Another Reason to Hate Ebay — Reselling Boston Beer’s Hops…

I suppose we all should have seen this coming but for some reason it still surprises me. Not 48 hours after the Boston Beer Company held its hop lottery, in which it selflessly sold off excess hops AT COST to craft brewers who desperately needed them, some joker has put a bunch of the hops up for sale on Ebay. A brewery entering the hop lottery paid $5.42 for a pound of Tettnang Tenttnanger hops. The cost on Ebay? The bids start at $29.95, a 550-percent markup for starters (plus $9.50 shipping). The odd thing is that the website also has Spalt hops for sale at the same price, but the Boston Beer Company didn’t offer this variety in the lottery. Out of respect for Boston Beer, I won’t post the web address but you can surely find it.

You are bidding on a full pound of HOPS PELLETS. aquired from Boston Brewery, maker of samual adams. . THEY ARE VERY GREEN. Sorry about the photo. TOO high tech of a camera.

This one is Garth Pellets Type 90 Spalt Spalter. Alpha 4,5%. Crop 2006. They had them in a Freezer at 20 degrees below. PACKED IN NITROGEN for added shelflife. 5 years shelflife if under zero degrees. We are packaging them in 1 pound packages and selling them to the public.

Item will ship out the same day your payment is received. Shipping is $9.50 for the first pound and only $2.50 for each additional.

Boston Beer appears to have anticipated this problem in a press section of its website:

Q: What will prevent the brewers who buy these hops from reselling them at a much higher price?

A: Nothing other than doing what is right. We believe craft brewers will help one another. We’ve asked brewers to order only what they need and to let their consciences be their guide.

Nice to see how human nature works that whole conscience thing out. I sense someone has reserved themselves a toasty place next to the fire in a beerless hell…

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Some Final Thoughts About What You’re Drinking On St. Patrick’s Day…

In a follow-up to my recent article on American breweries exploiting the St. Patrick’s Day holiday, I wanted to lay out some brief thoughts on popular beverages traditionally enjoyed on this day. When you think of the usual beverage alcohol suspects consumed on the 17th in March, the list usually includes, for beer, Guinness, Harp, Murphy’s, Smithwick’s, and sometimes even Beamish and Kilkenny. And when we think of Irish whiskey, it’s usually Jameson and Bushmills. For liqueur, it’s Bailey’s.

Most drinkers don’t truly comprehend the global nature of the beverage alcohol marketplace and the assault on local heritage that has occurred over the last 20 years. In an age of consolidation, Irish beer and whiskey no longer really exist. Let’s look at Guinness, by far the most popular Irish beverage alcohol consumed on St. Patrick’s Day. With its storied history, Guinness is a global brand whose heart is clearly in Dublin, right? Well, in 1997, a merger between Guinness and beverage alcohol empire Grand Metropolitan, which owned the Smirnoff and Baileys brands along with the Burger King chain, created global powerhouse Diageo.
Based in London, Diageo is now the largest multinational wine, spirits, and beer company in the world and Guinness is only one of dozens upon dozens of brands. (For lovers of Scotch whisky, Diageo also owns and operates the distilleries of Blair Athol, Caol Ila, Cardhu, Knockando, Glen Elgin, Clynelish, Cragganmore, Dalwhinnie, Glenkinchie, Glen Ord, Lagavulin, Oban, Royal Lochnagar, Talisker, Mannochmore, Mortlach and Glenlossie).

This past year has seen a great deal of controversy for Guinness as Diageo has been considering selling the historic St. James’s Gate Brewery in Dublin. The heart of Guinness’s operations since 1759, when founder Arthur Guinness signed a 9,000 year lease at £45 per year, the value of the land on which the brewery sits is now estimated at nearly £800 million.

