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No more cheap beer? Blame hipsters

Brews like Pabst Blue Ribbon and Miller Lite have increased nearly 7% in price because of their 'retro' appeal. Wine and liquor are going up, too, but for different reasons.

By Donna_Freedman Aug 20, 2013 9:46AM
Logo: Beer (Corbis)It's not your imagination: Your bar tab has gone up. Alcohol prices increased as much as 11.2% between November 2012 and April 2013, according to a new study.

Hipsters were recently accused of killing American razor sales. Now we can go after them for skewing beer prices, too: It seems that the brew passing between those unbarbered lips isn't artisanal ale but rather Pabst Blue Ribbon.

They're showing "a retro attraction" to brands like PBR, Miller Lite and Budweiser, according to Chuck Ellis of the Restaurant Sciences market research firm.

Ellis told the National Restaurant News that despite widespread interest in craft beers, it was the "mass market" stuff that showed the highest rate of increase.

While it's easy to pick on hipsters, they aren't to blame for other alcohol price increases.

A handful of theories have emerged, including increased demand, crop failures, labor shortages, restaurants making up for lost revenue and less wine made due to recession-slowed sales.

No matter what the reason, you'll be paying noticeably higher prices for whatever kind of grog you favor. That is, unless you're a fan of craft beers.

Yes, you read that right: While the price of "sub-premium" brewskis increased by 6.8%, small-batch beers went up only 1.8%.

Willing to pay more?

Restaurant Sciences studied millions of transactions completed between October 2012 and April 2013. The firm categorized price increases by market segment: bar/nightclub and family, casual and fine dining.

Liquor went up the highest in fine and family dining (more than 11% and 4.5%, respectively), with no increase in the casual dining and bar/nightclub sectors.

On the other hand, wine prices shot up 8.4% in family-friendly eateries and 5.4% in white-tablecloth establishments.
The Los Angeles Times suggests this is due to shrinking wine inventories and the growing trend of "targeting younger drinkers, offering labels with sassier names, relaxed tasting events and easy-drinking wines."

It's certainly worth the effort: Some $289 million worth of wine is sold in restaurants every year.

What's a drinker to do?
A cold beer with friends, fine wine at an elegant meal or a high-end scotch on a winter evening aren't necessities, obviously. But they're life-enhancing experiences and some people are willing to pay more for them.

Maybe a lot more. "North Americans are buying more from the top shelf than drinkers elsewhere," notes Kyle Stock of Bloomberg Businessweek.

Diageo, a company that owns many brands of potent potables, reports that North America is responsible for 40% of its profits but only about 30% of its sales. Top performers are Bulleit bourbon and high-end firewaters like Johnnie Walker Blue Label, which sells for as much as $200 a bottle. The company increased its prices from 7% to 10% but drinkers "didn't seem to notice, with sales by volume remaining steady."

Ellis theorizes that recession-related losses have led restaurateurs to increase prices: "I think (they're) coming out of three and a half years of tough times where they had to eat a lot of margin."

Fine-dining establishments were particularly slammed during the recession, he notes, and these eateries' average drink prices have gone up "with a vengeance."

Apparently some consumers are willing to pay for what they most want. The rest of us will be hitting happy hours and watching for social media vouchers that will at least cut the cost of appetizers or dinner, to help make up for the pricier rotgut. Or we'll be bringing our own wine and cheerfully paying the corkage fee versus $11 a glass for somebody else's grape juice.

Readers:
Have you noticed the price increases? At what point will you stop buying alcohol when you're out on the town?

More on MSN Money:

92Comments
Aug 20, 2013 3:27PM
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Ahh, PBR. Many a night dedicated to PBR and Busch beer drinking and Allman Brothers listening. Hard to believe I'm sitting at a desk with a tie on right now.

I want the good ole days back so I can burn this tie.

