(Lack of) Barriers to Entry in Beer Brewing

More commercial insights are forthcoming from "Grain and Beer" episode of The History of the Germans podcast. Unlike most crafts, any household could brew beer. But since not everyone could brew it well, towns set out to regulate it by limiting the number of houses where it was allowed. Fortunately, the number was set high enough for competition to thrive.

Since there were no guilds, the way the cities tried to control the production and to maintain standards for health and safety was by restricting the number of houses that were allowed to make beer. Hamburg for instance had 500 houses where the making of beer was allowed. If someone wanted to become a brewer, he did not have to marry some brewer’s widow, schmooze the guild masters and pass an examination, what he or she needed to do was buying one of the houses where brewing was allowed. That is why you often find breweries in Germany being called “Brauhaus” meaning brewer’s house, referring to the physical location where brewing was allowed. 

Hanseatic beer used hops with its distinct taste but also acted as a preservative. This allowed it to be exported even at exorbitant transport costs. 

... Einbecker Beer was famous across Northern Europe and was drunk as far north as Bergen and Stockholm, another 900km onwards by boat. Why would people pay 5X for the imported version of a daily staple? Something they drank more than 200 litres each per year.

Our pod-caster, the erudite Dirk Hoffman-Becking, claims that German brewers convinced far flung Europeans that their beer was a luxury good that signaled the status of its consumer. I conjecture, without evidence, that setting a low entry barrier and mild standards regulation generated competition that kept production costs down and product quality up. One need not be a beer snob to appreciate an objectively better product not available from locals.