Perhaps in recognition of the lack of local connection to the famed brand, Guinness has also seen tremendous reductions in consumption among the Irish themselves. Sales of Guinness in Ireland have dropped by more than 25-percent in the last eight years. In 2007, sales dropped nearly 10-percent. As one writer in The Irish Independent so colorfully put it,

For generation eff-you, Guinness is just a smelly old man drink, although the company is ramping up its marketing activities and ploughing millions into the relaunch of its home drinking products.

So if Guinness is no longer really an Irish brand, what about the other famed Irish drinks? Well, again we have to look to Diageo, which also owns Harp, Kilkenny’s, Smithwick’s, and Bailey’s. For those seeking an alternative from Diageo, you’ll be happy to learn that Murphy’s Irish Stout is owned by Heineken International. And what of Beamish, which is occasionally seen in the United States? The brewery was purchased by the Canadian brewing firm Carling-O’Keefe in 1962, then incorporated as part of a takeover in 1987 by Elders IXL, sold to Scottish and Newcastle in 1995, before passing to Heineken Ireland after the takeover of Scottish and Newcastle in 2008.

Well certainly, Irish whiskey remains Irish, right? Wrong. The most popular brand of “Irish whiskey” in the world, Jameson, was bought by French alcohol conglomerate Pernod Ricard in 1988. The same with Black Bush, Tullamore Dew, Powers, Paddy, Redbreast, and Midleton VR. And what of Bushmills? Once owned by Pernod Ricard, the brand was traded to a familiar name in 2005. So buy a nip of this Irish whiskey and your money again flows into the pockets of Diageo.

According to Beeradvocate.com’s Beerfly, Ireland has only 12 breweries today (compared to more than 1400 in the United States). When you remove the above-mentioned brands, you’re left with 8 breweries. Of those, only the Carlow Brewing Company distributes beer in the United States. So much like with bad weather, if you have to leave the house on St. Patrick’s Day, keep your eyes out for O’Haras Celtic Stout, Curim Gold Celtic Wheat Beer, and Molings Traditional Red Ale if you can find them. Or perhaps an Irish-style ale produced by your local brewery or brewpub. And without question, feel free to smack your friend if he orders you any green beer.

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Media Draft: Cheapflights.com’s Beer Lover’s Airport Guide

I don’t usually post press releases (as my three loyal readers can attest) but this particular offering caught my eye. A PR representative sent me a release for an airport beer guide produced by the travel website, Cheapflights.com. The Beer Lover’s Airport Guide and accompanying podcast detail where to find craft beers in 15 of the nation’s busiest airports (including Atlanta, Boston, Chicago, Dallas, Denver, Detriot, Los Angeles, Las Vegas, Miami, New York, Portland, Salt Lake City, San Francisco, Seattle, and Washington. The four-page guide has not a single mention of Budweiser, Miller, or Coors and focuses on tap rooms for breweries from Harpoon at BOS to Laurelwood at PDX and Wasatch at SLC.

The podcast (available as an MP3) is a pretty well-done narrative report on airport beers, with occasional quotes (not live) from sources such as Julia Herz of the Brewers Association and Dan Gordon of Gordon Biersch. While the multiple uses of the word ‘quaff’ detract, I’m also not crazy about its relaying of the tired myth that Sam Adams was a brewer. Beyond these minor nitpicking points, it’s pretty big picture stuff but still a welcome addition nonetheless.

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Everyone Is (Unfortunately) Irish On St. Patrick’s Day…

So that time of year is upon us once again, the time when imbibing throngs pack into bars, throw on giant, foam hats, and clink mugs of green beer in celebration of, well, something. Perhaps a greater perversion than even the American fascination with and celebration of Cinco de Mayo, St. Patrick’s Day is an opportunity for wild, unabashed revelry among the masses and for big breweries to haul in the cash.

Miller and St. Pat’sI live in Boston and St. Patrick’s Day is a thing of legend here. As a well-known Irish enclave, Boston plays hosts to more than its fair share of prefabricated, soulless, faux-Irish pubs. These places, with such thoughtful, traditional Gaelic names as The Purple Shamrock, are difficult to appreciate even on a slow weekday. Come the 17th of March, and the bars transform into some of the least hospitable places on the beer drinking planet.

