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The Economics of Beer$

Johan F.M. Swinnen

Print publication date: 2011

Print ISBN-13: 9780199693801

Published to Oxford Scholarship Online: January 2012

DOI: 10.1093/acprof:oso/9780199693801.001.0001

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A Brief Economic History of Beer

A Brief Economic History of Beer

(p.3) 1 A Brief Economic History of Beer
The Economics of Beer

Eline Poelmans

Johan F. M. Swinnen

Oxford University Press

Abstract and Keywords

This chapter presents a brief economy history of the evolution of beer production and consumption and the industrial organization of breweries. It discusses first the discovery and use of beer in ancient history, and the functioning of monasteries as centres of the beer economy in the early Middle Ages. It then presents an analysis of the innovation and taxation in brewing in the Middle Ages which triggered the decline of monasteries and growth of commercial breweries in Early Modern Times. It analyzes the globalization and new competition for beer in the Early Modern Times, as well as the scientific discoveries and the development of modern brewing in the 18th and 19th centuries. Finally, the growth and decline of different types of beer and the consolidation and globalization of breweries in the last two centuries are discussed.

Keywords:   economic history, beer, brewing, innovation, taxation, monasteries, commercial breweries, competition, consolidation, globalization


Throughout history, different types of alcoholic beverages made from a whole range of products (fruits, sugar cane, honey, and cereals such as barley, wheat, oats, millets, rye, and maize), have been labelled ‘beer’. If we look at all these historical ‘beers’ through contemporary glasses, some of them would now be classified as ‘wine’ or some kind of ‘distilled alcoholic beverage’.1 Predecessors of our modern beer were found several thousands of years ago in places all over the world, including Asia and Europe. It is not clear whether the technique to produce ‘beer’ was discovered in one place and then spread among people and continents, or whether it was discovered in various places independently (Nelson 2005).

In this brief historic overview, we discuss the evolution of beer production and consumption and the industrial organization of breweries throughout history. Our overview draws significantly on some excellent and more detailed studies of beer and brewing in different historical periods, such as those by Aerts et al. (1990); Baron (1962); Clark (1983); Eßlinger (2009); Hornsey (2003); Nelson (2005); Rabin and Forget (1998); Tremblay and Tremblay (2005); and Unger (2001, 2004).

The chapter is organized as follows. We first discuss the discovery and use of beer in ancient history, and the monasteries as centres of the beer economy in the early Middle Ages. Subsequently, we analyse innovation and taxation in brewing in the Middle Ages, after which we move on to the growth of commercial breweries and the decline of the monasteries in early modern (p.4) times. Furthermore, we discuss the globalization and new competition for beer in early modern times, as well as scientific discoveries and the development of modern brewing in the eighteenth and nineteenth centuries. Then, we look at the growth and decline of different types of beer and the consolidation and globalization of breweries in the last two centuries.

The Discovery and Use of Beer in Ancient History

The Neolithic Revolution—i.e. the gradual transition from the nomadic life of hunters (the ‘extractive economy’) to a more settled life as farmers (the ‘agrarian economy’)—which happened in several parts of the world between 9000 and 7000 BC, is often seen as the major turning point in early human history (Dineley and Dineley 2000). It is possible, and even probable, that even before this revolution, ‘beer’ was already brewed to some extent, because some of the fermentation materials necessary for the brewing of beer (e.g. sugar in tree saps or certain kinds of fruits) were already available in sufficient quantities to the nomadic humans living before the Neolithic Revolution (Hornsey 2003). However, some of the earliest evidence that ‘beer’ was produced and consumed comes from China more than 7000 years ago (Bai et al., Chapter 15, this volume). Outside China, it is known that by the beginning of the fifth millennium BC, people in southern Mesopotamia—in a region known as Sumeria, which included the fertile region between the Tigris and Euphrates Rivers—were making ‘beer’. During archeological excavations, a clay tablet dated 6000 BC, containing one of the oldest known beer recipes, was found in Mesopotamia (Patroons 1979). Moreover, the Sumerians already understood that beer could be used as a form of ‘currency’. Around 3500 BC in the Sumerian city of Uruk—one of the first modern cities in which grain production gradually increased thanks to the rich soil and the introduction of improved farming methods—people traded grain and beer for other, more scarce natural sources, such as timber, metals, or even precious stones (Rabin and Forget 1998). During the second millennium BC, after the Sumerian Empire had collapsed, the Babylonians ruled the fertile Mesopotamia. Beer brewing was important and they issued laws to protect and preserve their beer‐brewing methods (Röllig 1971).

Around 3000 BC, beer production started to spread to ancient Egypt. All ranks of society, male and female alike, drank beer (Brewer and Teeter 2007). It is said that Ramses III, one of Egypt's greatest pharaohs, found beer to be such a noble drink that he and his guests drank it in golden cups. At the height of the Egyptian Empire, beer was the drink of choice for both festive and ordinary dining occasions (Geller 1992). It was only (much) later, i.e. after Egypt had been conquered by the Roman Empire, that wine became widespread and (p.5) the Egyptian elite started to prefer wine over beer. However, even then, beer remained the drink of choice for the Egyptian ‘masses’ (Meussdoerffer 2009).

In these ancient civilizations, it was customary to drink unfiltered beer—beer that had not gone through any sieving or settlement phase—directly from large jars through straws in order to avoid gross sediment (Hornsey 2003). The straw was used to get through the layer of yeast and hulls that was floating on the surface of the beer (Katz and Voigt 1986).

The earliest indications of beer production in Europe date from 3000 BC. It is uncertain whether European people discovered the fermentation process themselves or whether the beer‐producing technology used in Europe was based on knowledge from the Near East.

At the beginning of the Greek Empire (around 500 BC), the Greeks brewed beer as some of their ancestors had done before them, until the growing of grapes for wine became both more common and more popular. Subsequently, the Greeks increasingly started to drink wine instead of beer, which coincided with the increasing notion of wine as a more ‘civilized’ drink that was ‘suitable for gods’ (Nelson 2003). This shift in preferences is reflected in their writings. While many Greek writers saw beer as a barbarian drink, inferior to wine, some of the works of the early Greek writers and philosophers adopted a more neutral position towards the qualities of beer versus wine and even attributed positive qualities to beer.2

According to the historian Pliny (AD 23–79), the Romans learned brewing techniques from the Egyptians. However, the Romans generally drank only wine, and they generally despised beer and its drinkers, whom they referred to as ‘barbarians’ and ‘uncivilized’ people.3 The expansion of the Roman Empire coincided with the spread of wine consumption and viticulture in Europe.

