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It's a Conspiracy? Wait. . .

It's a Conspiracy? Wait. . .

by Ed Morris

6 months ago


By Templar Guest Blogger Mike Malsed

 

 

Every time that ABI buys up another craft brewery, the craft community gets up in arms, and in response, a number of people make mockery saying that it's not a conspiracy. Let's examine this.

A conspiracy is defined as "a secret plan by a group to do something unlawful or harmful." (Mirriam Webster) So we're looking at a: a plan, b: a secret plan, c: by a group, and d: to do something unlawful or harmful.

I love it when a plan . . . Yes, a plan. Anheuser-Bucsch-Inbev has a plan. We've heard from former insiders, like Mitch Steele and the former brewer of Elysium, that there is a plan. While it may not be an elaborate James Bond arch-villain style master plan, it is a concerted effort to hit independent breweries on multiple fronts.

Here's a few initial facts: craft offerings are in demand. There should be no argument here. ABI's problem is that they don't have a whole lot of fairly legitimate craft offerings to fill that demand. They need those products to fill tap handles and shelf space that consumers and retailers are asking for. So they buy craft breweries to get those products. If this were as far as it went, it would not be much a plan nor would it be a big deal. . .

But how to get their products on those shelves and on those tap handles? Here's where it gets to be a plan, and a predatory one. ABI can afford to price things low on a small percentage of their lineup in order to leverage that space. Goose Island IPA used to cost what a typical IPA did - in the $10/4pack range. Now you can find it at half that, without trouble. BCBS used to cost a significant premium, due to its rarity and limited production. Now? You can find it for $10 a bottle, and it's no longer rare. ABI is producing much of Goose Islands' products at their large factory breweries at a much lower cost point (Source), and to many tastes, at a lower quality level. By doing this, ABI undercuts the craft breweries that cannot produce beer for that price at all.

To enforce this, they are working on a concerted effort lobbying for enforcement of restrictive laws that hurt small beer business (example from Texas: http://jesterkingbrewery.com/the-greatest-gathering-of-artisan-brewers-in-the-history-of-the-universe-and-why-it-could-never-happen-in-texas, description of and issues with the three-tier system: http://www.fermentarium.com/industry/how-the-three-tiered-beer-distribution-system-works/) all the while violating existing liquor laws themselves. They work to enforce the three-tier distribution system, which keeps them in control of two legs of that system, as producers and distributors. They routinely violate pay-for-play laws that are intended to keep retailers and distributors independent from producers (Source).

ABI also, as the owner of a significant percentage of distributors, provides massive discounts (up to 75%)  to those who carry 98% of their inventory as ABI products (Source).  This is under governmental review as being anti-competitive (no, really?) but it just shows the planning on ABI's part.

These are some of the  pieces of the plan.

"Three may keep a secret, if two of them are dead." (Ben Franklin) Is it secret? Well, they certainly are not advertising it, are they? In fact, they're advertising exactly the opposite! I've written about their advertisement portraying Adolphus Busch as an idealistic beer-brewing immigrant who slogged through the mud clutching his precious beer recipe - and that it was NOT Busch's story (he couldn't even brew!) but was Frederick Miller's story (yes, Miller - https://thepintstemplars.com/blogs/news/beer-fact-or-bullsh-t-did-budweiser-steal-millers-story.)

In fact their efforts to portray themselves as "craft" go even further. They have a "craft" style blog, TheBeerNecessities.com, which does what one would expect, they publish craft beer related stories but with a very big-beer-friendly twist. They profile breweries, oftentimes friendly, but oftentimes fairly nasty. They have a "craft" oriented TV show that has, as their host, a notoriously anti-craft formerly-craft early ABI acquisition from Golden Road Brewing, Meg Gill and "Beerland." A contest show that lets homebrewers compete for the chance to brew at Golden Road (i.e. ABI). https://www.brewbound.com/news/golden-road-co-founder-star-new-viceland-series These efforts are part of ABI's efforts to make the craft community look petulant and themselves look like rescuers and saints. http://thefullpint.com/dans-blog/ab-inbev-dont-like-us-tour-continues/

It's pretty obvious that ABI is a group, so no discussion needed there.

"Overnight stardom can be harmful to your mental health." (Clint Eastwood) But is it harmful? Well, to me that's hard to argue. It absolutely harms small businesses. In my opinion it harms the consumer as quality declines. It takes available tap handles and shelf space away from artisanal breweries that just cannot compete at that level, and puts a hard ceiling on how much new breweries can grow.

Conspiracies EVERYWHERE!!! Is it a conspiracy? Yes, absolutely. Anheuser-Busch-Inbev is involved in a plan, secret or no, to do something both unlawful and harmful, not to mention unethical. Is it some dark and sinister convoluted JFK assassination plot with silver bullets (pun intended)? Perhaps not - but it is a conspiracy nonetheless.

 * The opinions in this post are of the Blogger in the byline and is not necessarily the official standing/opinion of The Pints Templars.

 

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