Tuesday, April 14, 2015

Major brewers, Baptists align to keep small breweries from opening in the mostly rural South

The number of active breweries in the U.S. is on the rise, with 3,699 in 2013, compared to only 49 in 1983. But campaign contributions from major breweries, like Budweiser, and a large Baptist population make the South the nation's most difficult region to open a small brewery, says a study by University of Louisville economics professor Steve Gohmann published in Entrepreneurship Theory and Practice.

Gohmann writes, "The limited number of breweries in the South follows the idea of bootleggers and Baptists where those who gain economically from limited competition—large breweries and distributors—side with groups morally opposed to alcohol to keep breweries out.

The nine states with the fewest breweries are all located in the South, Joe Pinsker reports for The Atlantic. For example, Mississippi, with a large Baptist population, had one brewery for every 994,500 residents in 2012, compared to Vermont, which had one brewery for every 25,000 residents. It's not that Southern residents don't drink—it's that they don't have as many options as people in others parts of the country.

"Around the nation, big beer producers contribute to the campaigns of politicians who will support policies that discourage competition from local upstarts—for example, taxes on breweries and laws that prevent breweries from selling their kegs directly to consumers (instead of through a distributor)," Pinsky writes.

"But what's unique about the South is that there's a voting bloc—the Baptists—whose moral stance against alcohol happens to align with large producers' desires to keep new competitors from getting started in the business," Pinsky writes. "The support of Baptists provides Southern politicians with a reason to hinder brewers that politicians in other regions don't have. As a result, the states with the most Baptists tend to have the fewest breweries." (Gohmann graphic)

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