What does the ghost of Milton Friedman even know about beer, anyway?

I just published a story at VinePair about rising prices in the beer business, which are trailing overall inflation but still around 5% higher than they were this time last year. As you may have heard, corporations with pricing power have been seizing this inflationary environment as an opportunity to capture additional profits to boost their profit margins beyond offsetting rising costs, a common practice that critics call “greedflation.” (The ghost of Milton Friedman on the other hand calls this practice “hell yeah, what’s the problem?” or it would, if anybody asked its translucent ass, which I most certainly did not. Continue shutting the fuck up, ghost of Milton Friedman!) I was curious to find out how much of this sort of profit-plus price-hiking was happening amongst the four largest publicly traded macrobrewers in the United States (Anheuser-Busch InBev, Molson Coors, Constellation, and Heineken), particularly given some of the rather suggestive statements that executives at those firms have made to investors and analysts in recent months. So I looked into it for VinePair, and I regret to inform you, dear reader, that the macroeconomic vagaries of international commerce do not map tidily onto our particular industrial sector of interest. Nuance: we hate to see it, yet it persists apace!

I hope you’ll check out the full piece for more detail, because there’s a lot in there. And as usual, here are a few “murdered darlings” from the reporting process—i.e., interesting insights and quotes from sources that didn’t make the final cut, printed here for the Fingers Fam’s reading pleasure.

The quotes below have been lightly edited for length and clarity.

— Lindsay Owens Ph.D., the executive director of the Groundwork Collaborative, on why even cynical and/or pro-capitalism drinkers should care about corporations padding profits under the guise of inflation:

I mean, look: capitalism without competition is exploitation. Our economy will thrive when there's free and fair competition, when new companies with new ideas and new products are able to enter the scene and improve upon the status quo. I think we all want better-tasting beer, new and interesting types of beer. An economy where a few big guys are able to snuff out the competition and run the tables is not a healthy economy. We've seen with the supply chain issues the perils of having an economy where there isn't a lot of diversification, there isn't a lot of redundancy. We want diversification, we want redundancy, if we want a resilient economy that works for all of us. These very large companies, it's not just pricing power they have. They also have political power. They're able to bend the rules in Washington to their terms. We need a corporate America that is more accountable to consumers and to the population. Aside from just price, there are other kinds of downstream problems that come from having only few of powerful actors in the economy.

— Michael Uhrich, the founder and chief economist at Seventh Point Analytic Consulting, on why macros are better poised to win on trade-downs than craft brewers:

One of the things I like to remind people of, particularly with regard to beer sold by the largest suppliers, is that for some types of beer, a drinker can downgrade the brand, without downgrading the experience or the volume. Pale lager, for example. I've talked about this too many times, it must be annoying people. But for pale lager, you can pay whatever you want, you can pay next to nothing for a 6-, 12-, whatever-pack of pale lager, or you can pay an arm and a leg for pale lager. If the price of your favorite brand goes up by whatever amount, you can switch to a lower-end brand and end up getting the same amount of beer for the same price that you were paying before from the same beer company. As a result, there’s been barely any difference in the industry. The brand mix is a little bit different, but the overall volume hasn't really changed. And the overall retailer revenue hasn't changed. Now, the craft suppliers are a little more reluctant to take price, because there’s a real fear that if you ratchet up that price and you lose the drinker, there's nowhere for them to go where you would still catch them.

— Kevin McGee, president & CEO of Anderson Valley Brewing Company, on how sustainability initiatives helped his firm freeze beer prices despite rising costs:

Some of the sustainability stuff that we have going on here is kind of unique, so it's not something that that wouldn't necessarily be available to smaller brewers. There are a lot of smaller brewers that are suffering. But we're able to offset some of our power because the solar systems that we have, we're not vulnerable to fluctuations in certain utility payments for things like water, because we run our own water system. And we made some changes to packaging and some of the ways we do business, which ended up dramatically reducing our reliance on shipping and freight over the last couple of years. We ship out 110 cases of cans on a pallet compared to 72 cases of glass. That’s a pretty dramatic change in terms of like what we're sending out. The way that the packaging comes in is more efficient. So even if it's not the actual aluminum itself, the cardboard that we use chips a lot more efficiently too. And then, there’s the recyclability component, the environmental aspect of it, which was one of the primary reasons to do it, too. We were able to capture enough margin through package changes and a few other things that we offset most of the cost increases. Depending on the product, our margin is pretty close to flat [without raising price.]

— Andrew Nadeau, certified financial planner and senior wealth advisor at Bigelow Investment Advisors, on how macrobrewers hedge input prices:

Typically, a company may hedge the risk of the amount of wheat or oats they are purchasing by taking out a futures contract to take advantage of any price disparity between what they are paying the actual provider and how the input is trading on the physical market. Another way these companies hedge since they are huge multinational corporations is through currency hedging. Since they are selling products all over the world they will also typically deploy some type of trading strategy to help hedge out any potential currency risks.

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🥵 “Let’s all get drunk, high & hot” (and maybe overthrow capitalism idk)

I know last week feels like a decade ago, but I really wanted to highlight this Juneteenth clip from Newsmax, the propaganda feed of choice for MAGA types who think Fox News has, oh, I dunno, been too nice to trans kids lately? Or whatever. Host, knockoff Balmain wearer, and semi-sentient ham Greg Kelly packs an industrial volume of spittle-flecked white Boomer race rage into just 60 seconds of runtime, and for that reason, I’m genuinely sorry for bringing it to your attention. But I thought it was worth it because of how clearly it showcases conservative, capitalist paternalism towards working-class relationships with alcohol, particularly during moments of mass leisure. Paying the briefest bit of lip service to his supposed concern for alcohol addiction, Kelly launches into a racist diatribe about how Black people, if given a day off, will spend it drinking. They might even gather together to commiserate over some shared “resentment of the system.” The horror!

Kelly, who as far as I know has dedicated zero seconds of airtime to the holidays during which white people get drunk (read: all of them), gives the game away here. Beneath the race-baiting dreck for the braying brain-wormed is a seething fear that the United States’ disenfranchised underclasses may realize their collective power to disrupt, dismantle and remake the country’s undemocratic institutions into something other than the upwardly redistributive and wantonly cruel status quo. That outcome bodes poorly for Kelly, his handlers, and his viewers (which of course include former president Donnie Deals, lol), not to mention the interests of capital generally. So Republican party organs like Newsmax conflate indulgence with addiction and leisure with rioting, shellack it in tired racist tropes, and hope it scares enough swollen boat-owners into voting to buy their local police department more tanks to protect the Publix from antifa super-soldiers. Anything to keep them from facing the reality of an America worthy of resentment… or their complicity in perpetuating it.

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