Aug 20, 2013 2:59PM
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Same reason gas prices and everything else have gone up....GREED!
Aug 20, 2013 2:25PM
Aug 20, 2013 3:18PM
Aug 20, 2013 2:44PM
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In heaven there is no beer, that's why we drink it here.
Aug 20, 2013 4:45PM
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I hated Hipsters before the internet did. You probably didn't even hear about me.
Aug 20, 2013 3:27PM
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In the 80's you could get 6 packs of 16 oz Rainier beer for $1.69...
Aug 20, 2013 3:23PM
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It's going up for the same reason food is going up. It takes grain to make beer. Grain is going up in price. So up goes the price for beer. It isn't rocket science people. Has nothing to do with hipsters.
Aug 20, 2013 4:25PM
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When did Budweiser become retro??  Does that mean I'm cool now?
Aug 20, 2013 2:36PM
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I guess there used to be cheap beer somewhere, but never in CT. Burp!
Aug 20, 2013 4:42PM
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While I dislike hipsters, this just can't be the reason. Hipsters aren't the only ones who drink beer.  As much as everyone else has jacked up their prices, of course everyone would start drinking cheaper beer.
Now that the cheap brands see their sales improving, greed takes over.
Aug 20, 2013 3:19PM
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They are blaming the beer prices on "hipsters" and completely ignoring the fact that virtually all of the beers are now owned by just a few large corporations.

That "craft" beer you think you are drinking, is now owned by a giant conglomerate which controls pricing on everything from grains to aluminum, competition is a figment of your imagination.

Aug 20, 2013 3:50PM
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Is cheap beer, like Red, White and Blue, Blatz and Milwaukee's Best still available?  The brands mentioned in the article are mid-priced as far as I am concerned.  Cheap only when compared to premium brands and craft beers.
Aug 20, 2013 4:22PM
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For what the restaurants charge now for their meals and alcohol, it is now cheaper to hire a maid/cook for the day to cook a meal, serve it and pour the wine for you and the friends.
Aug 20, 2013 3:45PM
Aug 20, 2013 3:34PM
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Suds and Duds,

There is no reason for beer prices to have escalated to where they are now. For low volume 'craft' beers or similar specialties, possibly yes, but overall its simply a matter of greed, and very akin to the escalating gasoline prices. Due to cost I had to give up on purchasing my traditional favorites like Anchor Steam, Peroni, Spaten, Becks and Dos Equis, and now go to the local Sprouts Market where their daily special is PBR at a rather amazing $ 4.49 a six. Not elegant... but still rather drinkable.

Peace to all ~

Aug 20, 2013 5:08PM
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One influence on higher beer prices was the consolidation of the major breweries over the past ten years:  there are fewer major beer companies than ten or even five years ago.  Budweiser, the American iconic beer, was bought out by a Euro conglomerate; the major Canadian breweries bought out too.  Coors was bought out. There are only 2-3 major beer companies in the world today.  Monopoly companies can raise prices.  Even many of the "craft" beers are made by the monopoly companies--check out where the beer is bottled.

 

 

 

The article indicates the higher liquor prices all occurred at upscale restaurants and family restaurants and this indicates to me that mixed drinks are now more popular (like martinis) and these restaurant owners like this article says are socking it to the customer.  Liquor and beer are by far the most profitable items sold in restaurants.

 

I have noticed myself that a mixed drink in the middle scale restaurants I frequent are costing over $6-8 per drink and often I can't even taste the liquor.  I suspect some of them may be shorting the shot of liquor and adding more fruit juice, water and ice.  

Aug 20, 2013 3:51PM
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Thank god I can still find a 30 pack of Buds for under $20.00, that's $0.666 a beer...good deal.
Aug 20, 2013 4:29PM
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How come two days ago this same web site had an article about how A-Busch, and Miller are  increasing ABV % because sales of their products are declining due to increased demand of quality craft brews??? It MUST be true, I saw it on the internet. If you want to "stay thirsty" or drink cheap beer. Drink whatever comes in a clear bottle, whatever comes with fruit slices or whatever comes from South of Texas. If you want big boy beer, it wont be cheap.
Aug 20, 2013 5:11PM
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I buy a bottle of Johnny Blue every winter.  I usually drink Johnny Black, but in the winter I can justify the additional cost when I am sitting outside and the gulf is stormy with cold winds blowing.  It just fits.
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