How cheap exactly is beer?

[Rod1]

NAFTA

MEXICAN FANS OF US BEER MUST WAIT 8 YEARS FOR NAFTA TO LOWER PRICES
ROBERT L. KOENIG | Aug 16, 1992 8:00PM EDT

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Loyal Budweiser drinkers in Mexico City may be raising a toast to the North American Free Trade Agreement - but it could be years before they see much of a drop in their bar tab.

That's because it would take eight years after the trade pact goes into effect before Mexico's 20 percent tariff on U.S. beer is eliminated. The tariff would drop gradually between now and then.Meanwhile, those who have a taste for Mexican beer won't see much difference at the supermarket checkout line when they buy six-packs of Corona, experts say. That's because the U.S. tariff on Mexican beer - which also would be eliminated under the trade pact - is now less than 2 percent.

While Anheuser-Busch Cos. and other big breweries said they welcomed any reduction in the Mexican beer tariff, some officials were a bit disappointed that the trade pact takes eight years - rather than the five years some U.S. brewers sought - to eliminate it.

"Mexico's 20 percent tariff on imported beer is far higher than it imposes on any other import and double its weighted average for all imported products," said Stephen K. Lambright, vice president and group executive of Anheuser-Busch in St. Louis. "This puts American beers at a severe price disadvantage in the Mexican market."

Mr. Lambright said the brewery had backed "efforts to quickly eliminate that (Mexican) tariff."

A congressional source said the pact's beer provisions - one of the final details to be ironed out by negotiators - would lower the Mexican tariff on beer to 16 percent for the first two years but will reduce that tariff only gradually until the eighth year. The U.S. Trade Representative's office could not provide details.

"Eight years is a ridiculously long time to get that beer tariff down," said House Majority Leader Richard A. Gephardt, D-Mo. "Corona and a lot of other Mexican beers make lots of money in our market; I think our beers ought to have an equal footing in Mexico sooner than this trade agreement provides."

According to U.S. Commerce Department statistics, Mexico shipped 42.5 million gallons of beer to the United States last year, while U.S. beer producers sent 5 million gallons of beer to Mexico. The top-selling Mexican beer here is Corona, trailed by Tecate and Dos Equis.

Anheuser-Busch officials, citing proprietary reasons, declined to say how much beer the brewery sells in Mexico. But an industry source said Anheuser- Busch sells more beer there than any other U.S. brewery, with Miller Brewing Co. of Milwaukee ranking second. A spokeswoman for Coors Brewing Co. in Colorado said Coors does not sell much beer south of the border.

Once the Mexican tariff drops significantly, Anheuser-Busch expects to sell more Budweisers in Mexico. The brewery introduced Budweiser to Mexico in 1989 through an export agreement with Modelo SA, the largest Mexican brewer.

A recent Anheuser-Busch publication said, "Budweiser continues its strong performance" in Mexico. But one industry analyst said, "The Mexican tariff has held down sales by raising Budweiser's price. There is a big potential market in Mexico for U.S. beers because Mexicans seem to like light-tasting beers rather than heavier European beers."

Richard Klemp, director of government affairs for Miller in Milwaukee, said Mexico "is obviously a growing market, and we look forward to expanding there."

Mr. Klemp said Miller officials "would have preferred that the Mexican beer tariff be eliminated as quickly as possible."

Miller now distributes its beers in Mexico through a Mexican tequila company, Mr. Klemp said. While the trade pact is a long way from final approval, he said, "It is likely that, in the long run, American beers would be priced more competitively in Mexico."

NAFTA doesnt makes products exempt from local taxes, only tariffs.

 

[Rod1]

The cost for beer is almost entirely labor, so obviously it would be cheap in places where labor is cheap.

If you go off of GDP per capita, beer should be 7 times cheaper in mexico, which makes $5 for a 12 pack expensive.

What? this is absolutely not true, from the raw products to the actual brewing process its all bulk.

 

[Loiosh]

NAFTA doesnt makes products exempt from local taxes, only tariffs.

Are you saying you don't think it makes a HUGE difference?

Clearly something is.

 

[Rod1]

Are you saying you don't think it makes a HUGE difference?

Clearly something is.

If you mean it could be more expensive, well sure, it would make a difference.

That doesnt changes the fact that a beer canned in the US is US$0.31 before taxes when i buy them at the beer store.

Now the cans themselves are recycled at around 2-3 cents a piece, that means new cans are probably around 6-8 cents.

That means around US$ 0.25 cents for production and all the transport and retail plus profits.

Budweiser says in the can that its quite expensive to brew, but im sure that its probably cheap as fuck to make.

 

[Idonotbelieveit]

I drink cider now

Same as beer lager price pretty much

10 pound for a pack of 10 3 pound for a pint

 

[Loiosh]

If you mean it could be more expensive, well sure, it would make a difference.

That doesnt changes the fact that a beer canned in the US is US$0.31 before taxes when i buy them at the beer store.

Now the cans themselves are recycled at around 2-3 cents a piece, that means new cans are probably around 6-8 cents.

That means around US$ 0.25 cents for production and all the transport and retail plus profits.

Budweiser says in the can that its quite expensive to brew, but im sure that its probably cheap as fuck to make.

