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Go Home A Beer Economics Conundrum (Updated)

JONATHAN CHAIT JULY 22, 2010

A Beer Economics Conundrum (Updated)

BY JONATHAN CHAIT

Pabst Blue Ribbon is being sold in China... as an ultra-high end luxury drink:

In America it's called PBR and is the blue-collar/hipster beverage of choice. In China it's called Pabst Blue Ribbon 1844 and will run you $44 a bottle. Pretty steep for a beer whose biggest draw in the U.S. is the fact that it's, uh, really cheap. 

In China, where the lager has been branded as a “world-famous spirit” and bottled in a much more alluring way, Pabst Blue Ribbon 1844 actually looks quite enticing.  The advertising campaign for the beer even likens it to “Scotch whisky, French brandy, Bordeaux wine,” as they are all matured in wooden casks.

Another marked difference notable from the ad? There is a champagne flute-like glass accompanying the ostentatious bottle, which presumably is what you are to consume your beer from.

I don't understand how this can be sold for $44 a bottle. Can't somebody arbitrage that? What's stopping you from buying a whole bunch of PBR here in the U.S., shipping it to China and reselling it for $22 a bottle?

Update -- it's different stuff. A reader writes in:

I'm sure some angry beer enthusiast has already written you, but: I wrote the Gawker post that the TIME post links out to (here: http://gawker.com/5592399/pabst-blue-ribbon-will-run-you-44-a-bottle-in-china). Turns out that Blue Ribbon 1844 isn't actually the PBR we all know and tolerate. In fact, it's maybe the first "specialty beer" in mainland China. Here's a quote from the March issue of Modern Brewery Age:

Alan Kornhauser, who started his brewing career at Jos. Huber, and subsequently worked at Anchor Brewing Co., Portland Brewing Co., August Schell and elsewhere, now works for Pabst in China six months of each year. Interestingly, he reports that Pabst China has started expanding its horizons beyond Blue Ribbon. "We just produced China's first real specialty beer, an all-malt, reddish brown strong (15.7 plato) ale, dry hopped with Cascade (38 IBU) and aged in new uncharred American whiskey barrels," Mr. Kornhauser reports. "It's being bottled in a nice looking 720-ml brown bottle with an enamel label and it is called Blue Ribbon 1844, a reference to Pabst's founding date. It will only be sold in China, and it's going to sell for over $20 a bottle!"

Evan Osnos wrote a new post about it here. He talks a little bit about the culture of conspicuous consumption, etc.
 

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13 comments

The Chinese equivalent of David Hasselhoff? Yikes.

- tnmats

July 22, 2010 at 2:40pm

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And if they won't let us sell PBR in China for less than $44/bottle, then we should stop letting them sell Tsingtao in the U.S. for less than $44/bottle. The time for double standards that allow Chinese brewers to behave aggressively toward us while they demand our weakness and submission is over. [This message approved by Newt Gingrich.]

- Fishpeddler

July 22, 2010 at 2:46pm

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Dang, where is Billy Carter when we need him?

- cspencef

July 22, 2010 at 3:09pm

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The arbitrage wouldn't work, since the Chinese product is different from domestic PBR. Normal PBR is not aged in wooden casks. Instead, like German table whites, Kentucky moonshine, and draft Coca-Cola, domestic PBR is matured in steel barrels.

- rhubarbs

July 22, 2010 at 3:38pm

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I doubt you'd be able to get the beer past customs. A better plan might be to sell thin, "ironic" mustaches for Chinese hipsters to wear, and maybe some of those Scooby knit hats.

- Geoff G

July 22, 2010 at 3:41pm

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Not that I think it's worth $44, but it's not the same as the American PBR, as the New Yorker News Desk tells us (here and here).

- lant3rn69

July 22, 2010 at 4:01pm

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What's the beer like and how much is it in the States? Curious now. I've a Phd in beer and lager and I'm currently working on some intensive post-doc research on stout. Might have to include that in my sample.

- IggyPop

July 22, 2010 at 4:54pm

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Sadly not even $44 PBR can help the economy in my fair city of Milwaukee -- neither BPR's corporate office nor any of its breweries are based here any more. Perhaps, though, a big wave of wealthy Chinese tourists will descend on Wisconsin.

- orangutan75

July 22, 2010 at 5:02pm

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IggyPop, according to a trade mag story I'm too lazy to look up again to find the link, the Chinese version of PBR - "1844" - will not be sold stateside. Presumably because aside from a few glorified chemistry experiments from Boston Brewing, you can't get away with charging more than about $18 for a bottle of beer in America. That, and Bluegrass Brewing Co. among others is already making barrel-aged beer that's surely better than anything Pabst could do.

- rhubarbs

July 22, 2010 at 5:11pm

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Interesting Rhubarb. An 18 dollar beer? Have to give that a shot. I did pay 18 euro for a poxy near pint of rancid Heiniken in Paris, which has to be the most over rated city in Europe. But an 18 Dollar barrel-aged beer...I'm not sure time and price equate to quality and taste in beer as it does other alcohol; Beamish is 3.50 a pint and it's the drink of the Gods. Still, I'd gladly pay for a Bluegrass, just for the craic.

- IggyPop

July 22, 2010 at 5:23pm

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No you wouldn't, Iggy. And there's a decidedly limited amount of craic to be had from Pabst even if everyone at the party was chugging it down like the Arab kid in "Lawrence of Arabia" in that scene where Lawrence brings him into the British officers' club in Cairo and buys him a lemonade. Lots of gas, not much fun. Rather like Harp lager in those days when it was still a short run to the 14A stop from Dwyers or Houricans for the last bus.

- ironyroad

July 22, 2010 at 10:45pm

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Harp lager! God that takes me back Irony. If it's anything like that Northern drink, then...well...it's just wrong on so many levels. O'Dwyers on the 14a, funny to see that on the TNR boards. I hope you enjoyed your stay with us.

- IggyPop

July 23, 2010 at 4:32am

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Iggy, if you can find it, you'll pay not more than about $10 a sixpack for Bluegrass. The bourbon-barrel-aged beer is, um, interesting in a worth-trying-once kind of way. For an $18 bottle, we're talking more like a limited-edition Rogue in a limited-release tall bottle, maybe with Chef Morimoto's picture on it or something.

- rhubarbs

July 23, 2010 at 4:11pm

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