We’ll start with tax.
“The Internal Revenue receipts for malt liquor taxes for the calendar year 1935 were as follows:—
Journal of the Institute of Brewing, Volume 42, Issue 5, September-October 1936, page 416.
Dollars. £ Sterling. Licence fees paid to the Government by brewers, wholesale and retail dealers 4,412,701.84 900,551 Tax paid by brewers to U.S. Government 226,119,065.81 44,105,932 230,531,767.65 45,006,483
40-odd million quid sounds like a lot of tax. Until you put it into context. Guess how much tax British brewers paid in 1936? £55,451,926*. But they taxed the hell out of beer back then. Still do, now I come to think about it.
Now onto costs:
“Cost of Beer in America.—According to a study made by the United States Brewers' Association of costs at forty-four breweries, the following figures are typical but do not include State Revenue taxes, delivery costs, interest or discounts:—
Approximate per English barrel. Dollars American barrel £ s. d. Cost of production 3.932 1 2 6 Selling 1.440 8 3 Administration 0.834 5 0 Federal tax 5.0 1 8 6 11.206 £3 4 3
Journal of the Institute of Brewing, Volume 42, Issue 5, September-October 1936, pages 416 - 417.
One handy feature of brewing records of the interwar period is the inclusion of prices and costs. Courage lists costs particularly well, even calculating the cost per barrel:
Production cost (including tax) of Courage beers in January 1936 | ||
Beer | OG | cost |
KKK | 1072.8 | £6 11s 7d |
XXX | 1053.1 | £4 9s 10d |
X | 1031.1 | £2 8s 11d |
C | 1027.8 | £1 19s 6d |
Source: | ||
Courage brewing record held at the London Metropolitan Archives, document number ACC/2305/08/262. |
The beer we need to concentrate on is XXX as that’s the closest in strength to American beers. If we just take the cost of production and tax for the American beer, it comes to a total of £2 11s. Or not much more than half the cost of XXX. The difference is even bigger as the Courage figures don’t include labour costs, just materials and tax. It’s clear that beer was far cheaper to produce in the USA.
Why? The materials costs may give us a clue
“The cost of the principal brewing materials are lower than in this country, figures from
market reports in December, 1935, being as follows, with approximate British equivalents:—
The import duty on hops is 24 cents per lb. or about £5 10s. per cwt., and that on
American prices. British equivalents. Barley 60-80 c. per bushel, 48 lb. 23s.-30s. 448 lb. Malt 1$ per bushel, 34 lb. 40s. per quarter Hops (American) 10-20 c. per lb. 46s.-92s. cwt. (imported) 50 c.- 1$ lb. £11-23 cwt. Corn sugars 2.5-3.5 $ 100 lb. 11s. 6d.- 15s.6d.cwt Grits 1.85-2.5 $ 100 lb. 8s.- 11s. 6d. cwt. Rice 2.5$ 100 lb. 11s. 6d. cwt.
malt 14 cents per bushel of 34 lb. or about 6s. per quarter.”
Journal of the Institute of Brewing, Volume 42, Issue 5, September-October 1936, page 417.
How much cheaper were raw materials in the US? Lots.
UK materials costs in 1936 | |
PA malt | 59s-68s per quarter |
UK hops | 225s - 261s per cwt |
flaked maize | 8s per cwt |
invert sugar | 29s - 30s per cwt |
Source: | |
Barclay Perkins brewing record held at the London Metropolitan Archives, document number ACC/2305/01/621. |
Malt was 50% cheaper, sugar and hops less than half the price. Only maize was oddly slightly more expensive in the US. Don’t understand that one.
“A rough average price for beer is $15 per American barrel or about 80s. per British barrel, while beer retails in 12-oz. bottles at 3 bottles for 25 cents or about 1s.”
Journal of the Institute of Brewing, Volume 42, Issue 5, September-October 1936, page 417.
Let’s see how that stacks up with British prices:
Wholesale price of Whitbread draught beers in 1936 | ||
Beer | gravity | price |
Porter | 1029.9 | 94s |
Stout | 1046.9 | 134s |
Light Ale | 1028.4 | 76s |
X Ale | 1035.6 | 94s |
Pale Ale | 1048.2 | 134s |
33 | 1060.6 | 140s |
Sources: | ||
Whitbread brewing records held at the London Metropolitan Archives, document numbers LMA/4453/D/01/102 and LMA/4453/D/09/125. | ||
Whitbread wholesale price list. |
The closest in gravity to American beers are Stout, Pale Ale and 33 – which 56s to 60s more.
The retail prices of bottle beers show the exact opposite:
Retail price of Whitbread bottled beers in 1936 | ||
Beer | gravity | price 3 X 12 oz (cents) |
London Stout | 1046.9 | 24 |
India Pale Ale | 1037.6 | 21 |
Double Brown | 1053.3 | 27 |
Sources: | ||
Whitbread brewing records held at the London Metropolitan Archives, document numbers LMA/4453/D/01/102 and LMA/4453/D/09/125. | ||
Whitbread wholesale price list. |
Next time we’ll be looking at the beers being brewed in the US.
* 1955 Brewers' Almanack.
4 comments:
If I am reading your table on production costs for ingredients, adjuncts like corn sugar and grit were a bit more expensive than malt, so I wonder where the thing about using them to make beer cheaper to brew came from?
Alistair,
not really. A quarter of malt is the equivalent of 2 cwt. of sugar. So in the US, 23s to 31s for the equivalent of a 40s quarter of malt. With maize and rice, it's 3 cwt to the quarter. So 34s 6d for the equivalent amount of rice to a quarter of malt, 24s to 34s 6d for maize.
In the UK, maize was way cheaper than malt: 24s compared to 59s-68s for malt. Sugar was much closer, but stil a little bit cheaper on average: 58s-60s.
Regarding the bottle beer, the text states in the US it was 3 bottles for 25 cents. So if the table showing the price in the UK is per bottle, the prices are about the same. Or am I reading that wrong?
Dan,
I completely missed the 3 bottle thing. I thought it seemed weird. Must have been in a rush.
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