Editor’s Note: Civil Beat is examining why life in the islands is so expensive in an ongoing series, Living Hawaii. Over the next year we will look at what’s behind high prices here and discuss ways to bring them down.

In the islands, it is easy to cry over spilled milk because it is so expensive.

But we cry over our beer, too. Same reason.

A slightly higher cost for beer makes sense for regional American microbrews, European stouts and lagers, and plenty of other beers, but the extra miles on a ship only explain a percentage of the additional cost.

David Closs, a professor of supply-chain management at Michigan State University, says that the “big factors” normally include the cost of shipping as well as the scale of local demand for a product and how much of it can be produced in one place.

There are other price-boosting factors specific to Hawaii. These include shipping regulations, excise taxes and other fees on specific products and packaging. Hawaii has special agricultural inspection requirements. It also has some of the highest alcohol taxes in the nation.

Still, it’s hard to fathom how a six-pack of Longboard could be more expensive in Hawaii than in Manhattan.

It all starts with the selling price that Kona Brewing Co. sets for consumers.

Kona Brewing Co. President Mattson Davis says his brewery does pricing surveys “all the time.” The key is first identifying the target consumer, and understanding what he or she is willing to pay.

For most companies, that is usually a target price range, rather than a specific amount.

From there, getting down to the actual price that you pay at the store means the company has to ask itself questions about production and distribution: How much of a cut do distributors expect to earn — 20 percent or 30 percent? How much will the company likely lower prices when it offers special deals? How much is the wholesaler willing to spend on marketing? What sort of local and state taxes will be added on?

And of course, the store where the beer is sold might tack on another “12 cents or even 24 cents,” Davis says.

The end result can be unexpected. A six-pack of Longboard Lager on the Lower East Side of Manhattan will cost you $9.99, but you’ll have to pay an extra dollar for it at the Safeway on Kapahulu Avenue.

So why would beer brewed by Hawaii-based Kona Brewing Co. be more expensive in Hawaii than it is 5,000 miles away from KBC’s home brewery?

For one, the six-packs of Longboard that you’ll find in Hawaii supermarkets aren’t bottled or even brewed in Hawaii. Davis says bottled KBC beer is brewed in Portland, Oregon, and purchased by distributors who sell it to restaurants, grocers and liquor stores. “It’s shipped over in refrigerated containers,” he says.

So when you buy bottled KBC beer in the Islands, you’re helping to cover the cost of it getting to Hawaii in the first place. The cost of transportation across the Pacific Ocean is significantly more than the cost of transporting it by land around the mainland.

But there are plenty of other price-boosting factors that affect regional price differences.

Hawaii has some of the highest alcohol levies in the United States. Tax on a six-pack of beer is 52 cents in Hawaii compared with 8 cents in New York, according to the Tax Foundation. Taxes are so high — higher for bottled beer than draft beer — in part because of the challenge associated with trash disposal in Hawaii, where landfill space is limited.

Plus, Hawaii’s tourism-based economy means that the demand for alcohol is high, and alcohol taxes are an important source of revenue for the state. The people who live in Hawaii end up paying extra due to the state’s desire to milk thirsty tourists.

“Remember, this is a visitor industry so people are going to come while they’re on vacation and they’re going to drink,” says Davis. “Demand is very high. And every couple years we have a big argument over [the state] wanting to raise the taxes.”

All questions about taxes aside, would a six-pack of Longboard be cheaper if KBC brought its brewing and bottling operations home?

Maybe. But there are other costs to consider.

Davis says the logic for brewing bottled beer on the mainland became clear after KBC completed a sustainability study 15 years ago. The company concluded that brewing there made more sense for the company that prioritized a fresh product, minimizing its carbon footprint and being close to its consumers, which suggests less transportation costs.

KBC was one of the first bi-coastal breweries for this reason, Davis explains. The company’s beers are sold in 35 states and counting, with Portsmouth, New Hampshire, producing bottles for the East Coast while a brewery in the Pacific Northwest handles the western part of the country.

But even if Kona Brewing Company exported everything from the islands to the mainland, it wouldn’t change another fact: The vast majority of the ingredients in Kona beers come from outside of Hawaii. Malt is grown in the central northern United States and central southern Canada, hops spring from Yakima, Washington, and yeast and water from elsewhere on the mainland.

The only local ingredients — hibiscus, lilikoi, Kona coffee, toasted coconut, and lemon grass — are used in limited special batches.

KBC does have truly local beer that it brews in Hawaii, but it is only produced in draft form in locations like the flagship Big Island brewery or the Koko Marina brewery in Hawaii Kai. (Some of the beers that are sold on tap in Waikiki bars come from Big Island batches, but demand is so high that even much of the draft beer in Hawaii is produced on the mainland.)

Because Hawaii has an aluminum plant, Davis says KBC once considered canning beers locally before ultimately ruling out the idea.

“Does it make sense to ship all the raw materials to Hawaii, to then burn fossil fuels just to make the beer here?” Davis said. “And then, 90 percent of beer is water, so we would have been using all this water in a state in the middle of the ocean where water is a precious commodity and drought can get severe.”

He didn’t say it, but that water also has a cost here — and it is much higher than on the mainland.

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