In many other European regions which are now associated with wine, people drank not wine but beer for thousands of years. For example, in what (p.6) is now France, Spain, Portugal, and northern Italy, people drank beer, not wine, in the millennia before the advent of the Roman Empire. Nelson (2005: 66) states that ‘there is no doubt that Celtic peoples in Europe from what is now France, Spain, Belgium, Germany, and Britain were all avid beer drinkers, probably from very early times’.

Together with the Roman conquest of Europe, the Roman wine culture and (later) production spread to northern Italy (above the Po River) and southern Gaul (France), followed by the Iberian peninsula (Spain and Portugal), and later still by northern Gaul (northern France and Belgium). Although the introduction of wine consumption and production was usually to the detriment of the local beer‐drinking cultures in the regions that were conquered by the Romans—especially for the upper classes—some Celtic tribes continued to drink beer. Especially in the outer, northern areas of the Roman Empire where the influence of Germanic tribes was strong and where wine was difficult to obtain, i.e. in what is now called Britain, Belgium, and Germany, beer was still consumed in large quantities during the Roman rule (Patroons 1979).

In the fifth century AD, the Germans took control of large parts of the West Roman Empire, which heralded a ‘great beer revival’. The early German tribes drank beer in considerable quantities (Meussdoerffer 2009). After half a millennium of wine‐drinking rulers, beer‐drinking rulers took over again, and the negative perception of beer and beer‐drinking people as uncivilized—which had been commonplace under Roman rule—became rare (Nelson 2005).

Monasteries as the Centres of the Beer Economy in the Early Middle Ages

The church and the monasteries were…the birthplaces of brewing science

(Jackson 1996: 1)

In early history, women brewed beer. The Egyptians saw brewing as a domestic—and thus female—chore (i.e. the preparation of food), and to them, the goddess Hathor was the ‘inventress of brewing’. The production of wine was seen as a more complicated process, and thus an activity assigned to men (Hornsey 2003). Only by the eighth century AD and with the spread of Christianity and large monasteries, did men take over the task of brewing beer from women (Rabin and Forget 1998), although women continued to have an important role in small home breweries throughout the Middle Ages (Unger 2001).

When Charlemagne started ruling his Holy Roman Empire around AD 800, he drew up rules regarding how a town should be organized. He also gave a place to the brewers in his ‘ruling hierarchy’ (Unger 2004). Charlemagne's (p.7) empire, which had started as a loose confederation of Germanic tribes living in Gaul (modern Belgium and France), expanded to other regions in what is now Germany, Italy, and Spain. Across his empire, Charlemagne built many monasteries, many of which became centres of brewing. Initially, most of the monasteries were located in southern Europe, where the climate permitted the monks to grow grapes and make wine for themselves and their guests. However, when later monasteries were established in northern regions of Europe, where the cooler climate made it easier to grow barley instead of grapes, the monks started to brew beer instead of wine (Jackson 1996). In this respect and throughout the early Middle Ages, the principle of ‘monastic brewing’ spread widely in the British Isles, and to many parts of Germany and Scandinavia (Unger 2004).4 In fact, the growth in brewing in the Low Countries in the ninth and tenth centuries was mainly due to this extension of the Carolingian authority northwards. Only in the twelfth and thirteenth centuries would brewing emerge as a commercial venture. Before that, the monastery was probably the only institution where beers were manufactured on anything like a commercial scale (Hornsey 2003). The beer brewed by the monks was used for their own consumption, as well as to be given to pilgrims and the poor (Bickerdyke 1889).5 The oldest known drawings of a modern brewery were found in the monastery of Saint Gall, in present‐day Switzerland and were dated AD 820. The plans of the Saint Gall monastery show three breweries, all producing beer, but for different groups of consumers: one brewery for the guests, one brewery for the pilgrims and the poor, and one brewery for the monks in the monastery. The beer that was produced for the guests was of a better quality than that brewed for the pilgrims, poor, and the monks (Horn and Born 1979).

However, the monks soon started to brew beer for other people as well, such as noblemen. In addition, monks were allowed to sell their brew in so‐called ‘monastery pubs’. There were also so‐called ‘church ales’, celebrations and feasts of the church where peasants were allowed to drink large quantities of beer for free, reducing the demand for commercial brewing (Rabin and Forget 1998).

Studies indicate that monks often drank large quantities of beer. Statistical sources even mention beer consumption of up to five litres a day for each (p.8) monk in some monasteries. Several factors seem to have played a role (Rabin and Forget 1998). First, monks preferred beer over water, as the water in the Middle Ages was often polluted. Second, apart from nutritional reasons, beer was often used in monasteries for spiritual and medicinal purposes. Third, an average meal in the monasteries of the early Middle Ages was rather frugal, and beer provided a welcome nutritious addition for the monks and their guests. Fourth, although beer contained alcohol, it was seen as a liquid like water, and was, as such, not forbidden during a fasting period. Beer was the ‘ubiquitous social lubricant’ and this not only because it was an essential part of the—often dire—medieval diet, but also because during the Middle Ages every occasion that was even remotely ‘social’ called for a drink (Unger 2004).

Innovation and Taxation in Brewing in the Middle Ages

An important innovation was the use of hops in brewing. There is evidence that as early as around AD 800, German monasteries were adding extracts of the hop plant to preserve their beer longer. Moreover, the bitterness of the hops also balanced the rather sweet flavour of the malt, the other main ingredient of Germanic beer (Behre 1983 and 1999).

This innovation would ultimately transform the entire global beer economy. However, despite its benefits, the use of hops did not spread rapidly through the beer‐producing regions of Europe. In fact, it would be several centuries before its use would be widely accepted. The main reason for the slow diffusion of this innovation was its impact on the local tax base in many regions.

Before hops were used, breweries were subjected to a so‐called ‘Grutrecht’ or ‘flavouring licence’ in many regions. This Grutrecht was named after the ‘grut’, a combination of herbs that were used to flavour beer (or to ‘disguise faults’ in the brew) and to preserve the beer. Grut was an important factor in distinguishing between different beer brews (Doorman 1955). The ‘Grutrecht’ was determined by the local authorities and was used to tax breweries. It stated explicitly which particular flavouring additive could be added to the beer. All brewers were obliged to buy grut for their brews from the local rulers and brewing beer without grut was forbidden. To avoid tax evasion, the exact composition of grut was kept a secret (Mosher 2009).

While the addition of hops improved the taste and preservation of the beer and allowed for transportation over longer distances, hops threatened the Grutrecht. By using hops, brewers no longer needed grut (or needed less of it). Hence, the introduction of hops threatened local rulers' revenue from the Grutrecht tax on beer. Therefore, in many regions, including Britain and Holland, the use of hops was prohibited for a long time. The official reason (p.9) was that the taste of hopped beer could be very different from the well‐known taste of the ‘older style’ Germanic beers and that adding hops was seen as a ‘contamination of good ale’. The real reason was that, if the use of hops was allowed, the local authorities would lose tax revenues (Unger 2004).

