a slightly different strain of yeast is big freaking news over there.

Cascadia, however… now there’s some brewing innovation. Sure, a lot of that innovation is around the idea of hops, more hops, “how can I over saturate this beer with hops” and perhaps a little bit of “is cramming the bottle full of hops too far? I didn’t think so.” But there’s also plenty of toying around with malty ales, sour ales, barrel aged monsters, and even belgian ales. Yeah, we play that game, too. Also, we play the hops game, did I mention that?


Has anyone thought of making the GLASS out of hops?

The only problem with Cascadia, though, is that some thoughtless fucker drew a gord-damned international border right through the middle of the thing. I mean, really, W.T.F.? That’s a whole lot of wire fence, barbed wire, and generally impolite german shepards between us and the other half of our unlimited great beer collection. Sure, we can physically go there, buy some, and bring it back, and that sorta works, but imagine if you had to personally go to Thailand every time you needed a fix of China White. It’s good in principle, but it just doesn’t work three times a day. Luckily some nice folks are willing to mule your horse to the alley behind the Carnegie Centre. And likewise, some nice folk will go to the US and get (some) good beer for us, and deliver it to places like Viti, Firefly and Brewery Creek.

And now we come to the meat of this article. How does good beer show up on those shelves? Well, I’ll give you a hint: the LDB sure-as-fuck isn’t ordering it because it isn’t wine (aside: Seriously, can we get Deschutes to rebrand their beer as a wine just so the LDB will show some interest in importing it en masse?)

The reality of the matter is that the vast majority of good beer you buy at LRSs is imported by one of three companies who make bringing in the goods their full time jobs:

  • RainCity Brands, responsible for Upright, Boundary Bay, Uncommon and Pretty Things
  • BeerThirst, who do: Anderson Valley, Bear Republic, Eel River, Elysian, Green Flash, North Coast and Tenaya Creek
  • AFIC Group, who bring forth Ballast Point, Brooklyn, Deschutes, Dogfish Head (or rather, used to), Flying Dog, HopWorks, Lagunitas, Lakefront, Lost Coast, Pike, Pyramid, Rogue and Sierra Nevada

These fine folks go forth, make the deals with the breweries, arrange for shipments, and then list the thing through the LDB because, well, they have to by law. They can set that price as high as they want, though (not as low, because the LDB thinks we couldn’t control ourselves with cheap beer). People like to complain a whole lot about import pricing on beer, but honestly it’s really not that bad… if the importer can work out a deal to make it not that bad.

Take Upright Five, for instance. This is one of my favourite US-based beers. It’s available in the US for about $8 to $10, depending on where you find it. Transport it 350 miles north, change hands a few times, slap on some import tariffs, and suddenly, on the cold side of that giant fence, it becomes… $9.79 at the LDB. Whoa! Really? Screw the fence! The system works!


Just kidding. The system totally doesn’t work.

Hold on, grasshopper, let’s take another example. How about Deschutes Stoic? That puppy is $12 in Portland. Haul it to the Great White North and you’d expect it to be, what, $13? $14? Wrong answer. Try $27.

We can play this game for a while. Elysian Immortal: $7.29 US, $5.99 CA. Brooklyn Sorachi Ace: $8.99 US, $20 CA. It’s a fun game (actually, no, it’s not. It’s very boring, and wastes computer time that could better be spent on porn), but time and time again you wind up with some beers being about the same (or cheaper) here, and some being 2-3x the price, and there’s no pattern. Or is there? I’ll save you the time: All the beers with the high prices in Canada are imported by AFIC (but conversely, not all beers imported by AFIC have high prices).

Sometimes they’re even both. That Sorachi Ace I mentioned earlier might have pricked some ears, as it sure started off at $20 (more like $27 by the time LRS markup was in place), but it just as surely wound up at $9.99 at your local LDB. That got my attention, as the LRSs who bought a few cases of product at the original price were surely not terribly pleased by AFIC turning around and listing it at the LDB for less than half price. Curious, I asked around for an opinion about what was going on.

