The ostensible reason for calorie labeling is consumer information. Center for Science in the Public Interest president Michael Jacobson trumpeted the Beer Institute’s calorie labeling announcement as “good news for consumers.” Kris Sollid of the International Food Information Council proclaimed that calorie labeling “may make it easier to keep calorie consumption in check” and concluded that with calorie labeling “maybe … some people will think twice” before drinking more beer.
Perhaps such information would help beer drinkers, but a recent literature review concluded that “current evidence suggests that calorie labeling does not have the intended effect of decreasing calorie purchasing or consumption.”
Raising rivals’ costs / Looking beneath the foamy claims about enhanced consumer welfare reveals that familiar political machinations are likely lurking beneath the surface of the Brewers’ Voluntary Disclosure Initiative. The Beer Institute is the trade group for large industrial brewers such as Anheuser-Busch and MillerCoors, and its announcement of the calorie labeling initiative indicated that six major breweries, which together comprise more than 80% of the U.S. beer market, will adopt the voluntary calorie labeling.
Why would large brewers want to voluntarily include such information on their labels? Large brewers like Anheuser-Busch are losing market share to the hundreds of smaller craft brewers that have sprung up in recent years in the United States. Instead of being limited to choosing from a handful of nearly identical American light lagers produced by the mega brewers, beer drinkers may now choose from a wide array of styles such as wheats, stouts, Belgians, and pale ales. While individual craft brewers comprise a negligible presence in the beer market, collectively they are eating away at the dominant position that large brewers have enjoyed since the end of Prohibition. However, most craft beers have more calories and higher alcohol content than mass-market brews like Budweiser. Thus, beer labeling can be viewed as an attempt to persuade calorie-conscious consumers to shift back toward Bud and its ilk. As such, calorie labeling would simply be a form of market competition, albeit collusively coordinated via the Beer Institute.
But there is likely more going on here than good old-fashioned market competition, especially given the evidence about calorie labeling’s inefficacy. Beginning in May 2017, U.S. Food and Drug Administration rules will require chain restaurants to include calorie information for beers on their menus. (The rules also apply to many other beer sales outlets with multiple locations such as convenience stores, sports venues, and bowling alleys.) When the FDA issued its regulations about restaurant menu labeling, the Beer Institute issued a press release indicating its “support [for] calorie labeling of each beer listed on menus in restaurants and retail establishments.”
The restaurant menu labeling requirement advantages large brewers over craft breweries. Calorie and nutritional labeling requires costly laboratory testing that reportedly runs $300–$1,000 per beer. Such fees for laboratory analysis amount to a fraction of a penny per bottle for mass-market producers because of their large volumes, but they are a significant cost burden for smaller craft breweries because they have to spread the costs over a smaller quantity of beer sold. Such effects are exacerbated for craft brewers that rotate beers frequently, produce seasonal specialties, or occasionally tweak their recipes.
The large breweries’ support for the FDA’s menu labeling is not a healthy sign of market competition. It is an attempt to gain an advantage over rival producers using government regulations. And it is a reasonable guess that large breweries’ voluntary calorie labeling is simply a step toward requiring calorie counts on all beers. Just as the Beer Institute supported the FDA’s menu labeling regulations, expect the future to bring similar Beer Institute enthusiasm for extending calorie requirements to all beers.
