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shocking start of 2021in US market

The Incredible Shrinking Liquor Bottle

Distillers in the U.S. can now use the smaller 700ml bottle that is standard in most parts of the world. So, what does that mean for consumers in America?

Source: https://www.thedailybeast.com/

Did you see the birth announcement? A few weeks ago, the standard 750ml liquor bottle was blessed with a little brother! The new bottle looks just like its older sibling, but is 6.667 percent smaller, holding 50 milliliters less.

And as younger brothers sometimes will do, the little scrapper may well overtake and displace his older brother in the coming years, as 700ml bottles gradually replace those holding 750ml.

In theory, the shift to the smaller bottle will mean the price of liquor will be six percent less. Yay! But if history is any guide, the price break won’t actually happen. That means you’ll probably be paying the same for less. Boo!

Here’s how the newcomer arrived, and why.

The feds have regulated the size of your liquor bottles since the 1930s, when Prohibition was repealed. The U.S. Congress gave the agency that would become the Alcohol and Tobacco Tax and Trade Bureau (TTB) the authority to regulate bottle sizes for two key reasons: To prevent sellers from deceiving consumers by shorting them. And more critically, standard sizes made it easier to track federal taxes companies owed on liquor they sold.

Regulations rolled out in 1934 and 1936 that designated a roster of imperial units that could be used to sell liquor. That included the familiar quart, pint, and fifth (a fifth being a fifth of a gallon), but also oddballs, including a 1/16th pint (that is, an ounce), which was available only for brandy. The feds allowed 38 different bottle sizes.

This set of measures lasted several decades until President Gerald Ford signed the Metric Conversion Act in 1975, which made decimal-based metric units “the preferred system of weights and measures for United States trade and commerce.” The TTB followed up a year later, mandating a change from imperial to metric; producers had four years to phase out the old and bring in the new. Allowed bottle sizes were limited to six, ranging from 50ml (the “nip” or “mini”), up to the 1.75 liter “handle.” (Two additional metric sizes were added in later years.) Ads in newspapers featured helpful metric conversion tables to ease consumers into the new and disconcertingly European era.

So why was the 700ml bottle added to the metric family last month? Blame a global coalition. In this case, distillers, distributors and exporters all pressed for allowing new sizes. It wasn’t a new attempt-Washington state, for instance, lobbied for the change back in 1987, arguing that the restrictions on size stifled price competition. The feds didn’t agree back then.

This time, those pushing anew for change argued that the United States had become an isolated island of 750ml bottles amid a sea of 700ml bottles-the standard size most everywhere else in the world. (India is one other significant 750ml island.) So those wanting to export liquor-from either the U.S. to Europe, or vice-versa-had to order two sets of bottles and calibrate their equipment for two separate bottling runs. That was nobody’s idea of frictionless trade.

The TTB was now so receptive to change that it actually proposed eliminating all size restrictions a couple of years ago-if a distiller wanted to bottle their devil’s liquor in a 666ml bottle, they’d be welcome to do so. Regulators noted that one of the original reasons for establishing set sizes-to monitor liquor taxes-no longer applied. “Limiting standards of fill is no longer necessary to ensure accurate calculation of tax liabilities or to protect the revenue,” the TTB noted in 2019, noting that it now “verifies tax liability on the basis of a producer’s production and removal records.”

For the most part, distillers did not much care for the prospect of an anarchic world of free-range bottle sizes-during the public comment period, 110 wrote in favor of eliminating size restrictions, while 1,141 were opposed. “We were persuaded by commenters’ arguments that a proliferation of sizes would cause consumer confusion, differing state container size requirements, and market disruption,” said Thomas Hogue, director of congressional and public affairs at the TTB.

“The TTB basically seems to have taken a sort of middle ground,” says Jarrett Dieterle, author of Give Me Liberty and Give Me a Drink!, a guide to cocktails and “outlandish” liquor laws, published last year. “Don’t eliminate all size standards, but also add new options.”

Distillers who switch to 700ml bottles for domestic sales will now have the option of exporting with less fuss and bother. (Although they will still be required to use labels that meet the labeling standards of their export markets, which can vary widely.) The cost of maintaining separate bottling runs for two markets might be easily absorbed by large, legacy producers, but for craft producers the streamlining reduces a significant headache, and lowers a barrier to export markets. (There are still the new and onerous tariffs in the European Union, but that’s another story.)

Maggie Campbell, president and head distiller at Privateer Rum in Massachusetts, is in favor of the 700ml bottles, since Privateer has begun to explore markets overseas. And she believes the smaller bottles will prove popular with bartenders, since they’re marginally easier to handle. She’s recommending that craft distillers make the switch to the smaller bottles, as Privateer is considering. “When we run out of 750mls we have in stock, we’ll likely go to only 700mls,” she said.

Will slightly smaller bottles be followed by slightly smaller price tags? It’s too soon to predict, but if history is any guide you might not want to bank your savings just yet.

“You may be surprised to learn that the half-gallon has shrunk by almost 5 ounces to 1.75 liters,” the New York Times reported in 1976, when metric bottles first arrived. “But don’t worry. There should be a similar decrease in price, too.”

Was there? I went back and looked at newspaper ads from the same liquor store a year apart. At Chris’s Liquor store in Austin, Texas, a half-gallon of Jim Beam sold for $9.29 in 1977. A year later, the same store sold the smaller 1.75 liter handle of Jim Beam for $9.27. Henry McKenna bourbon sold for $10.99 in 1977, with the price unchanged in 1978, when the bottle held nearly eight percent less. Do not be distracted by the low price of a half-gallon of whiskey. The point is that liquor producers or liquor stores pocketed the bonus.

“I think it’s one less dram we get per bottle that they’ll charge us the same amount for,” wrote one commentator recently on Reddit.

If it’s any consolation, shrinking size while maintaining price is a common practice among food products across the board. It even has a name-“shrinkflation”-and it can affect everything from coffee (bags switching from 16 oz to 12 oz) to laundry detergent sizes to tea-a box that once contained 20 bags will remain the same size and price but now holds just 12 bags. It’s a simple way to boost profits without boosting prices.

Sad, I know. But because you’ve endured so much over the last year, I’m saving the good news for last: the 700ml bottle size surely means more rare products from abroad will find their way to American shelves. If a producer of Scotch or a European importer of rare rums has a mere cask or two of a fine spirit, it’s not worth setting up dual bottling runs for two markets. But it is a different story if a 700ml bottle can be as easily sold in America as in Europe, so expect to see a broader selection of interesting spirits.

All this means more work for the lover of liquor: sifting through shelves, paying attention to bottle sizes and scouting for new additions. And it will surely be more expensive-but that’s always the case with a growing family.