For this reason, it took several centuries before the use of hops became commonplace in some European regions. For instance, using hops was initially forbidden in the British Isles. Only after the Hundred Years' War between France and England (1337–1453), were hops allowed to be used in brewing English ales (Meussdoerffer 2009). In Holland too, rulers did not allow the domestic brewers to use hops until the early fourteenth century (Hornsey 2003). An interesting illustration of how the (compulsory) addition of grut to beer still has repercussions to the present day comes from Belgium, where breweries on opposite sides of the Schelde River continue to use different brewing processes (Degrande 2010).6

It is important to mention that, after the addition of hops as a brewing technique had become generally accepted, the beer terminology changed as well. ‘Old’ beer, made without the addition of hops, was now called ‘ale’, whilst ‘new’ beer, made with the addition of hops, was just called ‘beer’. However, somewhat confusingly, the terms ‘ale’ and ‘beer’ would take on different meanings again several centuries later. With the introduction of the bottom (cold) fermentation processes, in the twentieth century, the ‘new’ beer was called the (cold lagering) ‘beer’ and the ‘old’ beer the (warm fermentation) ‘ale’ (see further).

The Growth of Commercial Breweries and Decline of the Monasteries in Early Modern Times

In the fourteenth century, the central position of the monasteries in the beer‐brewing industry changed dramatically. Commercial breweries emerged and grew in importance. These changes coincided with the overall growth of the brewing industry. Unger (2004: 107) sums up the brewing industry in early modern times as follows:

The years from around 1450 to the early seventeenth century were a golden age for brewing…From Flanders to the Celtic Sea to northern Scandinavia to Estonia and Poland to Austria to the upper reaches of the Rhine River— (p.10) brewing expanded…It enjoyed unprecedented economic success. Beer invaded new parts of Europe, claiming or reclaiming territory where wine was the preferred drink. The higher quality of hopped beer compared to its predecessors, the greater efficiency of producers…, and improved distribution all combined to make beer an increasingly popular drink.

Several factors, affecting both the demand and the supply, played a role in this process (Rabin and Forget 1998 and Unger 2004). In the Early Middle Ages, many people only drank beer at religious festivities, because it was free. Incomes were too low to sustain a large demand for beer. Demand for beer only increased in the late fourteenth and fifteenth centuries, after the Black Death (1347–52), during which many Europeans—rich and poor alike—died. Income growth in the fifteenth century increased demand for beer. In addition, after the Black Death, the re‐expansion of existing towns and the creation of new towns also provided opportunities for developing and expanding the brewing industries and related techniques.

Demand also increased as more people started to drink beer instead of water with increasing awareness of the problems of water pollution. Drinking fouled and polluted water lowered people's general resistance to illnesses and epidemics could be transmitted by water. As a result, a growing number of people started to prefer beer, which was made from boiled water (in which bacteria had been eliminated), over water.

Another reason for the growth in beer demand was that an increasing number of merchants were travelling between town markets and regional fairs. These travelling merchants needed a place to sleep, as well as food and drink. The increasing demand for lodging facilities, food, and drink led to the emergence of ‘inns' and ‘taverns’ (Clark 1983). With it, the demand for beer grew in these places. As merchants became used to spending the night in these facilities, the taverns became true meeting places, where people would come not only to sleep and eat but also to do business. A prime example are the famous Hanseatic cities that maintained a trade monopoly between the Middle Ages and early modern times (thirteenth to seventeenth centuries) along the coast of northern Europe.7 Around 1376, the city of Hamburg was called ‘the Hanseatic League's Brewhouse’. Afterwards, other important centres of brewing were associated with the League, such as Wismar, Rostock, Lübeck, and Danzig (Von Blanckenburg 2001).

Together with the emergence of commercial breweries and a real ‘brewing industry’, many government regulations were implemented. Regulations imposed a variety of taxes and rules that described how beer had to be produced, the duration of the brewing process, the required composition of (p.11) beer, rules that fixed beer prices, etc. (see Chapter 2 by Unger in this book for more details on these regulations). The first brewing regulations of this kind had already been introduced in Nuremberg (Bavaria) in the early fourteenth century. In 1487, a famous brewing ‘law’ was actually enacted in Munich in Bavaria: the so‐called ‘Reinheitsgebot’ (or ‘Purity Law’), which survived until 20 years ago. The ‘Reinheitsgebot’ stipulated that only barley, hops, and pure water could be used to produce beer (Hackel‐Stehr 1987).8

As more beer was brewed and commercially traded, its quality, as well as its distribution and export, increased. Increasing competition between breweries contributed to the fact that beer had become more tasty because of increased experimenting with the flavour of the finished brews. In addition, real ‘brewing centres’ developed (e.g. Leuven, Bruges, Ghent, and Antwerp in Flanders; Haarlem and Gouda in Holland; Hamburg, Lübeck, and Munich in Germany; and London in England (Unger 2004)).

While the commercial breweries arrived, the role of monasteries as centres of brewing declined. This was heavily influenced by political considerations and actions. First, to compensate for the lost tax income from the ‘Grutrecht’, local rulers wanted to impose taxes on beer itself. However, beer‐brewing monasteries were linked to local parishes which did not have to pay this tax. As a result of the privileged position enjoyed by the monasteries, local rulers favoured private brewers, which would have to pay the taxes on beer (Meussdoerffer 2009).

Later on, during the Reformation, which took place in Europe in the early sixteenth century, the monasteries' breweries lost further market share as the Catholic Church lost a lot of its power (Holt 2006). In the northern European regions which turned to Protestantism, the Reformation eliminated Catholic monasteries and, along with them, their beer production. Commercial breweries would emerge to take their place. In those countries that continued to be Catholic, monasteries carried on brewing, with the advantage of being exempt from some taxes (Wrightson 1981).

The final element that completed the shift from monasteries to commercial breweries as centres of brewing came at the end of the eighteenth century. During the French Revolution in 1789, many European monasteries—along with their breweries—were destroyed. As many monasteries were destroyed (p.12) and/or the monks had been chased away in the preceding years, beer brewing was no longer a priority for the monks that remained. Instead, commercial breweries took their place (Patroons 1979). Hence, from the Napoleonic era onwards, on the whole, the role of monasteries in brewing became (much) less important. That said, the role of monasteries and abbeys in brewing has seen a remarkable revival in recent decades, and particularly so in Belgium (see Chapter 5 by Persyn et al. in this book).

