Monday, April 11, 2011

Monday Musings: Brewmasters Canceled; Spending Cuts? What Spending Cuts?

Conspiracy theorists will love this. Anthony Bourdain claims that Discovery Channel canceled the Brewmasters series (featuring Sam Calagione of Dogfish Head) because big beer companies threatened to pull their ads. (We’re talking hundreds of millions here.) Of course, one might wonder why big beer companies care about small breweries. After all, the big two (Anheuser-Busch InBev, and MillerCoors) with $12.2 bil. and $6.4 bil. respectively account for over three-quarters of the $23.7 bil. market (Beverage Industry, 2009 sales). The only real craft brewery to make the top 10 is Boston Beer (maker of Sam Adams). But here’s the thing: the craft brewing segment, while still tiny compared to the big boys, is the only one growing, up by 12% for 2009, the 6th year of growth, and the 4th year of double-digit growth. The big companies want a piece of that action, hence their “stealth” craft beers and more aggressive attempts to control the market.

I poked into the details of the spending cuts announced in the last-minute budget compromise reached on Friday. There are far few actual “cuts” than the $38 bil. figure in the headlines suggests. There’s some $10 bil. in leftover funds that haven’t been spent (e.g. $1.7 bil. left from the latest census). There’s another $10 bil. from appropropriations accounts that had been used for earmarks, but these have been banned already. And they’re claiming $5 bil. in savings by capping a fund for victims of crime. By the arcane accounting rules for federal budgets, they can claim “savings” for an entire year by capping something. Right there, I count $25 bil. that’s not really cuts at all. As I mentioned a month ago, anything that doesn’t touch defense spending and entitlement reform, or that doesn’t include tax code reform and increases in revenues is a waste of time.

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