Oh, if only I could bottle the pure, unadulterated rage coming from the LRS employees. It’d make a great cologne. Or elk musk. The difference is subtle. Basically, they feel as if AFIC has screwed them into the ground on this one. And then they ranted at the LDB for even selling a SPEC product to the public. And then something about the Illuminati and how 9/11 was an inside job. Let’s just say I wasn’t convinced of the quality of information I was receiving, so I decided to back away very, very slowly, and then go against my long-standing rule against actual journalism and ask the source.

Yup, I emailed AFIC and asked them for their view. Somewhat shockingly, they got back to me pretty much straight away… with a promise to answer my question the next day. Time came and went. No answer, so I pinged them again. Again, a fast response with a promise of an answer “today.” Again crickets. Again an email from me, only this time no answer. So let’s just say “AFIC declined to comment.”

You’re all expecting a massive, profanity-laden blast of vitriol from me now, aren’t you? I mean, the ebil corporation refused to even attempt to explain themselves. And they screwed over the LRSs! Let’s give it to them? Well, here’s a surprise for you: I don’t think that’s the case. AFIC likely got tied up, or just didn’t put a lot of stock into explaining accounting to someone who’s internet persona can’t go half an article without swearing. Shit.

There’s a couple bits of info I learned way back at the start of this whole thing that lead me to this conclusion. First, the high-priced beers are all limited production, high-demand brews. Second, any importer can totally steal clients from another one. If AFIC really was screwing us by setting the price arbitrarily high for these products and keeping the cash, then why wouldn’t BeerThirst swoop in, promise Deschutes to triple their high-end sales in BC, and steal what is, after all, a very large and lucrative contract?

The only answer I could come up with is that the other companies can’t better the deal, and Deschutes is happy with the amount of product they’re shipping to the border. Shipping to another country is HARD. So hard, in fact, that most breweries flat out refuse to do it. Perhaps Deschutes is so happy with the current arrangement, in fact, that they aren’t even giving AFIC wholesale prices on the specialty beers, which makes selling them at a lower price an even harder proposition.

Without an answer from AFIC, though, my nice answer is just speculation, so feel free to pour on the hate.

Written by chuck

February 27th, 2012 at 8:33 pm

Posted in Beer and You

Tagged with ,

4 Responses to 'Where Does Good Beer Come From?'

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  1. Cheers, thanks for the mention!

    We at Beerthirst do our best to ensure that the consumers get to enjoy quality craft beer from around the world at a good price. It’s not always easy as breweries have their demands and limits, but we do our best. Thanks for the support.

    Cheers!

    Beerthirst

    28 Feb 12 at 10:05

  2. Beers above 12% get taxed so you have to raise the price to break even or profit off it. Also, some beers are very limited when you think of all the places it has to get shipped to. So you might get it at a higher cost from the brewery.
    I guess it depends on how you do business. You can tell when some people try to squeeze every penny out of every sku by marking everything high. Balance=customer service;)

    Leo

    28 Feb 12 at 10:15

  3. @Leo, the 12% rule is very true (>%12 is a “spirit,” which comes with a massive tax hike, hence all those 11.8% Driftwood beers), but all the Deschutes specialty brews come in at 11%, and Sorachi Ace hits a milder 8%.

    Don’t get me wrong, there are massive tax markups imposed on import by the LDB. To get close to price parity, it takes the cooperation of the brewery to lower prices from retail. And I rather suspect there’s no incentive to Deschutes to particularly chip in on this front since they can likely sell everything they make at retail cost.

    chuck

    28 Feb 12 at 10:44

  4. Sorry, I forgot you were using Sorachi Ace as one of the examples.
    However, I didn’t realize the Deschutes specialties hit the 11% Always thought it was higher.

    Leo

    28 Feb 12 at 10:50

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