Filed under: Economics of Eating, Food Costs and Prices, Portioning, Uncategorized
According to The Wall Street Journal, as beer prices rise in response to the rising costs of raw inputs, bars and restaurants are serving less than a pint of beer by substituting thick-bottomed 14 oz. glasses and by pouring more head than they used to. Jeff Alworth, of the Honest Pint Project, has more details.
To me, this problem presents an opportunity to think about the sorts of problems that regulation by the state is able to solve and the sorts of problems that are best left to actors in the market without legal intervention. I can think of three basic approaches:
- This is a simple false advertising problem, and can be handled by the existing body of tort and consumer protection law.
- Regulation is necessary because this is a harm that will not be adequately addressed either by false advertising tort law, nor by market action.
- Little or no government action is necessary because, to the extent that this is really a problem, people will stop going to establishments that short them on beer.
I think that the first position is the weakest, simply because of how expensive it is to bring an action in tort. It’s certainly not worth it in this sort of a case, and if I were a manager I would shrug off any customer who threatened to sue me for false advertising over a few ounces of beer. On the other hand, I would be careful that my state’s Attorney General didn’t get too many complaints about the practice, since in many (if not all) states the A.G. has a consumer protection division that handles exactly this sort of problem. However, the problem only exists as long as the bar is selling their beer in “pints” so a simple change of menu text would probably protect the company. That’s where the thick-bottomed 14 oz. glasses become useful to the bar: they look like pints, but as long as you’re not calling them “pints” you’re probably safe here.
The second option probably has some legs: I could imagine a regulation requiring that beer be sold in glasses with a line etched in them at the 16 oz. mark, similar to the way it is sold in England (although in England, if I’m not mistaken, the etching is of a 19.2 oz. Imperial pint). This has some merit, as it allows the patron a ready way to determine whether he is being ripped off — he can see if he’s getting a short pour. Also, a glass that were etched at a smaller amount but marked as a pint would be a pretty good badge of fraud, making a much easier private suit.
I think that the third option, although interesting, has little merit in the present case because because the patron will bear larger costs in policing the sizes of the pint he is served than the benefits he will get in getting the right amount of beer. The costs of policing are fairly fixed for all sorts of transactions: you have to verify that you are getting what you think you are getting, and if you aren’t, you have to bring it up with the vendor; you incur a social cost for bringing it up, and quite possibly another social cost for even policing it in the first place — it isn’t terribly cool to pour your beer into a measuring glass. The benefits, in this case, are probably no more than three ounces of beer. I have trouble imagining that beer prices will rise to a level such that the price of three ounces of beer is worth policing one’s pour amount.
It is difficult for me to see where the efficient outcome lies. It may be true that when you’ve paid your five dollars for a pint, you should expect a full pint and not just 14 oz., but what if, in order to stay in business, a bar would have to charge $5.75 for the full pint where it only charges an even $5.00 for the 14 oz. beer? What if the bar has determined that $5.00 is the best price-point for a beer, and has had to adjust its portioning accordingly, rather than keeping portioning the same and raising the price? What if people buy more beer by volume at $5.00 / beer than they do at $5.75 / beer due to perceptions about how much money they are spending? None of our answers to these questions justifies calling a 14oz. glass a pint: that’s false advertising. But maybe a bar should be able to sell beer in any amounts it wants.
Readers, I crave your thoughts. Is this a problem that regulation can efficiently solve? What sort of regulation? What would an efficient outcome look like?