Why the German Domination?

Many have wondered why for so many years the U.S. has had so many "tasteless" mass brewed beers while imports--particularly German imports--were of such high quality and in so many varieities. After all, Germany is a far more homogenous country than the U.S. (true, Bavarians who hate Prussians might quibble with that, but they have far more in common with one another than say Minnesotans of Scandanavian ancestry versus New Yorkers of Jamaican extraction), and the U.S. is a much larger country with far more beer drinkers (if arguably these beer drinkers consume less per person than the Germans). One would think that Americans would have far greater variety of beer, and the increased competition would favor much higher quality beers, than the Germans enjoy. (Plus, German-Americans are the largest single ethnic group in the U.S., so it's not as though these immigrants would have no idea that good beer exists).

One possible reason for this is articulated in Tim Harford's book "The Undercover Economist" where he discusses scarcity value and explains that German law not only upholds strict, ancient beer-purity standards, but also prevents combination of the breweries located in each of the small regions of Germany, giving each local brewery a lot of monopoly power in its domain. The result is many small breweries that have to compete with one another in the national marketplace, and an inability to create a larger monopoly that could wipe out small upstarts going against the big guys. No single German brewer has the power of say Budweiser (the larger German breweries like Becks have a much smaller percentage of the overall German market compared to Bud or Miller here), and so between that and the purity laws, the quality has to be maintained over a long time.

Contrast that with the U.S. By the late 1800s and early 1900s, large breweries like Miller, Pabst, and Budweiser had been able to monopolize and crowd out the smaller ones, and the mass-brewing process meant that the lighter pilsener-style lagers that the Northern and Eastern European immigrants often prefered could be sold in mass quantities at a good profit. Then, with Prohibition, the less profitable breweries--which didn't have the means to shift to non-alcoholic beverages like Bud did for a while--had to go under, and with its repeal, the big guys got rolling again. At this point, there were still regional monopolies--like for instance Yeungling in PA, Coors in the West and Genessee in upstate NY--but after WWII Budweiser used mass marketing and near dominance of the South (being a St. Louis brewer, the Bud folks realized that the South didn't have major breweries, as many counties down there were still "dry", which meant that they were really the nearest brewer and could control the distribution networks there) to their advantage. GI's who were stationed in southern bases away from home found they could not get their beers from home, but that Bud was available, and so they developed a loyalty to the "King of Beers" which they maintained after the war. Also, Bud marketed in a big way at sporting events, and as televised sports took off, this cemented their market share. The remaining regional breweries became second bit players, and American beer drinkers had mostly a taste for the big mass brews--all as a result of what was available for decades. Imports didn't really take off here, because beer drinking was seen as more of a working class thing at that time, and the types of people who would pay more to drink a quality alcoholic drink were more likely to have wine or whisky.

So essentially, different laws and economic developments explain the main difference between German and American breweries. But things have been changing--in the late '70s, the laws in the U.S. changed to allow limited home brewing, which enabled a lot of Americans to try ales and quality lagers that they or their friends would make, and before long new upstarts would create microbreweries to capitalize on these new tastes. Today a lot of smaller American breweries can compete with the quality imports, and the wider availability of good beers at bars and supermarkets have enabled even old Bud drinkers to try the new stuff--and even Bud is coming out with "premium" beers (haven't tried them yet) which are meant to appeal to the more discriminating crowd. All of this is a welcome development--whether you like the lighter, mass brewed stuff or the craft brewed finery, the extra choices can only be a good thing--and hold true to the American ideals.