War and Wort, part 2
Salvete Dear Readers
Indeed, as the title suggests, we are once again wading into that Edwardian vat of beer, the world of strong Pale Ales and at times comically weak Milds of the era immediately preceding, and intervening, the World Wars. Last week we set the stage somewhat with a discussion of beer’s approximate state in the UK leading up to the first World War and, now that I’ve researched the topic more deeply with a fat tome of a text on brewing at the time, largely a compendium of contemporaneous newspaper clippings and technical brewing tables, I can happily report that I haven’t steered ye astray - that setup was pretty on the money.
But, indeed, this insanely esoteric but nonetheless engrossing text, War!, by Ronald Pattinson, a man so self-conscious about his books and what I can only infer are their insanely low sales numbers that he uploaded a video “ad” for a book that described it as toilet paper in such deadpan manner that I very nearly didn’t buy it. You’re a psychopath, Ron, and I’ll buy each and every book of yours someday, bringing your total sales to maybe 50 or 60. Chin up.
I bring this up in part because I will, in all likelihood, be using his books as my primary, if not only, source for the following two or three parts, mostly because they’re essentially compendiums of historical documents, as noted, and thus amount to a neatly compiled stack of historical documents.
There is one last preface I’ll make before diving into the meat of the post, and that’s because the narrative that emerged of the beer industry in the UK before and during WWI is bizarre without the aid of some basic Economics knowledge, and almost transparently obvious and predictable with it. Namely the following:
Supply and Demand 101
Producers will supply (make) more, say, beer when the price for it rises
Consumers will demand (buy) more, similarly, when the price drops
The details of this relationship, the slope of this curve (simplified, a line), is called “elasticity.” High elasticity of demand means customers are very sensitive to price (meaning, a raise of the price by 10% will produce a higher drop off in consumption), and similarly high elasticity of supply means the same - suppliers are sensitive to price
Supply “going up,” for example if the raw ingredients for whatever they’re making get cheaper, means they’ll sell more of their products at the same price
And, you guessed it, demand going up, say, if the horrors of war inspire a need for the drink, means they’ll pay more for the same quantity of product
And these two - supply and demand - intersect at the market price, in a world without taxes or monopolies
Taxes are interesting - details aside, a $1 tax on a product will result in the consumer paying some fraction of that dollar, the fraction depending on the elasticities mentioned above, and will drive down the amount bought/sold
Monopolies are interesting - while, in a competitive market, producers will sell about at-cost in the long-run, not true for a Monopoly, where the monopolistic producer will charge what it costs them to make something, plus a layer of fat, the thickness of which is determined by what people are willing to pay
Woof! God bless you for slogging through that, and believe it or not, all of this is important to the story. Speaking of, let’s get to it!
The Economics of War
Napoleon has a famous saying that’s often paraphrased as “an army marches on its stomach.” Any nation at war, then, must prioritize the feeding of its troops above perhaps all else, a strategy that does not fare well for an industry built on an arguably extraneous luxury which shares its core ingredient with bread, the same bread as in the phrase “one’s daily bread,” that bread. The question, then, is not when the brewing industry will be hit when a nation goes to war, but how badly and how fast.
Stage one, in this case, was taxes. From 1914 to 1920, the duty levied on beer jumped from about 8s per standard barrel (or shilling, 20 to a £, so about a “nickel” if you’d like a shorthand; don’t worry about barrels), to 100s per barrel. Our little Econ Primer above would lead us to believe that this would lead to a way higher price-per-pint, and indeed, that was the case - we’ll return to that a bit later (p43).