Now I don’t begrudge anyone a day or two a year to let loose but this particular holiday, along with Cinco de Mayo, has always felt pretty forced to me, especially in Boston. Quick, tell me three things you know about the man known as Naomh Pádraig. Admit it, the only thing you could come up with was the snake thing. And when you think of Cinco de Mayo, you think of the day that Mexicans won their freedom. You and millions upon millions of others would be wrong on both counts. But why let a little history, or legend, get in the way of a few pints, right?

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St. Patrick’s Day comes early to Boston, with the big brewers’ paper shamrock laden paraphernalia being taped to the walls of bars weeks in advance. And herein lies my real problem with the holiday (and Cinco de Mayo as well), namely its exploitation by big American breweries. Despite its ownership by London-based global behemoth Diageo (which is rumored to be closing Guinness’s historic and famous St. James Gate brewery in Dublin), I’ll give a pass to Guinness, which sells an estimated 13 million pints of the now-rubyish beer every March 17. But because American breweries, with no ties to Ireland or Irish history (the diluted histories of the big guys are all German), see a chance to sell a lot of beer, we get paper shamrocks haphazardly stuck to bar room walls.

So what to do on St. Patrick’s Day? Given the dearth of quality Irish beers (O’Hara’s Stout being a rare example), a few years back I recommended an exploration of Scottish-style ales out of spite. Seeing as Patrick was himself born in Roman Britain, and not Ireland, that recommendation seems sound today. So as I think about how a historic metaphor involving snakes and religion can spawn so wildly out of control, I’ll be drinking beer made by some Scottish descendants at the Dunedin Brewery in Florida.

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Price Creep Redux: Beer Bars Disrespect Their Customers

When predictions that the sky would start falling in the craft beer world over forecasted price increases a few months ago, I initially trained most of my focus on those breweries whose prices went up before their present contracts even came due (in many cases, the more established craft breweries have raw materials contracts going out a year or more). Despite the fact that their suppliers continued to meet their contract requirements (and prices), we started to see wholesale prices creep up a little bit in February and then considerably higher in March. While many American craft brewers have already raised their prices, even if minimally so, there are still many breweries in New England and beyond that have yet to even raise their prices.

Despite the delayed onset of the prices increases that we have been bracing against for months, drinkers in the Boston area began to see beer prices rise sharply as early as three months ago. In some places, beer went up 50 cents, in others a dollar. In a few dastardly holes, extortionists raised prices even higher. And all of this happened long before the bar owners even received their updated price sheets and felt the pinch of an extra five or ten dollars per keg. So to recap, price increases just went into effect, yet some bar owners have had their hands in the back pockets of their customers for a couple of extra months.

In justifying the price increases, I’ve heard a few pub owners break out the old gem, “the beer is good, so you should be willing to pay more for it.? That’s fine and all, but in this case the money is going directly into the publican’s pocket, not to the brewers.

Things recently hit a fever pitch for my friend Todd Alstrom, one half of the BeerAdvocate.com brother team, during a visit to Bukowski’s. A longtime fixture on the Boston better beer scene, Bukowski’s (with locations in Boston and Cambridge) has a reputation for loud music, obstinate servers, and absolutely outrageous prices. In 2002, I visited the bar soon after the Stone Brewing Company entered the Massachusetts market. After pulling up to the bar, I ordered an Arrogant Bastard. A few minutes later, I received a 12-ounce pour of the beer and a bill for $5.25! I eventually figured out that the bar was marking up the beer 500-percent over its wholesale cost.

