In Holland as well as in England beer faced challenges from alternative drinks. Originally only used for medicinal purposes, coffee, tea, and chocolate increased in popularity as prices fell through the eighteenth century. The East India Companies of both countries saw imports of tea as well as coffee rise dramatically. At some time around the middle of the eighteenth century, supplies from Asia and, for coffee, supplies from the Americas meant that once-exotic drinks became items of mass consumption, drawing people away from beer.⁹ A more consistent and serious threat was other drinks with alcohol. Wine and brandy remained expensive and so were competition for beer only among those with higher incomes. Not necessarily candidates to drink brandy, Netherlands labourers in the fifteenth century spent 15 percent of their income on drink, and beer was the favoured choice. In the eighteenth century the share was only 5 percent, a sign of changing tastes and consumption patterns in general.¹⁰ It was gin that was the first and most important challenger for brewers. With as much as ten times the alcohol content, it was easier to store and transport than beer, and it did not turn sour after about six months which beer could do. The correlation between the excise revenue from beer sales and the value of gin sales from 1650 to 1800 was -0,76, strongly suggesting drinkers made a switch from one to the other.¹¹ Brewers also saw the prices of inputs, especially grain, go up in the eighteenth century. Often located in towns in order to be close to customers, brewers found land costs tending to go up. Along with all those other problems brewers paid taxes on their inputs, such as malt, and on the beer when it left the brewery. On top of all those burdens, towns levied excises on sales in pubs.

The fall in beer consumption had an obvious and considerable negative impact on the finances of the United Netherlands. Holland, the most populous and prosperous province of the union, was the principal source of revenue for the Dutch Republic. Since such a large proportion of tax receipts came from Holland, and since Holland carried so much of the country’s debt, the financial records from that county can serve as a reasonable proxy for the entire country. With beer taxes, the income for that source was so much higher in Holland that it swamped the meagre returns to governments in the other six provinces.¹² The population of Holland was greater than the others, which helped to explain its dominance in fiscal matters, though it had higher revenues per person from taxes on beer. In around 1650 on average Hollanders paid about five times as much as people in Zeeland or Groningen. By around 1750 the rate had fallen sharply in Holland, so it was only twice the also lower level in Zeeland.¹³

The rates of tax on beer tended to rise over time, though; from the 1650s on there was greater stability with no change from 1671 to 1749. Increases in the second half of the eighteenth century came on what was a declining volume of sales, and so the fall in tax income after 1754 understates the fall in production.¹⁴ There were special rates of taxation for foreign beers and certain specialty beers of very high quality. The lowest quality of beer was sold tax free. There are no records of the mix of production or consumption, making the tax receipts even harder to interpret. From the beginning the provincial tax in Holland was, as with civic taxes, farmed out, so the government records report what the successful bidders at the thrice-yearly auctions agreed to pay for the right to collect the tax. With any tax records there are problems with reliability because of evasion, the degree and sources being all but impossible to quantify. In the Dutch Republic methods of administration minimized avoidance of payment. The tax receipts of Holland do not show the exact level of beer production or consumption because of the various taxes that fell on beer and the different types drunk, as well as the changing rates. There is, however, every reason to believe that they do reflect the general trends in and state of the Dutch industry, and they certainly give a direct indication of the fiscal problem the government faced.¹⁵

Despite some signs of relative success in port towns, the decline in government income from beer taxes generally occurred throughout the province. In most of the towns for which data are available in absolute numbers, the decline was small. Amsterdam was the exception. The proportion of payments among ten towns did not change much over the entire period. The Amsterdam share rose from about 1660 to the 1730s and only fell below a third in the last days of the eighteenth century. A slightly higher level of payments in Dordrecht and Rotterdam helped to lower the share of Amsterdam after mid-century. Even so, considerable alcohol consumption continued in Amsterdam. In 1613 the city had 518 alehouses or one for every 200 inhabitants. Though the total number went down over time, there was still a pub for every 234 inhabitants in 1800. England was not far behind with, in 1631, about one drinking establishment for every 187 people. At the same rate, Holland would have had over 10.500 public bars.¹⁶

In Holland average revenue from beer excises fell, in current (nonbank) guilders, from 2.105.997 in the 1650s to 454.256 in the 1780s, 22 percent of what it was in the earlier years. That meant that the province got on average 17 percent of its total revenue from beer taxes in the 1650s, while in the 1780s the share was down to just 2 percent. The shrinking proportion was a result of the dramatic drop in beer tax returns but also of the rise in total Holland tax revenue, with the average, in current guilders, rising 2,6 times over the same period. From 1620 to 1665 there was, if anything, a small decline in GDP and then some slow recovery, of about 0,04 percent per year on average to 1805. Per person incomes were all but stagnant from the mid-sixteenth century through to the end of the eighteenth.¹⁷ In those years while growth sharply slackened government expenditures rose. The Republic was left to shoulder a considerable debt throughout the eighteenth century with little if any increase in the tax base.

