There’s a lot of speculation of what beer in the USA might have been if Prohibition never happened. What if Prohibition never happened? What would American beer culture be like today? Here are my thoughts, but first some background.
The American Prohibition Act of 1920 devastated American beer businesses. It changed the landscape and mapped out a course that has brought us to beer in 2013 USA. Prior to 1920 the irresponsible manufacturers’ and consumers’ behavior related to alcoholic beverages behavior helped lead to Prohibition.
After many decades of campaigning by “temperance” organizations, the 36th state ratified the 18th Amendment in January 1919. Congress voted its approval in October 1919, prohibiting the manufacture, sale, transport, import, or export of alcoholic beverages. The law went into effect as the National Prohibition Act in January of 1920. Thirteen years later on December 5, 1933, the 21st Amendment repealed the 18th Amendment.
The immediate effect of Prohibition in 1920 was that alcohol consumption declined, hundreds of thousands of jobs were lost. The period during Prohibition was marred by an increase in illicit liquor and beer, no tax revenue generated from sales, and the emergence of a network of organized crime making millions of dollars in bootlegged alcohol.
Interestingly the emergence of illegal and clandestine drinking places called speakeasies helped liberate women. Before prohibition women generally did not frequent bars and saloons for casual socializing.
When the 21st Amendment was passed repealing Prohibition it tried to assure that there would be separation of independent business relationships between manufacturer, distributor and retailer by giving states rights to regulate alcohol beverage laws. The amendment was constructed to help avert the “legacy” behavior of manufacturers who when allowed to own distribution and retail stores, saloons, pubs, bars etc. were reportedly quite abusive to society.
Now there are about 2,400 brick and mortar breweries in the USA. They are all still very much influenced by the 18th, 21st amendments and the circumstances that led to the upheaval of prohibition.
Many beer drinkers celebrate this current golden age of beer in the USA. But the question often arises: What would it have been like if there was never any prohibition? Most imagine an even more glorified world of American beer. But I don’t think so.
If Prohibition never happened…
Most beer enthusiasts focus on the “bad” of Prohibition. I find myself very sympathetic to the “bad.” Would I have suffered? Probably not, I’d have brewed my own just as I do now. Indeed 1920-1933 must have been dismal years for beer drinkers seeking diversity and flavor.
How would the American beer business have evolved if there was no Prohibition? I don’t think good things would have happened and I don’t think we’d be enjoying the time now celebrating 2,400 breweries.
Breweries would have consolidated just as they did in the 60s, 70s and continue to do today. There would have come a time when fewer and fewer brewing companies controlled more and more of the beer market and breweries would have continued their control of drinking places (bars, saloons, pubs, restaurants, etc) and distribution. The choices offered to the beer drinker would have diminished to hardly any choice at all. What happens under these circumstances is evidence is in Europe today. One only has to go to there and visit a restaurant or any bar – most are owned, controlled or under a legit (or illegit) contract with a brewery to serve their beer. It’s really tough for a small and independent brewery to distribute and get their beer to beer drinkers. The same situation exists in Asia, South and Central America and Africa.
If Prohibition hadn’t happened eventually the American brewing industry (and it would have been industrial in the truest sense of the word) would have come under the draconian scrutiny of American lawmakers and society. With small breweries taken out of the picture through complete control of the distribution and retail sectors, the face of brewing would be, actually faceless.
Would truly responsible enjoyment of beer have evolved? Or would the specter of ruthless competition with cheaper and cheaper beer irked government to react with higher taxes and draconian and restrictive laws and regulations? I think so. I think without having gone through the pain of Prohibition, the American brewing and beer world would not be as vibrant, creative and exciting as it is today.
The UK never had prohibition. Their taxes are very high and there is an effective monopoly that controls retail and which beers are sold at retail. Small brewers have fared well in the UK recently with the implementation of a tax break, but take a look at history before the advent of microbreweries with a tax break. Most of the great heritage British brewers are gone; at best they are no more than labels of beer produced at convenient and efficient locations owned by large multinational corporations. Similar circumstances have evolved throughout the world.
Small and independent brewers need independent distributors to get their beer to retailers and ultimately the beer drinker. In worlds where distribution is completely controlled by the brewery – small brewers struggle and have major obstacles to growth; sometimes impossible. For the small brewer who wants to grow in excess of say 30,000 or 40,000 barrels of beer a year, they need a distribution company that specializes in warehousing, delivering and helping market their beer on a local level. The distribution business is very different than running a brewing business. The real value of any beer distribution company is established through the value of their service. It is not established through legislation. Most small brewers who want to grow need these services.
For small brewers whose business model is currently small or wants to stay small, self distribution and selling direct to beer drinker is a model that works. The ability of a small brewery to do small scale self distribution and sell bottles, cans, kegs and growlers directly to the beer drinker is absolutely essential to success and sustainability. This is a quirky exception of separating the different needs of small businesses from the need of regulating big brewing businesses.
Currently the American beer business world needs to come to grip with the fact that small scale brewery business models are very different than larger brewery business models. Allowing the smallest brewers to self distribute and sell to beer drinkers is not going to break the needed system we have that will serve to deliver 95-99% of America’s beer.
Prohibition was ugly. It resulted in a lot of really bad things. One cannot clearly conclude that it was simply in a word bad or good. Nothing is ever really “black & white.” Would the American brewing industry have self-regulated itself if there was not Prohibition? Would there be reasonable and tiered tax structure if there was not Prohibition? Would there be access to market and ability for small brewers to get their beer in front of beer drinkers if there was not Prohibition? Would homebrewing be legal if there was no Prohibition?
If there was no Prohibition would we have today’s 2,400 small breweries?