A comprehensive look at how the “three tiers” affect craft beer prices
“Sometimes we’ll put an extra margin on a case of beer, so we can bring the price of a keg down,” says Chris Turner, sales manager at Hop & Wine, one of the larger import and craft beer distributors in the area. “Say fake brewery Duff comes to us and they want to be a competitive player in the India Pale Ale (IPA) category,” Turner explains, referencing the phony beer brand from The Simpsons. “Let’s say Duff’s IPA costs us $120 a keg. If we use the standard markup that keg would be pretty expensive for our customers. But maybe Duff has a beer in bottles that is only $48 a case and the category average is $50. Since we sell so many more cases than kegs, if we mark up the cases a bit we can sell the kegs at a lower price and make the margin up that way. It’s little tiny amounts, fifty cents here, a dollar there. These things make a huge difference in the distributor world and a little money adds up to a lot over time.”
via D.C.’s Economies of Ale: Why Is Craft Beer So Expensive Here? – Washington City Paper.