So on Todd’s recent visit, he encountered the following highway robbery prices:

-Southern Tier Jah-va 12 ounce pour for $8
-Southern Tier Backburner 12 ounce pour for $7
-Young’s Winter 16 ounce pour for $6.75
-Sixpoint Sweet Action 12 ounce pour for $6
-Blanche de Bruxelles Wit 12 ounce pour for $6.25
-Dogfish Red & White 10 ounce pour for $10
-Harpoon IPA 16 ounce pour for $4.95
-Boulder Mojo Risin’ 12 ounce pour for $6.25
-Harviestoun Old Engine Oil 12 ounce pour for $7
-Brooklyn Pils 14 ounce pour for $5
-Abita Restoration 16 ounce pour for $6
-Opa Opa IPA 16 ounce pour for $5.75
-Harpoon Brown 16 ounce pour for $6
-PBR 16 ounce pour for $2.99
-Weihenstephaner Hefe 16.9 ounce pour for $7.75

It’s hard to quite know where to start here. Putting aside the fact that Buk’s charges an extra buck per glass of Jah-va stout versus Backburner when both have the same keg price, you really have to wonder just how malicious a beer pricer can get when it comes to the Brooklyn Pils and the Harpoon IPA. The Brooklyn beer sells for $125 for a 15.5 gallon keg, while Harpoon IPA sells for $120 for a 13.2 gallon keg. By the numbers, I should be paying less for the Brooklyn Pils then I do for the Harpoon IPA, but this not the case. In fact, I pay a little more for Brooklyn and get 2 ounces less of beer! And can someone explain why I should be paying an extra $1.05 per pint of Harpoon Brown, a beer which costs the same wholesale as the Harpoon IPA? Then we get to the Weihenstephaner…While the keg cost is a little higher and the pour slightly more generous (less than one ounce more than a pint), the keg cost is only $20 more than the similarly sized Harpoon IPA keg. Yet I am asked to pay nearly $8 for a beer that many local bars (Redbones in Somerville included), charge $4.50 for. On a single keg of the tasty hefe-weizen, assuming a ten percent draft loss with overpours, Bukowski’s is taking in $700 for a single keg, with a cost of $145, a price to cost ratio of almost 5 to 1). Compare that to the $470 Buk’s takes in for a keg of Harpoon IPA, with a cost of $120, and you can begin to picture the guys in masks riding up to your stagecoach.

For the last few months, I’ve been keeping an eye on wholesale price increases in anticipation of the impending “crisis.? Let’s take a look at some of the prices that we have seen here in the Massachusetts market, from January 2007 to March 2008 (prices reflect 15.5 gallon “half-barrel? kegs unless otherwise noted). The first column reflects prices (if available) in January 2007, the second January 2008, and the third March 2008.

Dogfish Head Craft Brewery (Atlantic Importing)
-60 Min IPA $129 $129 $139
-90 Min $175 $175 $189

Stone Brewing Company (Atlantic Importing)
-Stone IPA $129 $129 $149
-Arrogant Bastard $129 $129 $159
-Ruination $179 $179 $219

Bear Republic Brewing Company (Atlantic Importing)
-Hop Rod Rye $149 $149 $179

So in comparing Stone and Dogfish, Dogfish Head’s price increases seem pretty reasonable overall, between $10 to $14. Stone’s seem a bit higher, from $20 to $30 and $40. The jump on Ruination is a bit troubling overall and cannot simply be put off by an increase in hop prices (regardless of how stupid hoppy this beer may be).

Now if you were a bar owner and the price difference between these kegs in your mind really represented a substantial hit to your business (keep in mind the margins employed by Bukowski’s, extortionate as they may be), you might consider doing some shopping around for bargains. And you would find them. Great Divide Brewing Company offers its Old Ruffian Barleywine for $169 per keg, while North Coast Brewing offers its Old Rasputin Imperial for $156 and Old Stock Ale barleywine for $147 per keg. Compared to the Ruination price (these beers in my mind compete insofar as they represent sipping beers, not session beers), these respected brands seem like a steal.