Globalization and New Competition for Beer in the Early Modern Times

During early modern times, the European superpowers of the time (initially Spain and Portugal, followed by England, France, and the Netherlands) made voyages to the ‘New World’, which gave another indication of the importance that Europeans attached to their beer (Mathias 1959 and Stubbs 2003). Convinced that water in newly discovered territories was polluted and carried diseases, the European discoverers took beer as a very important cargo on their ships. The Europeans also introduced beer‐brewing methods into the territories they conquered (Schmölders 1932). In some conquered regions, however, such as in the southwestern region of North America, they found that native Americans were already brewing some form of ‘beer’, made from fermented maize (Rabin and Forget 1998). Another example could be found in Latin America, where the Aztecs—who lived in what is now Mexico—already produced some sort of beer made from the sprouted kernels of maize (Dickenson and Unwin 1992).

However, the globalization process also had very different effects on the European beer industry. Apart from finding new markets in which to sell their beer, the European beers faced stiff new competition from other, non‐alcoholic, beverages coming from the new territories, such as tea, cocoa, and coffee. Other important competition for beer in the seventeenth century was found closer to home. As incomes in Europe increased, more people could afford wine, which had also become more widely available because of improved transport infrastructure. In addition, distilled alcoholic beverages, such as gin, rum, vodka, and whisky, were increasingly produced and traded (Aerts and Unger 1990).

Not surprisingly, such competition induced lobbying for protectionist measures. A well‐illustrated case is the introduction of high taxes in the UK on the import of French wine and alcoholic spirits in the early eighteenth century, causing a dramatic decline in cheap wine consumption. The British masses collectively turned to beer as their most important and widely consumed (p.13) alcoholic beverage, and hence, with a largely protected beer industry, the UK became a ‘beer‐drinking nation’ (see Chapter 4 by Nye in this volume).

Apart from increasing competition from ‘New World’ non‐alcoholic beverages, from the end of the nineteenth century onwards, ‘soda water’, another non‐alcoholic drink, became a strong competitor for beer. In 1767, after experiments in his Leeds brewery, the Englishman Joseph Priestley (1733–1804) invented artificially ‘carbonated water’. After this invention, several other scientists experimented with ways of producing carbonated water and, in Hungary, Ánios Jedlik (1800–95) produced consumable ‘soda water’. In 1886, the American John S. Pemberton (1831–88) invented the soda water that would become known as ‘Coca‐cola’. In the decades that followed, consumption of coca‐cola and similar sodas grew very rapidly.

Scientific Discoveries and the Development of Modern Brewing in the Eighteenth and Nineteenth Centuries

During the eighteenth and nineteenth centuries, several scientific discoveries had a dramatic impact on beer production. Increasing knowledge about the function and composition of yeast made it possible to produce new types of beer and better control the production process. Other important discoveries were the improvement of the steam engine, the invention of the refrigerator and of glass beer bottles, the introduction of new methods to seal beer bottles and—in the twentieth century—the invention of metal cans. A final important invention was the ability to control the ‘stability’ of beer once it had been bottled.

First, an important innovation constituted the discovery of a new beer production process called ‘lagering’. Although a ‘lager’ kind of beer was already being brewed in southern Germany in the late Middle Ages, lager as we know it today is the pale and almost gold‐coloured drink first brewed in the mid‐nineteenth century by Josef Groll (1813–87) (Michel 1899).9 To produce lager beer, a ‘bottom‐fermentation process’—in which the (slow‐fermenting) yeast sinks to the bottom of the brewing vessel—was used. Before this method was invented, the yeast rose to the top of the fermenting brew, i.e. the top‐fermentation process (Hornsey 2003).

By 1818, scientists had discovered that the beer fermentation process could be divided into a first phase, in which saccharine was transformed into alcohol and carbon dioxide, and a second phase, in which the beer ‘ripened’ and remaining impurities were removed. This knowledge led to experiments to (p.14) produce new beers by manipulating the yeast's environment. Experiments by two brewers, Gabriel Sedlmayr (1811–91) in Munich and Anton Dreher (1810–63) in Vienna, led to the discovery of the ‘process of lagering’ (Sedlmayr 1934).10 To control the activity and suspension of the yeast, they used slow‐acting yeast and storage at a low temperature over a period of several weeks (Meussdoerffer 2009). In this way, the German ‘lager’—literally ‘storage’—beer was produced. The ‘lager’ beer was clearer and brighter than the then existing beers.

This scientific approach led to the creation of ‘brewing schools' and to more new beers.11 By 1840, in the Munich ‘brewing school’, Dreher was producing large quantities of so‐called ‘pale lager beer’, which represented a mix of the ‘crispness’ of lager beer and the paler colour associated with English ale beer (Hornsey 2003).

Around the same time that the lager brewing process was developed, the exact composition of yeast was discovered. Although yeast had been used to produce beer for several centuries, it was only in the nineteenth century that yeast was identified as the actual cause of fermentation in malted barley water: one of the most important steps in the beer‐making process. While the first principles of the operation of yeast were discovered during the seventeenth and eighteenth centuries (Barnett 2003),12 it was not until the mid‐nineteenth century that the French scientist Louis Pasteur (1822–95) was able to demonstrate that yeast consists of living cells that are responsible for the fermentation process (Barnett 2000). Whilst doing research into the causes of ‘diseases’ associated with wine in the 1860s, Pasteur developed the so‐called ‘Pasteurization’ method, in which he found that wine could be preserved much longer if he heated the wine to a specific temperature and cooled it immediately to destroy pathogens in the wine.13 Later on, he conducted (p.15) similar research with regard to beer in his Etudes sur la Bière (1876).14 Around the same time, the Danish scientist Emil Christian Hansen (1842–1909) studied the ‘diseases’ that affected beer production (Michel 1899). In the Carlsberg laboratories in Copenhagen, Hansen succeeded in isolating the strain of yeast that produced the German lager beer. Other breweries could now also produce lager beer, which became very popular (Hornsey 2003). The 1880s heralded the transition from top to bottom fermentation. With the success of this new fermentation process, the brewery industries in continental Europe embarked on the road to industrialization (Teich 1990).

Two other technological innovations in the late eighteenth and nineteenth centuries were important for the growth of lager beer and the beer industry, namely, the improvement of the steam engine15 and the invention of refrigeration. First, the refined Watts steam engine not only made it possible to use more complicated, steam‐operated machinery during the brewing process, but it also reduced transportation costs. With trains and steamboats, it became much cheaper to export beer throughout Europe and to the USA, Canada, and even Australia. Second, the invention of the refrigerator in 1876 made it possible to brew lager beer—which required cooling—all year round and not just during the winter months, when natural ice was available to cool the beer (Meussdoerffer 2009).