The decline in the share of Holland’s total revenue from taxing beer fluctuated wildly from 1650 to the 1690s, more reflecting changes in total tax revenues brought on by the need to fight wars than by changes in beer sales. Through the eighteenth century the downward trend in the share was more consistent. The anomalous temporary sharp drop at mid-century resulted from a temporary change in the tax rate. Holland brewers, facing a considerable increase in 1749, argued that the higher levy would destroy them. In 1751 the government agreed to a reduction of approximately 50 percent. Revenue fell as much as the tax. Beer consumption levels were not sensitive to price or at least to levels of taxation, not unexpected for a good of low price elasticity. Just three years later the government restored the tax to its earlier level. As a share of just excise tax income, the decline in the contribution from beer was more linear, with the pace of the fall slackening in the 1690s but then sustained at around the same rate through the following century. There was a drop from the failed experiment with lowering the beer tax in 1751, but the trend was quickly restored.¹⁸

While the contribution of the beer excise to total tax receipts declined, the gross income of the province of Holland rose. Over the long term, then, other sources of revenue must have increased.¹⁹ Higher income from excise taxes on grain, peat, and coal, as well as on coffee and tea, compensated in large part for the shortfall in beer tax revenue. Sharp jumps in tax income from both grain and peat with coal in 1680 and 1674, respectively, and with grain again in 1750, increases which were sustained, made a considerable contribution to filling the gap. The tax on coffee, tea, and chocolate showed long-term growth from its inception but remained at a low level. It made a contribution, though not on the order of the growth from the other two taxes. The sum of taxes on brandy, coal with peat, and coffee with tea rose steadily through the period, even while the income from the beer tax was dropping consistently. The total income from taxes on the drinks, coal with peat, and milled grain taken together was higher in the 1780s and 1790s than it had been, in current guilders, in the 1650s and 1660s.

The rise in revenues from taxes on the other drinks combined with that on heating fuel compensated for something around 60 percent of the fall in beer tax revenue. Surprisingly it was not the rising receipts from the grain tax that filled the gap left by less beer-paying tax. It was a tax on horned beasts with cultivated land that supplied much of the remaining 40 percent of the difference.²⁰ The trend also suggests an increase in meat consumption.

In the years from 1650 to 1800 sharp increases in tax rates were rare. There were considerable rises in excise tax income in different categories that cannot be explained by changes in levies. That is the case with some dramatic fluctuations in the income from the tax on brandy. From 1750 on there was a sharp rise in the income from the tax on distilled products, as well as some significant swings in the seventeenth century, but there are no viable explanations for the changes.²¹

Starting in the middle the eighteenth century, the rise in the tax on distilled spirits accounts for a considerable part of the compensation for the fall in returns from beer. That was, however, not the only way that the tax system captured the shift away from beer to gin.²² Distillers had to use more grain for each litre of gin they made, relative to the amount brewers used for a litre of beer. They needed greater quantities of vegetable matter that yeasts could ferment and so create more alcohol for each litre of their drink. Even though distillers made fewer litres of genever, still a portion of the increase in government returns from taxes on grain is attributable to distillers’ purchases. Those same distillers needed to boil the alcohol-rich combination they made in order to separate out the strong liquor. After the increase in tax rates on peat with coal in 1674 and in 1679, the charges were stable but receipts continued to go up. More people burned more coal. Dutch brewers did shift over time to coal, even if early on they were not eager to do so. They did not like the potential for coal fumes to adulterate their beer but they did need a convenient form of thermal energy, especially when peat supplies were interrupted.²³ Distillers showed no reluctance to shift to coal. The imported fuel was always acceptable to them. If brewers made less beer, they used less fuel, and yet the returns to the state from the fuel tax stayed the same or rose, so other consumers, including distillers, made up for the decline in beer-making.

