The 1907 Bavarian Beer War

Photo Credit: Eric Kilby via Compfight cc

Touring Bamberg, northern Bavaria, our tour leader mentions the local 1907 Beer War.  The town’s three brewers announced that they were joining to raise suggested retail prices from 10 to 12 pfennigs and charge retailers commensurately more. The pub owners felt the public would be angry and refused to buy from the cartel.  After one dry day they instead began “importing” beer from nearby towns. The public’s thirst was slaked — still at 10 pfennigs a glass.  After a week of no beer sales, the local brewers caved in and cut their asking price to 10 pfennigs a glass.   Moral of the story: even with just three players, it’s hard to maintain a cartel if there are ready substitutes for the product. (HT to MP)