Other important innovations affected storage of beer (Hornsey 2003). Using glass bottles was important for the transportation of the beer, as it enabled beer to be preserved much better than cask beer, especially on long journeys. In the seventeenth century, glass beer bottles were hand blown and therefore expensive.16 After the invention of the ‘chilled iron mould’ in the 1860s, glass bottles could be produced relatively cheaply in mass quantities, as of the 1890s (Teich 1998). Equally important was the invention of new methods to seal beer bottles. Glass beer bottles were initially sealed with a cork held in place with wire (Meussdoerffer 2009). Later on, beer bottles were closed with a ‘screw stopper’, invented by Henry Barrett in 1872. Another 20 years later, in 1892, William Painter patented the ‘crown cork’, which enabled automatic bottling machines to be developed. In the first half of the twentieth century, metal beer cans were invented and introduced in the USA. They soon became popular in the USA, but not in the UK and the rest of Europe, where their widespread use did not occur until (much) later.17

(p.16) In summary, scientific progress in the eighteenth and nineteenth centuries had a major impact on the brewing industry. The mechanization and use of steam engines was followed by the introduction of refrigeration, making control of the environment in breweries possible. Moreover, these developments came at the same time as detailed research on yeast which made it possible to produce a consistent and reliable pilsner beer of high quality throughout the entire year and at lower costs. With an improved product which brewers could distribute using cheaper and faster transportation networks, beer production and consumption grew and spread throughout the entire world (Unger 2004). In addition, throughout beer history, one of the main goals of brewers had always been to achieve consistency in their brew. Lack of technology and knowledge had made this very difficult for centuries. However, with increasing knowledge of how the actual brewing process took place and, thanks to the introduction of beer bottles, beer cans, and crown corks, it became increasingly possible to control the ‘stability’ of beer once it had been bottled (Gourvish 1998).

Growth and Decline, Consolidation and Globalization in the Nineteenth to the Twenty‐First Centuries

Growth and Decline

The nineteenth century was characterized by strong and continuous growth in beer production (see Table 1.1 and Figure 1.1). Beer production and consumption increased particularly sharply in the last quarter of the nineteenth century and up to the eve of World War I, a period characterized by a strong decline in global grain prices (Swinnen 2009). By the early twentieth century, the beer markets of Germany, the UK, and the USA were the largest in the world and of similar size: between 5 to 7 billion litres each.

However, evolution in the twentieth century is characterized by both growth and decline. In most countries, beer production declined dramatically in the 1915–50 period, but for different reasons. To illustrate the changes better, Figure 1.2 presents beer production in indices, with 1900 = 100. In Europe, production fell by around 70 per cent during World War I. The brewing industry suffered greatly, particularly in the occupied parts of Europe (p.17)

Table 1.1. The largest beer producers by continent (1820–2000), in billion litres













































































































South Africa


















South Korea
















New Zealand







Note: For the period until 1830, the data for the UK refer to Great Britain only. From 1880 onwards, the data refer to the United Kingdom of Great Britain and Northern Ireland (UK). Alsace‐Lorraine is included in Germany rather than France from 1871 to 1917, though it is not included in the French statistics until 1922. For the period 1945–89, the figures of West Germany and East Germany were added together. With regard to Russia, figures until 1913 apply to the Russian Empire. For the period 1913–39, they apply to the USSR territory of 1923. In 1940, they include territories incorporated in 1939–40. After 1990, they apply to the present territory of Russia. For Czechoslovakia (which came into existence from 1918), the figures for the period 1938–44 are for the Czech lands only. From 1993 onwards, they refer to the Czech Republic.

Source: Mitchell (2007a), table D23, 506–12; Mitchell (2007b), table D26, 602–10; Mitchell (2007c), table D21, 415–21.

A Brief Economic History of Beer

Figure 1.1. Beer production in the nineteenth and twentieth centuries in Europe (Belgium, France, Germany, and the United Kingdom) and the USA (1820–2000), in billion litres

Note: For the period until 1830, the data for the UK refer to Great Britain only. From 1880 onwards, the data refer to the United Kingdom of Great Britain and Northern Ireland (UK). For the period 1945–89, the figures for West Germany and East Germany were added together.

Source: Mitchell (2007b), table D26, 602–10; Mitchell (2007c), table D21, 415–21.

(e.g. Belgium and France). The mobilization caused many workers in the brewing industry to be scattered, which led to a shortage of employees in the breweries. Moreover, metal materials (such as copper), vehicles, and draught animals were requisitioned by the occupying forces. As a consequence, a lot of breweries had to close their businesses (Patroons 1979). In Germany too, the beer industry suffered, as other industries (especially the war industries) had priority in the allocation of resources. Moreover, grains were scarce and expensive, with food and feed shortages throughout Europe.

After the war, the scarcity of raw materials persisted for several years. Breweries that wanted to start up again, or to increase production, had to manage with what they could find. For several years after the war, all kinds of grains, peas, beets, and beans were used to produce beer. Yet beer production recovered strongly in some European countries after the war. For example, in France, beer production increased four‐fold between 1918 and the late 1930s. Recovery was less marked in Germany and the UK (see Figure 1.2).


A Brief Economic History of Beer

Figure 1.2. Change in beer production in the twentieth century (1900–2000), base year 1900 = 100

Note: For the period 1945–89, the figures of West Germany and East Germany were added together.

Source: Mitchell (2007b), table D26, 602–10; Mitchell (2007c), table D21, 415–21.

Production declined again dramatically in the 1940s. During World War II, food was rationed and raw materials for the European breweries were scarce and expensive. As during the previous shortages, breweries tried to cope by using substitutes for normal brewing ingredients. Examples of substitutes included several types of malt that had been flavoured/aromatized, beets (rich in sugar content), and several flavouring substances, such as coriander seed, camomile blossom, and the skins of lemons and oranges (Patroons 1979). As the war continued, metal and cork—needed to seal beer bottles—became scarce as well. Cork was increasingly substituted by cardboard with an added layer of paper, by recycling used crown caps, or by using ‘swing‐top bottles’, with rubber rings made from used car or plane tyres to close the bottle.

The impact of the world wars was smaller in the USA. During World War I, there was an approximately 10 per cent decrease in American beer production. Grain rationing, which was imposed by the American government because of ‘war‐time emergencies’, induced the American brewers to brew beer with a lower alcohol content (i.e. only 2.75 per cent) (Stack 2003).

(p.20) A much more radical decline in beer production was caused by government regulation. The ‘temperance movement’ succeeded in securing a nationwide prohibition on alcohol in the USA from 1919 to 1933. During this period, the sale, manufacture, and transportation of alcohol of more than 0.5 per cent were banned (Hartung 1932). As a result, the USA had no legal beer production for 14 years. There was some illegal beer production in this period, but it was minimal. Total beer output collapsed (Figure 1.2). Many American breweries were closed down. Some sold their plant and equipment as soon as possible, at substantial losses. Others, who expected the Prohibition to be temporary, tried to use their equipment to produce related products: such as beer containing less than 0.5 per cent alcohol (Stack 2003). In 1933, the Prohibition was repealed. The manufacture and sale of certain kinds of alcoholic beverages, including beer, was allowed again. The impact on the US brewing industry was severe. According to official figures, there were 1,345 active breweries in the USA in 1915. By 1934, 50 per cent had closed (Table 1.2).