The government shifted the items taxed, adding levies on land and wealth to those on sales and production. The tax base was stagnant after about 1675, so excise taxes, on which the Republic had relied heavily from its foundation, were not going to yield much more.²⁴ In addition, the Netherlands went through a period of de-industrialization in the eighteenth century. Brewing was only one example of the trend. Other European regions closed the technological gap with the Dutch Republic while cost structures shifted, so export markets for Dutch goods were less lucrative. Wealth accumulated in Holland through the seventeenth century boom went to better-paying investments in government debt rather than to industry. Under those circumstances, faced with the high cost of wars and the large debts incurred fighting those wars, the government logically and necessarily altered the targets of taxes.²⁵ Whereas direct levies on land and houses contributed 31 percent to total state income in 1600, by 1790 that figure was 44 percent. Customs and excise taxes then fell from a 61 percent share in 1600, to 57 per cent in the years from 1661 to 1667, and then down to 43 percent by 1790. Among the excise taxes there was a shift away from necessities like grain, beer, and salt, which in 1700 had accounted for 83 percent of revenue from all such levies. By 1790 taxes on luxuries such as wine, brandy, tobacco, and coaches had risen enough that the share of excise payments coming from levies on necessities was down to 66 percent. The tax burden per person rose about 40 percent from the 1670s to the 1790s, with a shift from regressive excise taxes to more progressive wealth taxes, a process that began in the 1680s.²⁶

It was not just the fall in beer production which led to the shift in the sources of taxes in the eighteenth-century Netherlands. To ensure state finances remained sound, the government reacted to changes in consumption patterns and in the distribution of wealth. The disappearance of beer did influence the change, but it was one reason among others for adjustments. A much greater force in the fiscal history of the Dutch Republic was the massive debt incurred from fighting wars. Debt interest payments consumed large quantities of tax revenue in Holland.²⁷ The tax burden per person was higher in the eighteenth than in the seventeenth century. The shift in the structure of taxation addressed to some degree the changes in the character of the economy as a whole and the changes in the potential sources of state income.

The revenues of most European states grew sharply in the seventeenth and eighteenth centuries. The most striking rises were in the Dutch Republic and England. In the latter, revenue increases came from population growth, increases in prices, rising real GDP per person, and the ability of the government to impose taxes on production and sale of goods in a consistent and effective way. The Netherlands was especially good at extracting a rising share of personal income, something that Britain made formidable advances in imitating over time.²⁸ Total English tax income and that of Holland were similar through much of the second half of the seventeenth century. It was in the years of the War of the Spanish Succession when England began to move ahead and at an increasing pace after the 1760s. In the 1670s English government income was 2.7 times that of the 1620s, by the 1720s eight times, and in the 1770s eleven times.

Overall economic growth contributed to the increase, but more important was the rising share of GDP appropriated by the English state, which climbed from between three and 4 percent in 1688 to 9 percent as early as 1715. A quadrupling of import duties in those years, a doubling of the beer excise in 1695, and a duty on imported malt all contributed significantly to the sharp rise in revenues.²⁹ The wars King William III waged against Louis XIV’s France after 1688 were expensive, and the government found in excise taxes and import duties the sources of income to finance the military effort. By the late eighteenth century, 80 percent of government revenue came from indirect taxes, part of a long-term trend as expenditure grew. Yet the government, despite repeated efforts, could not find a way to tax income and wealth in any uniform way. There was nothing like the shift toward wealth taxes that occurred in the contemporaneous Netherlands.³⁰ In England opposition from the landed interest, heavily represented in Parliament, made the turn to levies on wealth halting and inconsistent. From 1788 to 1792 revenue from assessed taxes and land taxes produced only 22 percent of all revenue, while the contribution from articles of general consumption, including beer, was 45 percent. The trend toward reliance on excise and away from import duties was accelerated by the policy of the Pitt government in the 1780s, the excise being easier to collect.³¹ That meant taxes fell more on necessities, items of regular consumption, and that meant beer.

Following beer production in seventeenth- and eighteenth-century England is difficult because of the late start of surviving records. The complex combination of rates, along with the poor quality of administration of the beer excise in the years after 1688, followed by effective reform in the first two decades of the eighteenth century, created considerable volatility in returns before about 1715.³² In addition, changes in tax rates of the early 1780s make the figures after that date not truly comparable to the years from 1684 to 1784.

