Judging Beers by Sam Fitz Vol. 14 – Best Beer City! And The Gray Market

Sam Fitz is a Certified Cicerone® and the Beer Director at Meridian Pint and Smoke & Barrel.

The DC beer community got a loud shout-out from the staff at Maxim magazine, who named the nation’s capital “Beer City of the Year” in their most recent edition. While the rapid rate of growth of our local beer scene is undeniable, cities like Philadelphia, Asheville, Chicago, San Francisco and San Diego have long had a hold on such accolades. Maxim catapulted DC to the front of the pack and cited its bars, breweries, and “gray market” as the primary factors. Bars and breweries? Obviously. The “gray market”? It may be what sets us apart from other US markets, but it is certainly not what makes DC such a great beer city.

The structure by which beer is sold in this country was born out of the failure of Prohibition. To keep brewers distanced from their consumers, beer must be sold first to a distributor and then to a retailer. This simple principle, the three-tier system, operates from coast to coast with few exceptions. The “gray market” in DC is one of them, and it is created by a provision in DC’s legal code:

An importation permit shall authorize the licensee to import, transport, or cause to be imported or transported, alcoholic beverages into the District. An importation permit shall be issued to the licensee under a retailer’s license, class A, B, C, or D, and a pool buying agent if the Board is satisfied that the alcoholic beverages bearing the same brand or trade name are not obtainable by the licensee from a licensed manufacturer or wholesaler in the District in sufficient quantity to reasonably satisfy the immediate needs of the licensee and when the licensee has paid the appropriate taxes.

What this essentially means is that if you have a restaurant in DC and desire to carry an alcoholic product not adequately supplied by the three-tier system, then you can procure it yourself, provided you give you the District its share in the form of taxes. The origins of this provision as well as its age are unknown to this author, but more than likely it was not enacted with craft beer in mind. Regardless of the reason, restauranteurs in DC are exercising their right to bring in products never before seen in our market.

Continues after the jump.

Outside the District, none of this is legal. If a distributor doesn’t carry a product you want, there is little recourse. Historically, mega-breweries found ways to control local distributorships and kept other brands out of the market simply by not providing them. This was one of the major initial obstacles to the growth of craft beer, and the pioneers of the craft movement had to fight hard to make their product available to the consumer. Stone Brewing Company in San Diego and Two Brothers Brewing Company outside Chicago both were able to establish their own distributorships that championed not only their fine ales but those of their compatriots.

Times have changed and craft beer is becoming big money. While national sales of American light lagers are stagnant, craft beer is growing every year. It didn’t take long for distributors, old and new, to change course and start slinging the suds of the smaller guys. The DC gray market is fun, but its contribution to our beer community pales in comparison to that made by the wide array of craft beers sold everyday through our many distributors.

DC gets a lot of beer. Unlike some other markets with only a few distributors, we have nearly a dozen, and the best way for them to distance themselves from the pack is to pick-up more and more craft brands. DC is also an attractive market to brewers themselves who want their beer sold in the nation’s capital. Many of them are involved in beer politics and travel here frequently for meetings and conventions. When they come, they want to drink and support their beer, and many have established distribution in DC after visits. Schlafly beers are only available in a 200-mile radius from St. Louis, and of course in the District (Dan Kopman, co-founder of Schlafly, is the head lobbyist for the Brewers Association and visits often). Travel 40 miles up the road to Baltimore and you won’t find many of the brands common in our marketplace, like Bells and Founders. Take a moment to appreciate the vast number of beers you are exposed to in DC.

Flooding a market with a myriad of brews is one thing, but consumers actually drinking and supporting all of them is quite another. The best thing about beer in DC is the public’s willingness and desire to drink widely, try new products, and keep up on what is available. There is always an interest in what is new, whether it’s restaurants, bars, or beers, and DC residents follow social media all over the city for new experiences. Trying new things is cool these days, and it certainly is helping craft beer explode in this city. DC is also a geographically diverse community and sometimes it is as simple as people enjoying the beers of their home state. No matter the rationale, Washingtonians’ ability and willingness to support the myriad craft beer brands distributed here is the biggest asset to the DC beer community.

Gray market beers surely make up much less than 1% of DC craft beer sales and are really more of a novelty than anything else. New, small breweries like Hill Farmstead in Vermont or Oxbow in Maine find that the gray market allows them to access new consumers from time to time without dealing with sometimes prohibitive distributor contracts, and both have sent beer when they have the ability to do so. Bigger breweries that simply do not have the excess capacity to adequately supply the DC market will occasionally send beer through the gray market to support events their brewers are holding at our fine beer establishments. And finally, restauranteurs who wish to stand out in a sea of great beer will take importation upon themselves to do something different, new, and fun. (Guilty as charged).

DC’s gray market for beer is a peculiar benefit of drinking in the District, and perhaps it is what distances us just a bit from other great beer cities like Philadelphia, but it certainly is not what makes DC such a great place to drink well. The national praise is awesome, but let’s appreciate what we really have: a blossoming community eagerly supporting an impressive array of craft beers.

