Pasteur effect

The Pasteur effect is an inhibiting effect of oxygen on the fermentation process.

Discovery
The effect was discovered in 1857 by Louis Pasteur, who showed that aerating yeasted broth causes yeast cell growth to increase, while conversely, fermentation rate decreases.

Explanation
The effect can be easily explained, as the yeast being facultative anaerobes can produce energy using two different metabolic tracts. While the oxygen concentration is low, the product of glycolysis (pyruvate) is turned into ethanol and carbon dioxide, and the energy production efficiency is low (2 moles of ATP per mole of glucose). If the oxygen concentration grows, pyruvate is converted to acetyl CoA that can be used in the Krebs Cycle, which increases the efficiency to 38 moles of ATP per 1 moles of glucose.

Under anaerobic conditions, the rate of glucose metabolism is faster, but the amount of ATP produced (as already mentioned) is smaller. When exposed to aerobic conditions, the rate of glycolysis slows, because the increase in ATP production acts as an allosteric inhibitor for the pathway.

So, it is advantageous for yeast to undergo the Krebs Cycle in the presence of oxygen, as more ATP is produced with less glucose.

Practical implications
All the processes used in alcohol production are kept in anaerobic conditions, while breeding yeast for biomass is done in aerobic conditions, the broth being aerated.