By why bother restricting your shopping to the American craft market? While it may have been on fire in recent years, American craft brewers have much to thank their European counterparts for. Arguably the ancestor of much of America’s brewing creativity, Belgium is looking more and more like a steal recently. The same goes for German, Czech, Italian, Scandinavian, and British breweries. Despite the global scope of the above-mentioned raw material problems, the Boston area (a major market for better import brands) has seen next to no price increase on European “craft? beers. As I wrote in a very controversial column for BeerAdvocate Magazine, titled “Price Creep,? classic European brands often bring hard-to-match quality at a much more reasonable price than American craft brands. The Atlantic Importing lineup of Belgian and German draft beer (and bottles) has seen almost no price increases. Some brands have even seen a substantial decline in price in the last year (St Bernardus Abt 12, a beer many compare flatteringly to Westvleteren 12, went from $165 in January 2007 to $145 in March 2008 for a 30 liter Sankey keg). Only Brasserie de Rocs, Urthel, and Pauwel Kwak have gone up and only by a few dollars (seven in the case of Urthel Hop It!). Oddly enough, it was Brasserie de Rocs that I focused on as a wildly underpriced brand in the column.

While it may be time to start looking to imports for better value, don’t forget your price friendly local brands. Western Massachusetts juggernaut Berkshire Brewing hasn’t raised prices for its bottles or kegs a single cent since January 2007. Despite this, I’ve seen local package stores and bars consistently jack-up the price of this great brewery’s 22-ounce bombers.

And what about the small price increases we’ve seen for some breweries? A price increase of $10 per keg for a brewery such as Harpoon (from $110 to $120 for a 13.2 gallon keg) is probably long overdue. By the numbers, however, the cost increase shouldn’t result in anything more than a single dime being added to the price of your pint. Similarly, we’ve seen the following small price increases for these popular brands from the Craft Brewers Guild distributorship. (Prices in the first column are January 2007 or most recent period before price increase and the second column prices reflect March 2008 costs).

-Allagash White $135 $141
-Boulder Mojo $120 $130
-Clipper City $115 $130
-Gearys $110 $120
-Magic Hat $104 $110
-Sierra Nevada $120 $125
-Wachusett $120 $125

From a consumer’s perspective, those are entirely reasonable wholesale cost increases that shouldn’t result in major price changes at their favorite pubs. Now when we look at a brewery such a Rogue Ales, whose Dead Guy Ale jumped early from $140 to $165 (13.2 gallon keg), questions should be raised or bar owners should opt for a different brand.

How about our friend Weihenstephaner, which by the way, also hasn’t gone up a cent in more than a year.

I end this mini-rant by confirming that I do believe that the raw materials situation requires some price increases and that breweries should, to the extent possible with competition, seek to follow the example of industry leader Anheuser-Busch and occasionally institute modest price increases (versus stagnation for more than a year). But when a brewery’s prices jump substantially more than their competitors, consumers should be alerted to the red flags.

Moreover, I also believe that the actions of some greedy bar owners are causing the public’s perception of the hop/malt/gasoline/glass shortages to hit “crisis? levels. To be clear, a 500-percent markup on beer is robbery, not in the sense of someone holding a gun to your head and making you order the pint (14 ounces), but in the sense of robbing respect from the client and dollars from his wallet. In the long run, it’s also bad for business as smart consumers aren’t likely to order a second beer or linger at a place with $7 12 ounce glass prices. In The Good Beer Guide to New England,? I defined a “great beer bar? as an establishment which has “an extraordinary selection of craft beers, respects their clients in terms of keeping prices fair, holds events promoting craft beers (from beer dinners to brewer meet-and-greets), makes craft beer key to their business, and also offers true character as pubs.? While I used to enjoy Bukowski’s and still occasionally stop by for a single pint (or 12 ounce pour as it now may be), it never came close to making my shortlist for inclusion in the book because of its abusive price relationship with its customers. I’d hate to see more bars follow its unfortunate lead.

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