18 Comment

  • DC has come a long way. When I moved here 12 years ago from the West Coast I was truly bummed to learn that my beer options were pretty much macros, Bass, and Guinness. For a long time, Baltimore’s beer scene was way better.

  • Beer city is a tough measure, beer region seems more apt to me because many breweries are outside of urban areas. My favorites then would be Portland/Oregon, Philadelphia/SE PA, SF Bay Area and Baltimore/Frederick.

  • DC has gotten much better, but saying it’s the best beer city in America is ridiculous. The gray market stuff was interesting and seems to have helped DC bars and restaurants to offer many more beers than most cities. For my money, though, San adiego’s beer scene is light years ahead of DC. The San Diego area is the home of brewed like Stone, Ballast Point, AleSmith, Green Flash, Port Brewing, Lost Abbey, among others. DC can’t come close to competing with that. And at beer bars/restaurants like the Tap Room and Pizza Port they have great beer menus that are much, much cheaper than in DC. Overall, DC Brau has gotten the craft brew scene reinvigorated here and Churchkey, big Hunt, Rustico, Pizzeria Paradiso, Meridian Pint, and others have offered very strong beer menus (at relatively high prices), but DC has miles to go before it deserves to be called the Best Beer City.

  • Can’t you guys just be happy and root for the home team?

    As much as everyone hates on suburbanites, at least most of them are from around here and have an affinity for the region rather than figuring out “what’s wrong” with it.

    • Since when did being realistic become an attack on DC. Everyone is “rooting for the home team,” but when very little good beer is made in DC and all of the “imports” are overpriced, taking on the mantle of Best Beer City is ludicrous. I hope DC gets to a point where it deserves that label.

      • Perhaps it was measured in terms of “how far it’s come” for the “of the year” award rather than on absolute terms. If on this scale of relativity, then perhaps it is deserved.

  • tried the Oxbow beers this weekend and they were fantastic — hope they make regular appearances at Meridian (or elsewhere in DC)!

  • So what are some examples of gray market beers that influence this distinction, particularly if it makes up only 1% of the market?

  • Let the rent at Pizza Port, Tap Room, or Tornado top $45 per square foot. If it did, you could guarantee the prices would be more in line with the DC area.

    • Even beers at the Dogfish Head restaurants (all in the suburbs) are higher than in SD, so your theory is unconvincing. Unfortunately, people in DC have been conditioned to expect high prices for beer and wine, no matter the quality. A better local craft brewing industry might change that.

  • The title of best anything is obviously debatable. But DC honestly is in the conversation.
    Sure San Diego has more and better beer brewed in the area and Portland’s hippie/hipsters make craft beer more pervasive, but few places compare to DC when you factor everything in, in my opinion.
    The average restaurant these days has a decent beer list. The bars of the city are all for the most part bike/metro accessible (no driving issues). Birch & Barley is honestly in the conversation for best beer bar in the nation (just like Brickskeller was 25 years ago). The political aspect allows for some unique situations -like Schlafly’s essentially being a St Louis beer AND consistently distributing to DC or the brewery takeover/dinners at Pizza Paradisio/Churchkey.
    Its a good time to enjoy good beer, in particular in DC.

    • Throw in the fact that if DC doesn’t have it, it is possible that Maryland or Virginia does. The proximity to 2 states is also an added bonus (not so much the case with NY/NJ or OR/WA, etc.)

    • I agree with your assessment that places like Churchkey (although it’s loves Bell’s a little too much) and Paradiso are pretty sweet when it comes to serving great beers. I also think D.C. has a bunch of great beer-focused liquor stores compared to other towns (shout out to Mama at Virginia Market).

      I think D.C. lacks two things that keep it just below elite beer town status. One, the breweries aren’t yet ingrained as part of the larger community. You go to Boulder, for example, and Oskar Blues is having kick ass events every day of the week. Go to San Diego, and the breweries are sponsoring this and that and people dig it.

      Second, and the one thing that drive me nuts about D.C., is the lack of real brewpubs (other than what, Cap City and arguably Gordon Biersch…not counting Mad Fox and Dogfish in VA). I love going to Victory Brewing and being able to have a meal while I sample beers, especially the funky stuff they pour only at the brewpub. Denver is such a great beer city for this very reason.

      Fix these two things, and I think D.C. has a better claim to being a badass beer town.

      • Absolutely right. That’s what I was trying to say (so inelegantly) above. The best beer town has to be a place where they make a lot of great beers (DC Brau is a small start and not yet a “great” brewery) and where people know about and appreciate good beer (not just those wealthy enough to afford overpriced and sometimes pretentious beer bars). The breweries and the local beers have to be a part of the social fabric in a way they’re not here (yet). On the other hand, in DC tons of people get excited about PBR and Natty Boh. That alone disqualifies DC from deserving the title.

        • Disagree with the hatin’. DC Brau has been hosting a weekly bourbon aged porter tapping for the past month, and a recent “tap takeover” of some top beers (plus awesome events that the other new breweries are hosting). Madfox brings home the GABF hardware. Greg Engart is up for a beard award. Several of the beer bars are recognized nationally. From where DC used to be- I’d call that a year worth celebrating.

  • Do you think that the gray market situation in DC serves to encourage distributors to broaden their selections?

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