What could be more German than beer? So why are an increasing number of Germans trading in their beer stein for a glass of wine? What’s next, pretzels for sushi?

Here’s the shocking, ugly truth from across the Pond:

“…Germans are increasingly turning to wine. At reunification in 1990, annual beer consumption per head was 148 litres. By last year it had fallen to 106. The Oktoberfest may still be the quintessential German party. But it’s not the beers that make it exciting.”

That troubling quote comes from The Economist, where the article goes on to report that government regulation may be what’s holding back Germany’s legendary breweries from being able to sate customers’ changing tastes. The same could be said of Colorado’s beer laws, but more on that later.

For 500 years, German breweries have been governed by the Reinheitsgebot, or “German beer purity law,” that limits German beer to four ingredients: water, barley, hops, and yeast. Humans have made beer for at least 7,000 years and the beverage hasn’t always been the clean, smooth draft that it is today.

Even so, purity wasn’t the main reason for the Bavarian law in 1516, writes The Economist:

“[A]s with many regulations today—[it] was market-rigging and protectionism. By excluding wheat and rye in beer, the law aimed to keep grain prices low for bakers. It also kept out northern German and foreign beers that contained other ingredients.”

Today, these regulation and protectionist policies inhibit German brewers from innovating because they have to stick to the four ingredients. That means no wheat beers or citrus or raspberry beers, and certainly none of the crazy experimental brews like these. Bacon beer anyone?  Not in Germany.

So what does this have to do with Colorado? Protectionism and regulation are also preventing Colorado companies from meeting our needs. Colorado is one of only eight states where shoppers cannot buy full strength beer in grocery stores. They can buy 3.2 beer but that’s not really beer. You’ll be shunned at the Super Bowl party if you bring it.

Currently only chain businesses with a pharmacy can sell full strength beer, wine, and liquor at one of their Colorado locations. Naturally the stores and many of their customers would like a full selection of real beer and wine at other locations.

There will likely be an initiative on the ballot this November. If it passes, the new law will increase consumer choice, lower prices, and generate some $2.2 billion in economic activity according to advocates, Your Choice Colorado.

Colorado’s independent liquor stores, which now enjoy a monopoly, and many of Colorado’s craft breweries and distilleries believe that consumers will lose out as liquor stores close and big box stores carry mostly national brands. They say consumers will have less choice.

But this assumes that the demand for unique brews and small retail shopping experiences will die with the liquor store monopoly. That simply won’t happen. Liquor stores that provide value in terms of selection and customer service will remain competitive. Liquor stores without a competitive edge will likely close. Small breweries will have to reach out to national chains to gain shelf space. In short, this market sector will become more competitive.

With competition comes innovation and specialization. Read: more beer at a lower price.

That’s something Colorado — and German — beer drinkers could toast to.

What are your thoughts? Do we have more options when there’s less regulation? When is it ever appropriate to choose wine over beer? Let us know on Facebook!

Regulations are intended to stop people from doing things that might hurt others, but they often turn out to do more harm than help. Learn more
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