From "The U.S. Brewing Industry" by Victor and Carol Horton Tremblay,
MIT Press, 2005.:
Average cost to brew one barrel of beer (in 1982 dollars)is
approximately $65 per barrel. (Graph interpretation)

In 2000, premium beer (like Budweiser and Coors) was priced at $15.15
per case.(in nominal dollars)

The price-cost breakdown of mass produced beer in 1996: (Consumer Reports, 1996)
Retail and distributor markup 36.4%
Taxes and Shipping 17.2%
Packaging 16.5%
Labor and Production 11.7%
Advertising and Management 8.2%
Brewer Profit 6%
Ingredients 4%

Cost breakdown for Mass-produced six-pack (in 1996):
Ingredients .16
Labor and production .47
Packaging .66
Advertising and Management .33
Brewer profit .24
Retail and distributor markup 1.46
Taxes and shipping .69
Total $4.01
A six pack is 72 oz by volume, a case is 2.25 gallons by volume, There
will be 13.7777 cases in a barrel, or 55.11 six packs.

 

[Rod1]

From "The U.S. Brewing Industry" by Victor and Carol Horton Tremblay,
MIT Press, 2005.:
Average cost to brew one barrel of beer (in 1982 dollars)is
approximately $65 per barrel. (Graph interpretation)

In 2000, premium beer (like Budweiser and Coors) was priced at $15.15
per case.(in nominal dollars)

The price-cost breakdown of mass produced beer in 1996: (Consumer Reports, 1996)
Retail and distributor markup 36.4%
Taxes and Shipping 17.2%
Packaging 16.5%
Labor and Production 11.7%
Advertising and Management 8.2%
Brewer Profit 6%
Ingredients 4%

Cost breakdown for Mass-produced six-pack (in 1996):
Ingredients .16
Labor and production .47
Packaging .66
Advertising and Management .33
Brewer profit .24
Retail and distributor markup 1.46
Taxes and shipping .69
Total $4.01
A six pack is 72 oz by volume, a case is 2.25 gallons by volume, There
will be 13.7777 cases in a barrel, or 55.11 six packs.

And i bought 2 six packs for $5 dollars, $2.5 a piece.

So either they found a way to cut their costs by 3/4ths or maybe they are dumping beer in the Mexican market for some reason.

 

[Idonotbelieveit]

It's over 20 bucks for a 6 pack of buds here.

Damnn

How Popular is fosters over there

Sells alot in uk but my mates that went to auz said it Isnt popualr

 

[DrVanNostrand]

Damnn

How Popular is fosters over there

Sells alot in uk but my mates that went to auz said it Isnt popualr

No one drinks fosters. No pubs sell it. It is similar to some of the Australian mainstream beers in taste though

Last time I had it was on a cruise in Hawaii actually but that was because they sold big oil cans of it

 

[Idonotbelieveit]

No one drinks fosters. No pubs sell it. It is similar to some of the Australian mainstream beers in taste though

Last time I had it was on a cruise in Hawaii actually but that was because they sold big oil cans of it

Yeah heard it isnt popular

Wonder why its advertised so much over here

I only drink it in one pub i go but i do enjoy it

 

[Eazy123]

Walgreens Big Flat beer - 50 cents a can

Apparently it tastes like it too

 

[Loiosh]

And i bought 2 six packs for $5 dollars, $2.5 a piece.

So either they found a way to cut their costs by 3/4ths or maybe they are dumping beer in the Mexican market for some reason.

Found once, or that's a relatively static price?

There are so many reasons it could have been that cheap, the best we could hazard would be incredibly wild guesses.

 

[Cubo de Sangre]

And i bought 2 six packs for $5 dollars, $2.5 a piece.

So either they found a way to cut their costs by 3/4ths or maybe they are dumping beer in the Mexican market for some reason.

They could be taking a loss to increase market-share. Then elevate the price incrementally as the develop their following. Or not. I don't know.

 

[JSN]

Nope, it says made in the USA in the can.

Mexican beer is actually more expensive than American beer, and there is a huge ass Corona plant in my city.

eww don’t they make that shit with Mexican water? Does the alcohol kill all the diarrhea bugs?

 

[Rod1]

Found once, or that's a relatively static price?

There are so many reasons it could have been that cheap, the best we could hazard would be incredibly wild guesses.

Its a promotion that has been running for a while at the Corona expendios.

 

[Rod1]

They could be taking a loss to increase market-share. Then elevate the price incrementally as the develop their following. Or not. I don't know.

Its Anheuser Busch they control half the market since thwy bought Grupo Modelo.

 

[Rod1]

eww don’t they make that shit with Mexican water? Does the alcohol kill all the diarrhea bugs?

Mexican water is best water

 

[JSN]

You’re trying to trick me into getting Montezuma’s revenge

 

[nostradumbass]

I think it's like 9 bucks for a sixer at the store here. The trick is to get in good with bartenders so you can drink like 4 or 5 and only get charged for 1. I don't think there's any such thing as being friendly with a gas station attendant and getting a deal on anything.

 

[nostradumbass]

I think it's like 9 bucks for a sixer at the store here. The trick is to get in good with bartenders so you can drink like 4 or 5 and only get charged for 1. I don't think there's any such thing as being friendly with a gas station attendant and getting a deal on anything.