Table 1.2. The number of breweries and the average brewery size in Belgium, in the UK, and in the USA (1900–1980)




No. of breweries

Average brewery size (x million litres)

No. of breweries

Average brewery size (x million litres)

No. of breweries

Average brewery size (x million litres)







































































































Note: The average brewery size was measured in million litres for Belgium, in UK barrels for the UK, and in US barrels for the USA. We calculated all figures in million litres, taking 1 UK barrel = 36 imperial gallons (43 US gallons) and 1 US barrel = 31 US gallons (26 imperial gallons). 1 UK gallon = 4.55 litres and 1 US gallon = 3.79 litres. (The Finnish Foundation for Alcohol Studies 1977: 33).

Source: Calculated from Hornsey (2003: 618); Patroons (1979: 18); ‘History of Beer’, The Belgian tourist office, Wallonia and Brussels; Union of Belgian Brewers; Stack (2000: 49); Stack (2003).

(p.21) Some authors (e.g. Rabin and Forget 1998) also claim that the Great Depression (reducing demand) and the dust bowl18 (increasing grain prices) reduced production in the 1930s. However, as Figure 1.2 illustrates, within a few years of the repeal of prohibition, beer production increased to the level of the pre‐prohibition years. The dust bowl seems to have affected the nature of the brewing process rather than the amount of beer produced, just as, during World War I, US breweries reacted to increased grain prices by switching ingredients. Instead of barley, cheaper grains such as corn and rice were used, and, with these ‘substitutes’, ‘lager’ style beer was brewed.19

Strong growth was temporarily interrupted by World War II, but resumed soon afterwards. The 1950–80 period was characterized by strong growth in beer production and consumption, both in Europe and in the USA. Technological innovations and increasing incomes lowered real prices and increased demand, causing growth in beer consumption.

The 1980s were the start of a major structural change in beer consumption in Europe and the USA. In Chapter 7 of this volume, Colen and Swinnen show that there is a non‐linear relationship between income and beer consumption. Beyond a certain level of income, per capita beer consumption falls instead of rises. In addition, alternative alcoholic drinks, in particular wine, became more readily available in traditional beer‐drinking countries. Hence, since 1980, per capita consumption declined in all major beer‐producing countries, with consumers switching to other beverages because of increased choice and higher incomes (Colen and Swinnen, Chapter 7, this volume). Total production continued to increase in some countries. It increased in the USA because of population growth as a result of migration, leading to an increase in total demand. In some European countries, such as Belgium, production grew because increasing exports more than offset declining local demand (Persyn et al., Chapter 5, this volume).

Growth in global beer markets has shifted elsewhere. Beer consumption in emerging countries has grown rapidly over the past 20 years. The strongest growth in beer consumption is in Russia (Deconinck and Swinnen, Chapter 16, this volume), while Brazil, India, and China have also shown strong growth in beer consumption. While per capita consumption in India is still very low, China has, since 2003, become the largest beer market in the world (Arora et al., Chapter 17 in this volume; Bai et al., Chapter 15, this volume).

(p.22) Consolidation in the Twentieth Century

The twentieth century was also characterized by a strong consolidation in the brewery industry (Table 1.2). For example, the number of breweries in the UK decreased from 6,447 in 1900 to 2,914 in 1920. In the next 30 years, the number of UK breweries decreased further to 567 in 1950. The average size of UK breweries grew from 0.9 million litres in 1900 to 2.0 million litres in 1920, and to 7.4 million litres in 1950. In Belgium, the number of breweries decreased from 3,223 in 1900 to 2,013 in 1920, to 663 in 1950. In the same period, the average Belgian brewery size increased from 0.45 million litres in 1900, to 0.51 million litres in 1920 and 1.5 million litres in 1950 (Persyn et al., Chapter 5, this volume).

The world wars played an important role in this consolidation process, in particular in continental Europe. Many breweries that had to start again from scratch after World War I decided to mechanize their brewery or merge with larger breweries. Similarly, many European breweries in the occupied countries suffered damage during World War II. These breweries needed to invest substantially in new brewing equipment. As a result, in the immediate post‐war period, many breweries merged or concentrated because of the investments that were necessary to re‐equip and modernize the breweries. Other breweries expanded their activities by producing mineral water and several types of lemonade. The production of these types of non‐alcoholic drinks did not pose high technical demands and there were substantial cost savings through scale economies in the distribution of the drinks, which could happen through the same channels (Patroons 1979).20

In the USA, the number of breweries decreased from 1,816 breweries in 1900 to 1,345 in 1915. The average size of the American breweries grew from 2.6 million litres in 1900 to 5.2 million litres in 1915 (Table 1.2). Prohibition disrupted this process.21 After the end of prohibition, 756 breweries started brewing again. By 1940, 684 breweries were still active on the American market, and their average size increased enormously after prohibition: from 5.9 million litres in 1934 to 9.4 million litres in 1940, to 25.6 million litres in 1950, reflecting a huge increase in the USA's total beer production: from 4.4 billion litres in 1934 to 10.4 billion litres in 1950 (Table 1.1 and Stack 2003).

(p.23) The consolidation process continued after World War II. Between 1950 and 1980, the number of UK breweries decreased from 567 breweries in 1950 to 142 in 1980. The average size increased accordingly, from 7.4 million litres in 1950 to 48.1 million litres in 1980. Similarly, in Belgium, the number of breweries decreased from 663 in 1950 to 123 in 1980. As in the UK, the average Belgian brewery size increased strongly, from 1.5 million litres in 1950 to 11.6 million litres in 1980.

As in Europe, consolidation in the US beer industry continued in the second half of the twentieth century. The number of US breweries decreased sharply, from 407 in 1950 to only 101 in 1980. The average size of US breweries grew from 25.6 million litres in 1950 to 219.2 million litres in 1980 (Table 1.2). Large national breweries, such as Anheuser‐Busch and Pabst, grew in importance, to the detriment of small local breweries. An important cause was scale economies in advertising, in particular with the arrival of TV (see Chapter 12 by George in this book). The five largest American breweries’ share in total USA beer production rose from 19 per cent in 1947 to 75 per cent in 1981 (Stack 2003).

Globalization in the Late Twentieth Century

During the 1980s and 1990s, an increasing number of breweries started looking abroad for additional sales. To this end, European and American breweries started to export more beer overseas, establish new firms abroad, and engage in ‘licensing deals’ in some countries where the already existing breweries started brewing their products. For example, in 1995, Anheuser‐Busch entered into licensing accords to brew Budweiser in two breweries outside the USA, namely, one brewery in the UK to serve the European market and one in China to serve the East Asian market (Stack 2003).

