Nice article on how AB InBev is trying to destroy good beer for higher profits

Yooper said:

I can answer that! I boycott all that I can. I boycott B/P, Wal-Mart, In-Bev, etc. [...] I think a person of strong convictions must stand by them.

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But that's the part that's confusing me. What "convictions" are you standing by here? How is this not simply economics/capitalism? A business survives by giving customers what they want, at a cheaper price than their competitors. If they cheap out too much and it becomes noticeable, then the customers switch to their competitors, and they either have to restore the quality, lower their price, or die.

This is all how things are SUPPOSED to work. What are you opposing here? That companies don't just blindly produce the highest-quality products, regardless of the price, and regardless of whether people actually like it or not?

I just don't get the argument here. This is how economics is SUPPOSED to work. It's simple supply and demand, and capitalism. Nothing is broken here!

kombat said:

[...]A business survives by giving customers what they want, at a cheaper price than their competitors. If they cheap out too much and it becomes noticeable, then the customers switch to their competitors, and they either have to restore the quality, lower their price, or die.

This is all how things are SUPPOSED to work. What are you opposing here? That companies don't just blindly produce the highest-quality products, regardless of the price, and regardless of whether people actually like it or not?

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At one level, "boycotting" in the way Yooper described is exactly what you say: the quality isn't adequate for her, so she doesn't buy it.

However, I don't agree that this is how things are "supposed" to work, at least, not always. The problem is that maximizing "shareholder value" (i.e., profit, more or less) doesn't solve every business problem. Many high-end brands, beer and otherwise, could probably increase profits by cutting quality and price. In some cases, this is silly and inefficient, but in others, it's a benefit to those who place a lot of value on high quality goods and services.

There are other issues, too, in that businesses don't exist in some magical economic world where the only thing that matters AT ALL is money. Businesses are made up of people, employ people, and serve people. These people have moral and ethical responsibilities, and it's not like that vanishes when you incorporate. If maximizing your profit means screwing over your community, I'd say that's not how things are "supposed" to work.

kombat said:

But that's the part that's confusing me. What "convictions" are you standing by here? How is this not simply economics/capitalism? A business survives by giving customers what they want, at a cheaper price than their competitors. If they cheap out too much and it becomes noticeable, then the customers switch to their competitors, and they either have to restore the quality, lower their price, or die.

This is all how things are SUPPOSED to work. What are you opposing here? That companies don't just blindly produce the highest-quality products, regardless of the price, and regardless of whether people actually like it or not?

I just don't get the argument here. This is how economics is SUPPOSED to work. It's simple supply and demand, and capitalism. Nothing is broken here!

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who says that's how economics works?

eastoak said:

who says that's how economics works?

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John Maynard Keynes.

kombat said:

John Maynard Keynes.

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Sounds more like Adam Smith than Keynes...

AZ_IPA said:

And it is working, with craft beer's market sharge surging and all.

Just admit it cheezy, you hate wealthy people.

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.......Bud made up a craft brewery somewhere in CA, Greensomething brewing with all organic ingredients. If you went there to visit the brewery there was nothing but a giant bud factory.

Deception, pure and simple regardless of socioeconomic status.

Homercidal said:

I'm not sure I've seen that one yet or not. I think I netflixed it once.

A craft brewery gets in trouble when they desire to expand beyond what they can manage. That often sets them up for loss of control or for a takeover. Sometimes the owner is just tired of working and want to sell.

A beer company just can't walk into a private company and buy them.

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See above. It was more of Bud pretending to be a craft brewery. also bud copying a style and then sueing the craft brewery that originally offered it. Another way for them to force a brewery to spend lots of money, even if the brewery ends up winning, they are financially worse off from having to hire attornies.

http://www.dogfish.com/forums/the-bar/7333/06/08/2009/dogfish-head-v-anheuser-busch.htm

Pretty effing sickening. Bud with their army of attornies who weren't that busy hamstringing an up and coming brewery.

They made it, but it is thill sh!tty.

kombat said:

John Maynard Keynes.

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well, that's not true he dealt more with deficits, employment, and other macro issues, but maybe you meant adam smith? in any event economic theory does not matter as much as economic practice does it? InBev can walk into any congressional office and probably get some action whereas you and i can't so what does economic theory do with that? isn't that the true "invisible hand" the hand that can pay? in very simple terms the market should favor the best (actor, whatever it may be) but in practice it tends to favor capital. your brewery is going to lose against InBev. period. the fact that your beer is better quality is irrelevant, so is the price. according to (some) economic theory this should not be the case, but it is.

eastoak said:

maybe you meant adam smith?

