No light at the end of the tunnel for brewers

How do you reconcile reports of millions of Venezuelans seeking food anywhere they can find it, including trash cans and dumpsters, with a recent Reuters article (27 September 2017) that local craft brewers are creating a buzz?

As writes Reuters, the Social Club in Caracas is producing a high-end craft beer, with a single bottle costing what a minimum wage worker earns in two days plus his food voucher entitlements. Although beyond the reach of most of Venezuela’s 31 million people, the wealthy obviously can afford to go “bottoms up”. Owners of the Social Club claim they regularly sell out their 3,000 litres produced each month.

“Even though this is a luxury product for the market and for Venezuelan standards, I can say with all sincerity that this is the cheapest craft beer in the world. By that I mean a bottle or glass of craft beer anywhere in the world easily costs more than two dollars and here we're selling a glass of craft beer for less than a dollar,” one of the Social Club’s owners was quoted as saying.

The figure – USD 0.80 for a glass of craft beer – is correct but matters look different if you bear in mind that Venezuela’s monthly minimum wage has only recently been raised to 136,543.40 Bolivares, which is USD five. On top of that every minimum wage earner – the majority of working Venezuelans – is entitled to food vouchers worth 189,000 Bolivares (about USD seven) per month. But those vouchers can only be used to buy food, not beer.

For comparison, a crate of beer (eight litres) from the country’s two major brewers, the leader Polar and its smaller rival Regional, costs approximately USD two. Despite the relatively low price of beer, the two major brewers have seen their beer output drop massively in face of the country’s deepening economic crisis.

Standing at 19.7 million hl in 2015, beer production halved to 9.5 million hl in 2016. In 2017, the two are estimated to produce 7.5 million hl beer (Polar 6.5 million hl and Regional one million hl).

There are now 30 craft brewers in the country, according to the Craft Beer Association of Venezuela, that supply high-end liquor stores and restaurants. Their market share is less than one percent.

Insiders say that all of them are garagistes that operate without any permits, not even from the fire brigade. Legally, they are not allowed to sell their beers because most have not registered their businesses. That’s why many of them package their beers in old champagne bottles, sourced from dumpster divers.

But President Maduro’s government is turning a blind eye to their activities, so much so that the Ministry of Culture can effectively subsidise some of them.

According to Reuters, craft brewers believe there is room to grow and they are preparing to toast an eventual economic rebound.

That rebound may be long in coming. No official inflation data have been available from the government since 2015, but the opposition puts the figure at 250 percent in the first seven months of this year, says the Guardian newspaper.

Venezuela used to produce more than two-thirds of its food, and import the rest, but those proportions are now reversed, with imports making up around 70 percent of what the country eats.