In England beer tax revenues fell as a share of excise tax revenue and of total tax revenue from the last decade of the seventeenth century. Those levels were always higher than Dutch ones but showed the same tendency to fall behind in shouldering their share of expenditures. In the Dutch case it was much more the decline in beer output that caused the decline, while in England it was the failure of beer tax revenues to keep pace with the growth in the scale of state tax collection.

In 1695, when the system of excise taxes was just taking shape, beer was about the only good that produced excise returns for the Exchequer. Over time an expanding array of levies on other industrial products joined beer taxes. By 1712 those other goods were producing enough that the share of revenue from beer taxes was under half the total. By the 1790s it was a quarter. The fall was sustained but still nothing on the order of the precipitous Dutch fall in the same period from one eighth to one thirty-third.

For total tax income the share from beer in England varied from a fifth to a sixth through the first half of the eighteenth century. In the 1750s the trend turned downward. One reason was pressure from gin sales. Until the 1740s rates of excise on beer and gin tended to move together. Even with that government action, Londoners were drinking some 4,7 times as much gin in 1750 as in 1700. The growth in England overall was even greater: 4,9 times. Absolute levels of beer consumption of the 1720s only recovered after 1758, the more than 30-year dip coinciding with the greatest enthusiasm for drinking gin. Recovery also coincided with greater government restrictions on producing and selling spirits in the 1750s.³³ Even with the attack from spirits, beer excises still contributed an eighth of all revenues at the beginning of the wars against Revolutionary France, a time when total expenditure was rising sharply.

Taxation meant regulation to assure the government received all the tax revenue it was due. Holland brewers faced more stringent government control than did those in England. Civic institutions in the Netherlands long enforced rules on what brewers could do when and with what equipment and at what scale and with what grains and how frequently, among other things. Starting in the second half of the thirteenth century, England did regulate brewing. The Assize of Bread and Ale of 1267 set standards for the kingdom with fines, imposed and collected locally, for violations of the rules. Though not a direct tax on beer sales, the frequency with which village residents, overwhelmingly women, were cited for violations made it function like a levy on brewing even though the charges lacked consistency. In the seventeenth century, surveillance of brewing increased.³⁴ In 1637 the king required all sellers of beer in alehouses and taverns to buy what they sold from common brewers. That was so the crown could monitor and, therefore, tax beer more easily. It was the start of a system of national regulation of the trade and, with it, closer oversight from state tax assessors. In 1653 the government shifted from taxing consumption to production, making the levy less obvious to the drinker while reducing evasion.

From the late seventeenth century brewing stagnated or declined in much of England, but some London brewers thrived, especially those well capitalized. They took over an increasing share of a local market that was growing with the rising population of the capital. By the 1750s London brewers produced about one fourth of all strong beer made in England and Wales, and people in the metropolis may have been downing over 2,5 times as much as other Englanders.³⁵ The relative centralization of beer production in large London breweries made monitoring the industry, and collection of taxes due, easier.³⁶ Even so, it is doubtful that the surveillance of English excise tax officers ever equalled that of tax farmers and the local receivers of revenues due in Holland. While there had long been breweries in many Dutch towns and villages, over the course of the eighteenth century their number declined, and the tendency toward concentration made it even easier to know who owed what and to be sure they paid the sums owed. Evasion of import duties posed problems for the English government in the eighteenth century. Evasion of excise did as well, though the volume of the product and the scale of operations made it easier to keep track of beer output. The constant monitoring of brewing in both England and in Holland, then, at least indicates that enforcement was consistent and that tax records are reliable indicators of how the two industries fared.

Government policies in both England and Holland had only limited effects on the performance of brewing. Shifting tastes and competing drinks along with rising costs were problems that had a much greater impact than taxation rates. The failed experiment in Holland from 1751 to 1754 proved that lowering the rates of beer tax, and so lowering the price of the drink to the consumer, did not increase consumption. Government fiscal ambitions reached into almost all parts of the economy, and still some sectors thrived and few met the fate of brewing. Comparison of the patterns of change in the tax receipts does throw light on the larger questions of developments in the two economies. It makes clear that the decline in beer consumption in Holland is not the explanation for the political and military and naval problems of the Dutch Republic in the eighteenth century, nor does the endurance of beer consumption absolutely, though not per person, explain the political and military success of England.