Also non‐US breweries went ‘global’ in the last decades of the twentieth century. In particular, companies such as Heineken (Holland), SABMiller (South Africa), and Interbrew (Belgium) made a large number of acquisitions across the globe. In the 1990s, they bought a whole series of breweries in Eastern Europe (Swinnen and Van Herck, Chapter 14 in this volume) and extended their operations in North and South America (e.g. Canada, Mexico, Brazil, and the USA) and China. These days, the holdings that resulted from these brewing companies dominate the global beer market. For example, in 2002, SABMiller plc—with its head office in London, UK—was created through the merger between South African Breweries (SAB) (the dominant brewery of South Africa, with many operations in Europe), and the second largest US brewery, Miller (Stack 2003). Another example is Anheuser‐Busch Inbev NV—with headquarters in Leuven, Belgium—that resulted from the (p.24) 2004 merger between the Belgian Interbrew and the Brazilian AmBev and the 2008 merger with Anheuser‐Busch (〈http://www.ab‐inbev.com〉).

From Ales to Lager to Light to Specialty Beers

As already explained, the introduction of the lagering technology revolutionized brewing and dramatically changed the global beer markets in the nineteenth and twentieth centuries. All over the world, traditional ales produced with top fermentation lost market share to lager beer brewed with bottom fermentation. Lager came to dominate the beer market globally. However, some breweries continued to produce other types of beer, particularly in some European regions, such as Belgium, Ireland, England, and Bavaria.

During the first half of the twentieth century, several grain shortages caused a further shift in beer brewing and ultimately in consumer preferences in the USA. First, during World War I, grain rationing was imposed by the US government, causing US brewers to brew beer of a lower alcohol content (i.e. only 2.75 per cent) (Stack 2003). Second, the ‘dust bowl’ drought during the 1930s made grain very expensive. In response, breweries looked for alternatives. Instead of barley, other and cheaper grains such as corn and rice were used. With these substitutes, the resulting lager beers were lighter in colour. They were called ‘light lager’ or ‘American lager’ beer. A few years later, during World War II, grain was again in short supply and, as a result, American brewers kept producing ‘light lager’. Consequently, by the end of the war, the ‘light lager’ had gained a major share of the North American beer market and US consumers had become used to drinking ‘light lager’ (Rabin and Forget 1996).

Later in the twentieth century, new types of beer were developed in response to a growing demand for low calorie foods and drinks (Tremblay and Tremblay 2005). Many beer producers discontinued the production of dark beer and started producing ‘diet’ or ‘light’ beers. These beers, brewed with more water relative to hops and grains and with an enzyme called amylogucosidase—added during fermentation—contained less alcohol, fewer calories, and fewer carbohydrates than the ‘regular’ beers (Robertson 1984). In 1975, Miller introduced Miller Lite, successfully marketed as ‘America's fine light beer’. The new drink became an enormous success and similar brews were introduced in the following years. Light beer has been a great success ever since and, in 2005, it was the most popular beer category in the United States (Tremblay and Tremblay 2005).

However, the growing domination of increasingly standardized lager and light beers produced by increasingly fewer brewing companies has led to a counter‐movement in the past 25 years. This reaction against consolidation and lack of variety started in the USA. During the 1980s, people started to (p.25) show a renewed interest in ‘older’ beer styles, such as porter, pale ales and brown cask ales, stout, and bitters. At the beginning of the 1990s, this trend of (re‐)appreciating and brewing ‘special beers’ and ‘older’ style beer was labelled the ‘microbrewery movement’ because of the small scale of the new breweries that started to brew different types of beer (see Chapter 8 by Tremblay and Tremblay in this volume).22 The size of these new breweries was much smaller than that of the existing breweries. However, because of their success, some of these microbreweries have since outgrown the ‘micro’ term, but are still labelled ‘microbreweries’ because of the style of beer they are producing. Some are now referred to as ‘regional specialty brewers’ (Tremblay and Tremblay 2005). At the beginning of the twenty‐first century, the microbreweries accounted for approximately 5 to 7 per cent of the total US beer market (Stack 2003 and Duffy 2010).

Although this process first started in the USA, similar developments can now be observed in many traditional beer‐consuming countries. While the share of the ‘microbreweries’ in total global beer production is still relatively small, these breweries have influenced the beer markets significantly and in various ways. In countries like Belgium, beer brewing in (collaboration with) monasteries and abbeys has known a remarkable revival. Abbey beers are the fastest growing segment of the Belgian beer market (Persyn et al., Chapter 5, this volume), but only a few of these abbey beers—mainly the very popular ‘Trappist’ beers—are still produced in monasteries nowadays. The other abbey beers are either based on old recipes from monasteries or they represent an attempt to brew ‘abbey‐style’ beers in commercial breweries. The latter reflects an important strategy of the larger brewing companies. In recent years, many large beer brewers have tried to ‘copy’ the taste of the ‘microbrews’ or have bought (shares in) microbreweries or abbey‐type beers (Stack 2003).

As a concluding comment in this review of the changes from the nineteenth to the twenty‐first centuries, it is interesting to point to Tremblay and Tremblay's (Chapter 8, this volume) observation that today the largest US‐owned brewery is the Boston Brewing Company, which started only a few years ago as a ‘microbrewery’. This is a consequence of the simultaneous process of consolidation and global mergers and acquisitions of traditional (lager and light (p.26) beer) brewers (which has caused all the large US breweries to be acquired or to be majority owned by foreign brewing companies) and the growth of microbreweries. This is a powerful illustration of the dramatic changes that have taken place in global beer markets during the twentieth century and which are ongoing in the twenty‐first century.


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(1) Nelson (2005: 1–2) defines beer as: ‘any sort of maltose‐based alcoholic beverage, whether or not the ingredients include other products (fermented or not)’ and ‘a fermented drink made essentially from malted cereal, water and yeast’.

(2) Sophocles (496–406 BC) considered beer to be ‘healthy’ and was in favour of a ‘diet of modera-tion’, which consisted not only of bread, meat, and vegetables, but of beer as well (Rabin and Forget 1998). Xenophon (430–354 BC) wrote that beer could be ‘very good’ once people got used to it (Nelson 2005). Diodorus of Sicily (first century BC) saw both wine and beer as ‘gifts from the gods’ and according to him, it was just a matter of climatological conditions which of the two beverages was produced. This meant that in places where grapevines could not grow, beer would be produced instead (Nelson 2005).

