Bottling Up Innovation in Craft Brewing: A Review of the Current Barriers and Challenges

5 Pages Posted: 19 Oct 2014

See all articles by Matthew D. Mitchell

Matthew D. Mitchell

George Mason University - Mercatus Center

Christopher Koopman

Mercatus Center at George Mason University

Date Written: June 4, 2014

Abstract

"Build a better mousetrap," the old saying goes, "and the world will beat a path to your door." Brew a better beer, however, and regulators will tie your door shut with red tape. Start-ups in the craft brewing industry face formidable barriers to entry in the form of federal, state, and local regulations. These barriers limit competition and innovation, reducing consumer welfare.

While customers and new entrants are harmed, these regulations can be a privilege to incumbent firms and industries. There are various political and historical reasons for the persistence of these rules, despite the fact that they lack economic justification. Policymakers interested in economic development should eliminate regulations to help firms overcome confusing and unnecessary barriers to entry and to level the playing field between established firms and their newer, smaller rivals.

Keywords: Brewing, Barriers, Entry, Beer, Regulations, Innovation

JEL Classification: D72, O31

Suggested Citation

Mitchell, Matthew D. and Koopman, Christopher, Bottling Up Innovation in Craft Brewing: A Review of the Current Barriers and Challenges (June 4, 2014). Available at SSRN: https://ssrn.com/abstract=2511022 or http://dx.doi.org/10.2139/ssrn.2511022

Matthew D. Mitchell (Contact Author)

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

HOME PAGE: http://meractus.org

Christopher Koopman

Mercatus Center at George Mason University ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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