The reactions of the two governments to what happened to beer excise tax revenue was different. In the Netherlands the state more or less kept the tax burden on beer per barrel about the same and sought differing ways to tax the brewing industry, while raising taxes on other drinks and turning increasingly to taxes on wealth, both financial and landed. In Holland from 1572 to 1713 real tax revenues increased about eighteen times, while national income increased some eleven times. The share of income captured by the state increased. In England in the much shorter period from 1688 to 1715 revenues increased about fifteen times, and national income increased some five times.³⁷ For England the years were ones of sudden rapid growth in military expenditure, and yet it was the Netherlands over the longer period that had similar success in expanding the contributions the population made to state activity. Through the eighteenth century, England would follow the pattern established in the Dutch Republic. If, indeed, from 1670 to 1810 English national income tripled, while state tax income rose more than sixteen times, obviously the government there learned well from the Dutch example.³⁸ What it did not do was spread the burden more broadly. England found more room to push up taxes on consumers, at least domestically. In some colonies in North America, on the other hand, efforts at the same time to increase tax revenues to finance wars ultimately led to a successful revolution.

Flexibility was critical to success among states financing greater military and naval efforts in the eighteenth century.³⁹ The decline in the brewing industry curtailed flexibility in the Netherlands. Shrinking beer production was only one part of the fiscal adversity of the Dutch Republic. The stability of beer production was only one part of fiscal good fortune in England. The difference in the patterns in the two makes clear that larger issues of the general development in the economy, in trade and diversification of industry, and in population growth had more prominence in the state of government finances than beer production. The fiscal-military state went and got tax income wherever it could within existing political and economic constraints. The main difference between various states in terms of access to public credit resided in the uneven possibilities they had of accompanying public debt with an expansion of the tax base.⁴⁰

Because of long-standing reliance on beer taxes, the pattern of consumption of the drink was important to the fiscal condition of the governments of the United Netherlands and the United Kingdom. By the 1680s both relied heavily on the excises on beer, but first Holland and then England found the importance of those revenues declined. There were two reasons. Beer consumption fell per person. In England the decline was less dramatic than in Holland where competition from domestically produced and imported exotic drinks took a greater toll. The other was that success with taxing the commonly consumed beverage inspired both governments to extend the scope of excise taxes to other goods. Goods in common use, necessary consumption goods, were the logical and most lucrative targets. Both jurisdictions found ways to tax the drinks competing with beer so that alcohol consumption continued to make a significant contribution to fiscal health. In England the government over time moved toward increasing excises, even shifting from tariffs by the late eighteenth century to concentrate on retail purchases of common commodities. Because population and incomes were growing there, tax receipts rose continually and at an increasing pace. Holland did not enjoy either of those advantages.

Constrained by the cost of servicing the considerable debt built up in the wars of the seventeenth and first years of the eighteenth century, the Dutch Republic was left with two options. First, the state shifted more of the tax burden to the wealthy. Total government income stayed much the same because the authorities moved more of the burden of taxation to other consumption goods and to levies on wealth. Second, they reduced expenditure. The latter forced a withdrawal from international conflicts, opening the door for England to take over a leading political role thanks to the success of the British Army and the Royal Navy.

In the competition among western European states, the Netherlands fell behind in raising state income almost precisely at the time brewing declined. The temptation is to overstate the connection between the two trends. The extent of the fall in the returns from beer taxes, as a share of the total taken in both, did not lead directly to relative performance on the international stage. The contraction of the brewing industry belonged to the history of the changing character of the Dutch economy in the eighteenth century, of the shift from industry to services, while maintaining high income per person. The shift in taxing patterns in Holland, however, was a reaction to the general changes in the economy, ones spurred along first and most dramatically by the failure of beer to retain its place on the tables of Dutch households. For England there was not the pressure that existed for the Exchequer that plagued the finances of Holland. At the same time the shift away from taxing beer to levying excises more broadly was successful because of the general state of the English economy. Innovation and concentration of industry in London, where brewers reaped scale economies, made it possible for English tax collectors to keep on earning substantial rewards from beer excises. The role of beer in the finances of the two maritime states was just one factor in the general changes in population, production, international trade, and the structure of the economies.