(3) For example Cornelius Tacitus (AD 56–120) referred to the drink of the German Teutons as: ‘a horrible brew fermented from barley or wheat, a brew which has only a very far removed similarity to wine’ (Rabin and Forget 1998). Later on, the Roman Emperor Julian (who ruled from AD 361 to 363) wrote a poem about what he called the ‘two Dionysi’, i.e. two gods, one for wine and one for beer. His poem goes as follows: ‘Who and from where are you Dionysus? Since, by the true Bacchus, I do not recognize you; I know only the son of Zeus. While he smells like nectar, you smell like a billy‐goat [or spelt]. Can it be that the Celts because of lack of grapes made you from cereals? Therefore one should call you Demetrius [that is born from Demeter or born of two mothers], not Dionysus, rather wheat‐born [than fire‐born] and Bromus [that is, oats], not Bromius [that is, roarer of the thunder].’ (Nelson 2005: 30–1).

(4) ‘The English abbot Aelfric in a tenth‐century work has a novice answer the question of what he would drink with the following response: beer if I have it and otherwise water…In the early days of the Cistercian reform movement around 1100 the monks, aware that wine was allowed by the rule of St Benedict, were too poor to drink much of it and so had to settle for beer or just water…Early medieval churchmen both inside and outside of monasteries may have preferred wine but it seems certain that they commonly drank beer’ (Unger 2004: 29–30).

(5) According to the rule of Saint Benedict (AD 480–547), the founder of ‘modern monasticism’, the Benedictine monks not only had to live in their own community and be self‐sufficient, but they also had to offer hospitality to travellers and people in need (Nelson 2005).

(6) Breweries that were located on the left bank of the Schelde River were subject to German rule and obliged to use grut. Several of them currently still brew sour beers (which is due to grut not being protected against acidification by bacteria). Breweries located on the right bank of the Schelde were under German rule and allowed/obliged to use hops. Today these breweries still produce less sour beer.

(7) These Hansa brewers were the first brewers to develop a beer that could be transported great distances over land and sea (Meussdoerffer 2009).

(8) The purity laws had been issued by cities as part of urban legislation and they never attained more than local significance. In 1516, however, Wilhem IV, the Duke of Bavaria, extended this law to the whole state of Bavaria (Meussdoerffer 2009). However, in some rural regions of Bavaria that escaped state surveillance, beer was still brewed by adding ‘grut’. In this respect, the Reinheitsgebot was seen by some as an early Protestant measure to break the dominance of the Grutrecht through which the often Catholic local rulers earned a lot of money (Unger 2004). The Reinheitsgebot was ultimately extended to the whole of Germany, became federal German law in 1919, and was only repealed in 1988. For a more detailed account of the issues surrounding the Reinheitsgebot, we refer to Chapter 3 by Van Tongeren in this book.

(9) This new beer is associated with the brewery of Pilsen (Plzen) in West Bohemia (now part of the Czech Republic) from which the name ‘Pils beer’ derives.

(10) At first and in order to gather as much knowledge as possible, both Sedlmayr and Dreher visited the breweries of England, where newer and more ‘scientific’ brewing methods had already been introduced. Subsequently, they tried to implement the beer‐brewing methods they had learned about in England in their own breweries at home. In this respect, Sedlmayr started to apply the English ‘pale ale’ brewing techniques in his ‘Spaten’ Brewery in Germany. In addition and after taking over his father's brewery in Vienna in 1836, Dreher started experimenting with the English malting process.

(11) In 1836, the German Professor Cajetan Kaiser started teaching on brewing. A real ‘brewing school’ was established in Munich to conduct further research into the brewing of ‘lager beer’. In 1876, following the ‘Munich example’, new brewing schools were established in Paris and Berlin. Belgium followed in 1887, with new brewing schools in Ghent and Leuven (Patroons 1979). In the USA, a zymotechnic institute was established in 1872 (Baron 1962).

(12) Three scientists, namely, the Dutch Antoni Van Leeuwenhoek (1632–1723), the German George Ernst Stahl (1660–1734) and the Dutch Hermann Boerhaave (1668–1738), all contributed to the understanding of how yeast causes fermentation. Building further on the theories of these three scientists, the French scientist Antoine Laurent Lavoisier (1743–94) demonstrated for the first time that, through the process of fermentation, sugar molecules were broken down into alcohol and carbon dioxide (CO2) (Hornsey 2003).

(13) Pasteur (1866).

(14) Pasteur (1876).

(15) In 1769, James Watts (1736–1819) considerably improved and reduced the operating costs of the steam engine that had been invented by Newcomen in 1712.

(16) In some regions, there was a kind of ‘excise duty’ on glass. For instance, in England and Wales, there was such an excise duty from 1745 to 1845. This stalled the further development of glass bottle technology in those regions for many years.

(17) Data from the USA show also a clear historical change in the way beer was sold. In the early twentieth century, 85 per cent of beer was kegged and sold in bars or saloons and only 15 per cent of the beer was canned or bottled. By 1935, 30 per cent of the sold beer was canned or bottled, partly caused by the spread of home refrigerators, which could preserve beer, and the decrease in the price of canned and bottled beer. After World War II, more and more beer was sold in bottles. By 1980, 80 per cent of total beer sales was packaged in bottles or cans and only 20 per cent of beer sales consisted of draught beer (Stack 2003). By 2000, beer packaged in cans and bottles represented 91 per cent of total beer sales in the USA, whilst draught beer only represented 9 per cent of these sales (Tremblay and Tremblay 2005).

(18) An enormous drought during the 1930s transformed many grain fields into a massive ‘dust bowl’. As a result, grain became very expensive and many breweries started to look for alternatives.

(19) These adjustments to using cheaper substitute grains had important lasting effects. To this day Budweiser and Bud Light—the main US beer—are brewed based on a portion of rice.

(20) In the USA, in the same period, all large mergers were vertical, as horizontal types of merger were forbidden by the country's antitrust laws. For a more detailed discussion of postwar developments in America, see Chapter 13 by Adams in this book.

(21) Some American breweries—e.g. Anheuser‐Busch—were granted special licences by the American government to produce beer for medical purposes. This made it possible for those breweries to keep their staff active and still to use their equipment and plant to make beer, which gave them a competitive advantage over the breweries that were not granted such a government licence (Stack 2003).

(22) The term ‘microbrewery’ can have different meanings. Originally, the term—which was already in use in the UK in the late 1970s—was used to describe the size of the breweries producing these older types of beer, i.e. breweries with a beer production of between 5,000 to 100,000 barrels a year. Very quickly, however, the term was used to denote a new and ‘fresh’ approach to brewing, one that, instead of competing on the basis of low prices and advertising, tried to compete on the basis of the inherent product characteristics, leading to a greater quality and diversity of the ‘end beer product’, i.e. in terms of taste, added flavours, the freshness of the ingredients, etc. When this kind of ‘microbrewing’ became more popular in the USA as well, the term was used for American breweries that adopted the ‘brewing philosophy’ described above and that produced fewer than 15,000 barrels of beer a year (Stack 2003).