Mainstream Media is a Joke

Yesterday, while relaxing at the Tampa Bay Brewing Company with KC, I was interviewed by Mario Diaz from Tampa Bay 10 News. The basis of the interview seemed to be focused on gathering public opinion of the impact on an increase in the cost to produce beer vs. what we are already paying in inflated fuel prices.

Mr. Diaz presented me with the question, “what would you rather see, an increase in the price of gas or beer?” Naturally my first instinct was to say that I wouldn’t like to see an increase in the price of either. Being a good sport, I played along and stated that I would prefer an increase in gas prices over beer prices. Unfortunately, that was the only part of my interview with Mario that wasn’t cut from the segment.

I went on to clarify my response with an explanation of the economics behind how prices of high margin, high volume consumables, such as gasoline and alcohol are set. Apparently Mario wasn’t interested in sharing with his viewers the fact that price rarely has anything to do with production costs, but has everything to do with demand and market tolerance for substitute products (if any exist) and competition in the same product category. I clarified my explanation with an example pulled from the beer industry.

In explaining to Mr. Diaz that if the cost to produce Anheuser Busch’s most popular economy brand (Bud Light) goes up, it doesn’t necessarily mean that the price of that product is going to increase because if it did, then consumers would simply purchase a different economy brand, such as Miller Lite or Coors Light instead and that a premium domestic 6-pack will continue to cost consumers around $7 while standard domestic lagers such as Coors, Coors Light, Budweiser, Bud Light, Miller High Life and Miller Lite will continue to be priced under $5, as they have been for years…because this is what consumers expect to pay.

Gasoline is different, because there are considerably fewer alternatives to choose from, unless you consider octane ratings (regular/ mid-grade / premium) or diesel fuel as legitimate alternatives. As a commodity product, it is assumed that you are going to get the same thing whether you purchase it from an Exxon station or a Citgo station. Or at least it will deliver the same results regardless of where you purchased it from.

Mario was apparently more interested in delivering a story based on sensationalism and the fear that a $5 micro-brew draft will suddenly get more expensive because the price of hops has gone up than the fact that what we pay is determined by who is selling it and what they feel their customers will tolerate paying for it…not what it costs them to make it. This is what drove me to concluding that the news we are fed by mainstream media is garbage.

The good news is that with thousands of niche bloggers online and sites like LiveLeak out here, we are not limited in options for getting the straight story, whatever that might be. It will be interesting to see how long it takes for network news producers to figure this out.