Stage two, which seems to have arrived around 1917~1918, represents the more extreme moves, namely direct rationing controls. While taxes will surely depress demand somewhat, freeing up grain for war, the thirsty workers of the UK continued to drink enough of the now-watery “beer” that further controls were enforced, namely limitations on malt for beer and by extension greater policing of the malt market, but also, perhaps somewhat obvious to any brewers reading this, limits on average original gravities, being generally the staggeringly low figure of 1.030. Without going off on a large tangent, suffice it to say that a tidy “average” figure for a beer brewed today might be the extremely continental (read: supremely common in Germany) 1.048, which is more than 1.5 times that amount; and while there’s no strict relationship between OG (this number) and alcoholic strength or character, there’s a correlation nonetheless, so you’re free to interpret that as meaning the average wartime UK beer would have been maybe 60% as strong as a modern beer, and perhaps similarly flavorful (MacLeod’s excellent OG 1.037 Session Gap [Ordinary Bitter] side by side with a similar-quality Pilsner [probably 12˚P, i.e. 1.048] would be a reasonable rebuttal of this generalization) (pp 44, 128).
This watering down of beer, however, didn’t by any stretch dilute the profits of breweries or taverns - on the contrary, the boom in that industry was remarkable, and led to a record year by a wide margin for at least one brewery, Threlfal’s, which about doubled its Gross Profit in 1918 over its figure in 1917. This profit wasn’t limited to producers, though, as seen below
“The publican...has followed [the brewery’s] example, and with a bit more. Before the war he paid about 40s. a barrel for mild ale, and was content to make a profit of 8s. to 10s. a barrel. To-day he pays £5 a barrel, and makes a profit of £3 8s. to a barrel.”
Indeed, while a part of this must surely have been due to somewhat constant if not increasing demand for beer, two other elements undoubtedly helped - official and unofficial price fixing. Officially, the inception of “Government Ale” (discussed below) effectively set a floor on beer prices, though I’m personally unsure of the degree to which the government allowed or encourage price fixing, as it was certainly carried on in an official and unofficial manner by both larger trade organization as well as small “rings” of taverns (pp 46, 63).
This activity is one of the consequences of monopolization/oligopolization of an industry, wherein a small number of firms conspire to do things like hold prices artificially high in order to maximize profits (or withhold supply so the price increases, as in the gas shortages of the 70s). This, as mentioned in the primer, allows firms to raise their profits from little more than their cost of production in the long term to that, plus a relatively fat bonus, which invariably played a role in the absolute feast that all those on the Supply side enjoyed during the war.
The question then must be asked: why in god’s name didn’t some degree of Invisible Hand-ing drive prices down? And if it did, how were the profits so huge? And the answer, to this Econ II student (don’t worry, I’m acing it), is complex. First of all, even if the price of grain increased somewhat due to shortage, the insane lowering of average gravity from about 1.052 to 1.029 meant a reduction in ingredient costs, if the grain price were constant, of about 44%, which is insane. On industrial scales of brewing, ingredient costs are a huge portion of expenses, and thus such a reduction is sure to increase profits. Further, the government-enforced reduction in output from about 36 million standard barrels to ~13 in 1919 meant, per Econ, that the price of beer was bound to sharply rise, and at no real increase of cost to suppliers (their revenues, shockingly, may not have dropped that much, given the doubling, more or less, in pint price). Finally, there’s the demand angle - if, as it seems, the UK’s beer drinkers were hard pressed to turn to the mildly cheaper Whiskey, and if the horrors and exhaustions of war increased their thirsts, its plausible that their demand, even for this watery product, may have not only held but possibly increased as the war raged on, which would keep the price at massive levels despite the massive drop in production costs, which would indeed have made these breweries and publicans fiendishly rich (p26).
How Society responds to these changes
Congrats! Much of the technical news is out of the way, and we can turn our focus to the people. Needless to say, they didn’t fare terribly well as a result of the shortages, price increases, and quality drops, with some workers whose daily access to beer was compromised actually threatening to lay down their tools in protest, saying “more beer - or we down tools.”
And despite the grumblings and protestations of pubgoers, publicans pulled all of the usual penny-pinching tricks requisite with shortage - on top of the already thin beers available at the working-class budget, glass sizes shrank, bottles were partially poured (one report noted the splitting into four of three bottles), and one publican was even almost jailed for diluting beer and charging a price above the maximum (so there you go, there was some legal enforcement of these price fixings) (pp 31, 39, 53).
