Marin Institute

With the recession food and beverage prices have dropped some to match the dip in consumer spending. Makes sense. So why then is the cost of beer going up? According to a recent MSN Money article, Why Every Cold Beer Costs You More, the biggest beer companies--MillerCoors, Anheuser-Busch InBev, and Pabst Brewing--have increased their prices by nearly 4 percent so far this year, and they expect their prices to continue to climb through the remainder of 2009. These brewers say the increase is paying for “...profit growth and pricier commodities used to make beer."

Paying for profit growth? Sounds like circular reasoning to me. As for pricier commodities, in an article called, Is Beer Price Increase Justified?, Bob Zieger, a sourcing expert, "takes issue with the idea that 'general commodity prices' are behind beer price increases. After all, beer is not made from a combination of pork bellies, copper and cocoa. Its key price drivers, like hops and barley, are actually not experiencing a serious price increase right now." Zieger said.

The real reason for the price hikes is a tad more embarrassing: skyrocketing executive pay. According to the MSN article, compensation for Bud executives rose by 92 percent: "The top 13 executives made $73 million in the first half of 2009, or $5.6 million each, on average -- up from $38 million a year before." This is on top of a 79 percent pay increase in 2008.

Not to be outdone, "Molson Coors chief Peter Swinburn got a 120 percent pay increase in 2008. And Boston Beer chief Martin Roper saw his pay go up 28% last year to $2.75 million." Not too shabby during the worst recession in decades.

Now don’t get me wrong; of course Marin Institute has long advocated for higher alcohol prices as an effective strategy for curbing underage drinking and over-consumption. We just think these profit-hungry beer companies need to be called out for their utter hypocrisy.

Despite its price increases and hefty profits, Big Beer continues to fight tooth and nail against any tax increase proposals at the state or federal levels. The alcohol industry has successfully defeated tax hikes by touting the myth that any increases would hurt their bottom lines, as well as poor “Joe Six-Pack.”

But Big Beer isn’t really worried about its customers paying too much for their beer because of higher taxes. The top dogs at Anheuser-Busch InBev and MillerCoors want you to pay more for your beer, without their having to pay more taxes, so they can improve their own bottom lines instead.

But if the beer industry is going to hike prices anyway, why not have the profits go to offset the harm its products cause, instead of lining executives’ wallets?