I'm back, with a new complaint: Why do I pay more for beer?!

Beer delivery just came in from a local distribution company, the same company that we have been dealing with forever, who also services all other restaurants, bars, gas stations, beer stores and grocery stores. There wasn't a problem with the order, or the service, but there was something I noticed yesterday when I was buying some groceries for home that has had me somewhat annoyed over the past 24 hours.

You see, the liquor and beer distributors work in a sort of monopoly like manner when it comes to the products they sell. For example, if you wanted to buy Budweiser, there is only one distributor in the region that has the rights to sell Budweiser. So in a sense, that particular distributor has a monopoly on each particular brand that they sell. If you want to buy Budweiser Beer, you have to buy it from that distributor in one way or another. No matter where you buy it, a restaurant, gas station or beer store, all those businesses bought their Bud from the same distributor.

Why is this? Well it's not necessarily the fault of the distributor. From my understanding of how the setup works, Beer & Liquor companies sell their rights to their products to individual distributors. They never give two different distributors in the same region the rights to sell their products at the same time. This would cause competition in the market which inturn would result in price reductions. Therefore, companies like Budweiser are able to maintain their pricing models and never let competition alter their costing.

I think their argument why this is ok, is due to that there are multiple different beers in the market. And if you didn't like the price of one, then you can purchase a different brand of beer.

Whatever, fine, kudos to them for figuring out how to back into a legal monopoly.

Anyway, this all now brings me to my original point, and the issue that caused me the frustration yesterday. And being in the restaurant business, this is a point that most people outside of the industry, more specifically outside of the pricing and purchasing side of the industry don't understand and refuse to believe.

It is more expensive for Restaurants/Bars to buy liquor and beer from the distributors, than it is for individuals to purchase beer from a grocery store, which gets its beer from the distributor. Meaning that in this particular case, factory direct does not result in savings, and in all actuality results in far higher costs.

Let me explain futher:

Yesterday I was at the supermarket and saw that 28, 12oz bottle cases of Labatt Blue were on sale for $16.99, which by all means is a pretty good deal. This grocery store, purchased this beer from the distributor that I use to buy my beer for my restaurant, and they are selling the case, at a profit none the less, for $16.99.

Today, I received my invoice for my weekly beer purchases from the same company that sells to this grocery store. I see that I am being charged 21.45 for 24, 12oz bottle cases. Meaning that it is essentially $5 less for me to go out and buy a case of beer at a grocery store, than it is for me to buy directly from the distributor... not to mention that I would get 4 more bottles.

So why wouldn't I just go out and buy beer from the grocery store and sell that if it's cheaper? Well, because it's illegal. In New York State, as a restaurant or bar you must purchase all liquor and beer from certified wholesalers who have a license to sell to retailers.

All in all, it's just annoying.