Sunday, January 15, 2017

When people don't understand beer, or economics, but get to write about both.

A former insurance salesman... okay, executive, who seems to have some people in this city believing that he understands business, wrote a very ill informed opinion piece about the craft brewing industry in Nova Scotia in this weekends paper that shall remain nameless. He sounded like a shill for "molbatt's".  But enough idiots are out there (see Canadians for Trump) that this warrants a response to try to ward off anyone taking this guy seriously.

Here is what he wrote:     Bill Black being a knob

Mr. Black needs to learn a bit about what he is pontificating on.

Most (by a large margin > 90%) of the beer consumed in NS is made by companies owned outside of Canada. We send money from our economy to theirs for something we can make better here. Has Mr. Black ever heard of the concept of import substitution? No, he probably never read Jane Jacobs, because he is an old white man.

One measurement I invite anyone to make is to calculate the jobs/litre that craft beer production creates compared to factory beer. And where those jobs are located. We have spent (blown) so much government assistance trying to force feed companies looking to set up in locations where they have a geographic disadvantage. But these new breweries are selling much of their product close to home, keeping all the money spent on beer consumed in their community (something that won't be stopped, even with prohibition) and the jobs created by making and distributing it, in that community. This is one of our very few industries where the majority of businesses are not in the metropolitan area.

Another factor seldom discussed, and possibly not well researched, is the almost certain benefits to the public health that craft beer provides in comparison to the alternative. Start with the (safe) assumption that people are going to drink beer, regardless of what you tell them is or isn't good for them. Craft beer consumption differs substantially from factory beer in several interesting ways.

The density, intensity of flavour, and "filling" aspects of craft beer almost always slow intake of alcohol compared to the almost frenetic drinking associated with factory beer and youth. Less total alcohol is ingested, and it is usually done so over a longer time period. This, over a lifetime, should result in less alcohol related health problems, and lower average degrees of intoxication that causes accidents - whether walking or driving.

The distribution of the craft beer production around the Province tends to encourage the direct purchase of local beer at the breweries, or at local shops or farmers markets. And it has triggered the opening of more local pubs. By definition, this will decrease the lengths of vehicle trips taken by people who have consumed beer or are on their way to do so. Those trip lengths will switch to walking or inexpensive cab trips and reduce the overall number of "drunk driving kilometres". Less time behind the wheel means less chance of an accident - drunk or sober.

The contents of a chemical free craft beer - normally water, malted and un-malted grains, yeast (AKA Vitamin B12), alcohol and other fermentation by-products, provides sustenance, and vitamins and minerals not always present in a highly filtered, preserved, stabilized, and otherwise manufactured, standardized product made in a factory. At least two of the larger craft breweries here are 100% organic, with another making some organic beer. It is difficult to argue that craft beer is not better for you, and not just much more interesting to taste and fun to experience.

The economic benefits of the jobs in the non-urban locations is something that Randy Delorey (who is supposed to be directing the operations of the NSLC as Minister of Finance, but appears to being led around by the nose by them) and his people appear to be acutely aware of, and perhaps there is even some recognition of the potential value to our society via the concept of people drinking less, but drinking better. Nova Scotians seem to be ready to recognize this same concept for other foods, after all. And now beer is just starting to generate spin off activity in agriculture and service industry - a new maltings has opened and a bottle washing business looks to be going ahead.

One cannot help but think that these aspects of the industry go a long way to offsetting the relatively small tax loss (did anyone count the new payroll and business taxes to be paid by all these new breweries?) that seems to have gotten under this commentator's skin. In this case, we may have the rare occurrence of the Government actually understanding a business better than a "businessman". How much are we talking about compared to the subsidies given in the past to factory breweries to set up and stay here, for pulp and paper companies and mines, and shipbuilding plants (how much $/job?). Where is the consideration of the value in taking people off the unemployment line and giving them work close to their homes and families, instead of seeing them leave Nova Scotia for work?

Finally, craft beer definitely brings variety to the local beer scene. And most would agree with the old maxim that variety is, indeed, the spice of life.