June 3, 2014

Trouble Brewing for Craft Beer

Matthew D. Mitchell

Senior Research Fellow

Christopher Koopman

Senior Affiliated Scholar
Summary

All entrepreneurs face hurdles in starting their businesses, but craft brewers face a unique set of challenges which both undermine consumer welfare and privilege some in the industry at the expense of competition and innovation.

Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Craft brewing is more popular than ever. Even President Obama is brewing his own beer. However, if you sit down with the people who are brave enough to turn this hobby into a commercial enterprise, it won’t be long before you hear about the obstacles they face getting their product into the hands of thirsty consumers. All entrepreneurs face hurdles in starting their businesses, but craft brewers face a unique set of challenges which both undermine consumer welfare and privilege some in the industry at the expense of competition and innovation.

Recently, Evan Feinberg of Generation Opportunity described some of the barriers craft brewers face. In one instance, a brewer — who does not prepare any food — was told he had to install a hood for a food oven that he did not even own. Another brewer — who does not use poultry in his beer — was nearly kept from operating because he did not have the equipment to handle raw chicken.

Brewers face multiple regulations and multiple regulators at the federal, state and local levels of government.

Continue reading