What of Whiskey, then? We’ve had it since, like, the year 1,000 or something, and Rum had been a staple of British ships since the, what, late 16th? Late 15th even? (My Punch book is in storage). Well, yes, anecdotally it does seem like some portion of the British populace, facing price increases and a lowering of the quality of beer, turned to the much less socially acceptable Whiskey. And while the increase in price, effectively expounded upon by the lowering gravity, is bound to have driven down sales, and increased consumption of alternatives, this effect is proportional to what’s called the “Cross-Price Elasticity of Demand” between Beer and Whiskey. Since this anecdotally seems low, it’s a reflection of the shock and magnitude of the price increase that drove deeply habituated british ale drinkers to jump ship for whiskey; akin to the Imperial Stout fan being so wildly outpriced that they turn to Bud Light, two products with what I can only imagine is a positively minute CPED.
Finally, homebrewing is worth mentioning, since that was one of the responses to prohibition, and was recently in the news, even, as South Africans turned to homebrewing during the Covid-driven alcohol ban. But alas, as the stringent monitoring of the barley market restricted this practice to farmers, it remains a footnote not much worth expounding upon (p32).
Odds and Ends
This period brought some style-specific effects worth briefly mentioning - namely the death of the Porter in effect, the debasement of Mild (and its semi-permanent allocation to the low gravity realm), and the creation of “Government Ale.” Indeed, this last and peculiar item was an invention of the Government, intended as an affordable and price-stable beer, with a gravity (read: basically ABV) generally around that average 1.030 mentioned above. Suffice it to say, it was brewed and sold at a reasonable price for the time, but faded into obscurity the second it wasn’t needed. It was pale? I think? Nobody seemed to love it, so let’s all just forget I said anything (p105).
Edit: as the Grand Poobah points out, this style may have faded fairly quickly in name, with the last recipe in the grand tome listed as 1919, but far slower in spirit - we’ll go into more detail in the next post.
Here’s a fun one: what happens to the hop industry, which produces a product only useful in brewing, when beer production and gravity drops? (Fun fact: generally, hopping “rates,” or quantities, in beer, mirror grain quantities, with about a million exceptions). You guessed it: an insane surplus. If the government hadn’t bailed out the hop industry by paying them to convert their fields to other crops and buying a portion of the surplus, they would have been boned en masse (p62).
Finally, internationally, some interesting things happened: Ireland, free of the bulk of these measures, kept its average OG above 1.043, which is respectable, and Germany got absolutely dunked on, with a minimum OG in some years as low as 1.005.
Let me take a moment and give you some context on all of these gravity numbers. The system is simple: it’s a density reading, and since water is set at 1.000, a beer with an OG of 1.048 has a starting density 4.8% higher than water’s, implying the existence of sugar. It’s that simple. For example, a wort with a gravity of 1.005 has about 13g of sugar per Liter of water, which is unimaginably weak. A can of soda might be 44g/.35L, i.e. 126g/L, and a “standard” modern beer is generally considered 1.048, or almost 10 times the initial sugar content of that 1.005 beer. It’s basically seltzer (p126).
Oh, and it goes without saying that after the war’s end, most of these trends reversed, but not completely.
Conclusion
Yeah, this one! Hell of a long post, and you can thank Stephen Reeves for that - burn that name into your memory banks. Stephen. Reeves.
But hey, it’s all worth it for the HYPE it builds for our sick upcoming beer release, the Curly Finger, which is this beer right here - get PUMPED
Anyway, thanks for reading, and I’ll see you next week with the WWII post! Silver lining: I’m guessing much of the same happens, so we can skip most of the Econ stuff. Probably!
Cheers,
Adrian “I’m guessing we’re gonna get a really small comedy post after these, huh” Febre