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They've both contributed greatly to economic theory, but I'll concede that crediting Smith would've been more appropriate to my argument.

eastoak said:

your brewery is going to lose against InBev. period. the fact that your beer is better quality is irrelevant, so is the price. according to (some) economic theory this should not be the case, but it is.

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Is that why there are more craft breweries in North America today than at any other time in history? Because small breweries inevitably lose against the big guys, "period?"

kombat said:

But that's the part that's confusing me. What "convictions" are you standing by here? How is this not simply economics/capitalism? A business survives by giving customers what they want, at a cheaper price than their competitors. If they cheap out too much and it becomes noticeable, then the customers switch to their competitors, and they either have to restore the quality, lower their price, or die.

This is all how things are SUPPOSED to work. What are you opposing here? That companies don't just blindly produce the highest-quality products, regardless of the price, and regardless of whether people actually like it or not?

I just don't get the argument here. This is how economics is SUPPOSED to work. It's simple supply and demand, and capitalism. Nothing is broken here!

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I won't get too involved with it here, but I boycott based on the way companies treat their workers, their impact on the environment, their unethical business practices, etc. It doesn't have anything to do with price. Sometime you should see "The High Cost of Low Price".

I don't care about product quality in off-brand stores, and that is not what why I refuse to shop at certain retailers. I also have no issues with capitalism. I will not shop with places that have a poor record of contaminating the environment, that force their workers to have substandard pay and working conditions, corporations that use deceptive business practices, etc. I do not eat meat from factory farms, eggs from factory farms, packaged food from conglomerates, etc.

InBev is just one of the companies I just to not support. I don't think everybody needs to do what I'm doing, as it's an individual choice. As an informed consumer, I have lots of choices.

kombat said:

But that's the part that's confusing me. What "convictions" are you standing by here? How is this not simply economics/capitalism? A business survives by giving customers what they want, at a cheaper price than their competitors. If they cheap out too much and it becomes noticeable, then the customers switch to their competitors, and they either have to restore the quality, lower their price, or die.

This is all how things are SUPPOSED to work. What are you opposing here? That companies don't just blindly produce the highest-quality products, regardless of the price, and regardless of whether people actually like it or not?

I just don't get the argument here. This is how economics is SUPPOSED to work. It's simple supply and demand, and capitalism. Nothing is broken here!

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To me it's boderline monopolistic behaviour. The company owns so many brands they don't care if you stop buying one product. They probably own the substitute brand that the consumer buys. Alot of the brands you think are "craft" are actually owned by BMC(AB Inbev inparticular). I realize it's not really a monoply (plenty of breweries out there) but they're actions are similar to the way a monoply would act

It is a lot more sinister than just capitalism.

http://www.dogfish.com/forums/the-bar/7333/06/08/2009/dogfish-head-v-anheuser-busch.htm

well crap. that link doesn't seem to work.

Basically Bud's fleet of attorneys sued Dogfishhead for their Punkin Ale, just to make them spend money, money bud had to burn and dogfish didn't.

cheezydemon3 said:

It is a lot more sinister than just capitalism.

http://www.dogfish.com/forums/the-bar/7333/06/08/2009/dogfish-head-v-anheuser-busch.htm

well crap. that link doesn't seem to work.

Basically Bud's fleet of attorneys sued Dogfishhead for their Punkin Ale, just to make them spend money, money bud had to burn and dogfish didn't.

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Can the the AB apologist please explain that one. Is it it just good ole capitalism when AB sues Dogfishhead because they use the words Punk'in Ale and Chickory Stout on their beers.

kombat said:

Is that why there are more craft breweries in North America today than at any other time in history? Because small breweries inevitably lose against the big guys, "period?"

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it does not mean that they prevent others from trying but big brewers have certainly bought up whatever craft breweries they can (goose island) and in some countries with even weaker laws than ours you will not open a competing brewery period.

my point is that we should not bow down to how things are "supposed to be" for it's own sake. we create the society we want to live in by the choices we make or don't make. capitalism is NOT sacrosanct, people are.

eastoak said:

it does not mean that they prevent others from trying but big brewers have certainly bought up whatever craft breweries they can (goose island) and in some countries with even weaker laws than ours you will not open a competing brewery period.

my point is that we should not bow down to how things are "supposed to be" for it's own sake. we create the society we want to live in by the choices we make or don't make. capitalism is NOT sacrosanct, people are.

