Maintaining the Regulatory Big Pitcher

Feeling thirsty? Consumers across the world drink nearly 190 billion liters of beer each year—the equivalent of 76,000 Olympic-sized swimming pools. With a global market worth over $600 billion last year, the beer industry is expected to grow as consumers continue to guzzle one of the oldest drinks on earth. The Sumerians of ancient Mesopotamia are the first society known to produce beer, although historians suggest beer likely existed much earlier. Beer is an alcoholic drink made from fermented cereals such as barley and flavored with hops. Because the fermentation process killed bacteria, beer was often safer to drink than water and was prevalent throughout several ancient civilizations. The earliest known beer recipe, the “Hymn to Ninkasi,” is etched into a 4,000-year-old cuneiform tablet and continues to serve as an inspiration to some modern-day brewers. Since those first batches thousands of years ago, the recipe for beer has been tweaked and tinkered with to create dozens of styles and flavors that range from citrus and fruity to caramel and chocolate. In the United States, the Alcohol and Tobacco Tax and Trade Bureau, a division of the U.S. Department of the Treasury, mostly regulates beer at the federal level. The Bureau of Alcohol, Tobacco, Firearms and Explosives, a division of the U.S. Department of Justice, maintains some regulatory compliance authority as well. There are over 100,000 federal regulations that affect the American beer supply chain. In addition, each state maintains jurisdiction over beer production and distribution within its borders and there is substantial regulatory variation among the states. For instance, South Dakota has the fewest additional regulations with only 1,177 while California leads with over 25,000. Complying with these regulations can leave breweries feeling hungover. Despite the complexities of navigating both federal law and a patchwork of state regulations, craft breweries—smaller and independent breweries—continue to barrel forward. The rise of beer has sprouted a host of other industries as well, such as Brooklyn-based TapRm that uses a unique licensing structure to distribute hard-to-find brands across states. In this week’s Saturday Seminar, scholars discuss competition in the beer industry, the rules surrounding advertising beer, and how regulations have allowed the craft beer industry to thrive