The operators, of course, point to the high costs of things like real estate and the vicissitudes of the food economy.
“It’s not uncommon to see rent at $20,000, $30,000, $50,000 a month,” says Thor Cheston, former manager of D.C.’s Brasserie Beck and Mussel Bar in Bethesda. “When you break that down with other expenses and overhead, and you divide that by 365, you see opening daily operational costs in the tens of thousands of dollars sometimes.”
Likewise, food costs tend to fluctuate more than booze. Restaurateurs here and elsewhere compensate by using drink prices to subsidize meals—just as meals become more important to beer establishments thanks to the gastro-pubbing of Washington.
Sometimes, even beer prices are leveraged against other beer prices. Pizzeria Paradiso bar manager Greg Jasgur, for instance, says he sometimes increases the price of common, cheap beers in order to lower the cost of exotic, expensive brews. He cites one keg in particular that would normally cost patrons $18 per glass. He sold it for $10. To make up that differential, the price of another brew goes up. One extreme example, according to Jasgur: A beer that should have cost $2.60 was marked up to $6. He didn’t say which brands.
The District’s neighborhood politics—which make it very easy for local residents to get in the way of liquor licenses, adding new costs for retailers—also pushes prices above where they’d be elsewhere. Washington may have seen a gastro-pub population boom, but many of those births required tavern owners to hire pricey lawyers to navigate Advisory Neighborhood Commissions, who are able to wring sometimes costly concessions from new establishments. The overall effect also reduces competition.
Most retailers I spoke with point to a standard mark-up of 40 percent on beer. But sometimes even that substantial margin doesn’t begin to cover the high rent and overhead. “A markup of 1.4 times the cost of the product is suggested retail price, but that figure in D.C. is pretty rare to find,” says George Aguilar, manager of D’Vines wine and beer shop in Columbia Heights and De Vino’s in Adams Morgan. “It’d be very difficult to survive. The cost of living is too high.”
Add to that 40 percent figure a 10 percent sales tax on alcohol in the District, and us brewhounds are paying nearly 50 percent over wholesale prices for each six pack.
If it’s a rare brew, the rate can go even higher. Thanks to D.C.’s lax import laws, some retailers choose to go outside the traditional distribution channels and bring in unusual beers from all sorts of far-flung places. Those beers tend to cost extra, not only because of the added cost of procurement and transportation but also the value of scarcity.
“When I first started getting crazy beers that weren’t yet on most people’s radar, the temptation was strong to jack the prices up,” says Al Lo, manager at Connecticut Avenue Wines & Liquor in Dupont Circle. “The logic was that the people who wanted them would pay for them. The few shops around town who had them would charge a whole lot. So we figured the market could bear it, and we aligned our prices accordingly. After a while, a spirit of fairness settled in. We’ve come back from the dark side.”
If some confluence of D.C.’s economic stability and its beer-drinking folkways push prices above those of other high-rent markets, there are also some unique stories that help explain the cost of beer.
Perhaps the most egregious pricing scheme on beer in the District involves the limited release and specialty brews that producers put out in small quantities.
Brewers generally attribute the higher retail price to exotic and more expensive ingredients. “With our bigger beers, the difference is that we’re often using twice the amount of barley and up to ten times the amount of hops,” Flying Dog’s Caruso says. Or sometimes the ingredients are incredibly rare. “We brewed a batch of beer with El Dorado hops, of which there was only 1.5 acres produced in the entire world,” he adds.