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The other thing to consider is the "three tier distribution system" in the US.

I have a friend who owns a nanobrewery, and he can self distribute a limited amount. He can barely keep up with orders, so did consider a distributor.

He told me on Saturday that it's "pay to play"- that is, pay the distributor to carry his beer and offer to stores. He can't afford it, so he will continue to self distribute.

They recently changed the law in Wisconsin, but the way it generally works is that InBev can set up "brewery branches", so they can also monopolize the distributors.

So, smaller breweries, have to "pay to play" as well as find a non-owned InBev distributorship! Not easy, not fair, and legal in all but about 16 states. And not to take this political, which is against our forum rules, but I suggest looking up the top contributors to governor's and other elected official's campaign financing to figure out why it's not an issue in most states.

The pay to play in chicago goes further..you may have to gift an extra keg per month just to be considered for a takeover tap...if i remember, I'll post a link to a great article

Absolutely Yooper. Not to mention shelf placement.
The distributors get 90% of their revenue from BMC so that is who calls the shots.
BMC pays lobbyists to make sure that the 3 tier system stays, keeping them in control.

SABMiller just finished slamming the door shut in my state on any new brew pubs or breweries. Granted you can technically still open one but you would not be able to compete with the ones in place now.

They started to lobby against Inbev complaining that Inbev owned all the distributors in the state save the one they owned. They started to scream "monopoly!" and started to get a law through. This law, even though they claimed it it was geared to stop INbev from owning distributors, had NOTHING to do with Inbev at all! (I do not remember the exact number so do not hold me to the flame on it.) This law targeted breweries that made under 30,000 barrels of beer a year. It makes any new small breweries or brewpubs sell their product to a distributor then buy it back before they could even GIVE IT AWAY or sell it.

All the breweries/brew pubs that were in existence prior to this getting passed are exempt...

Zamial said:

SABMiller just finished slamming the door shut in my state on any new brew pubs or breweries. Granted you can technically still open one but you would not be able to compete with the ones in place now.

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I thought the number was 300,000 - and I thought it specifically allowed breweries under 300k the right to self-distribute....?

Yooper said:

The other thing to consider is the "three tier distribution system" in the US.

I have a friend who owns a nanobrewery, and he can self distribute a limited amount. He can barely keep up with orders, so did consider a distributor.

He told me on Saturday that it's "pay to play"- that is, pay the distributor to carry his beer and offer to stores. He can't afford it, so he will continue to self distribute.

They recently changed the law in Wisconsin, but the way it generally works is that InBev can set up "brewery branches", so they can also monopolize the distributors.

So, smaller breweries, have to "pay to play" as well as find a non-owned InBev distributorship! Not easy, not fair, and legal in all but about 16 states. And not to take this political, which is against our forum rules, but I suggest looking up the top contributors to governor's and other elected official's campaign financing to figure out why it's not an issue in most states.

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heferly said:

The pay to play in chicago goes further..you may have to gift an extra keg per month just to be considered for a takeover tap...if i remember, I'll post a link to a great article

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That is the kind of crap I most dislike about the big boys. I feel states should make it easier for small breweries to start production. Then once they start expanding beyond the local markets, up the cost proportionally to start distribution beyond the state.

There are likely many people who want to start small local breweries who would make great employers. Who doesn't want more businesses going up in their state? The smaller breweries wouldn't be a threat to the larger breweries, and when they do get big enough, they would face the same requirements the big breweries already face. Seems fair.

I'd like to see the 3-tier system studied and some alternative methods proposed. If only the lobbying wasn't a problem...

Homercidal said:

That is the kind of crap I most dislike about the big boys. I feel states should make it easier for small breweries to start production. Then once they start expanding beyond the local markets, up the cost proportionally to start distribution beyond the state.

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+1 for deregulation!

TyTanium said:

+1 for deregulation!

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!!!!!

This was the article i read awhile back, but gives a nice story about the distributors in chicago

http://www.chicagobusiness.com/article/20101120/ISSUE01/311209986?template=mobile

Hooray for Chicago. I need to find a different big city to frequent...