Why AB InBev and the others suck

http://online.wsj.com/article/SB10001424052702304177104577309631081128556.html?mod=e2tw

Short article everyone should read. Basically because they have been losing market share and Budweiser shipments have been falling for 23 years (23!) they are introducing a whole crap load (and really, its crap. Bud Light Lime-a-rita? barf) and squandering the market so local and craft breweries cant sell their product.

"...Anheuser also told more than 500 wholesalers who distribute its products across the U.S. that it wants them to sell fewer rival brews. The company warned that wholesalers who aren't tightly "aligned'' with Anheuser might be prevented from acquiring other wholesalers through equity agreements, a type of business contract, that Anheuser holds with the wholesalers."

Basically if you sell competing brews (which is everyone else right?) then you arent allowed to have our product.

Ridiculous if you ask me.

Meh, strongarm business practices, but that's how it's done in the big leagues. I doubt that it will stop anyone from getting the beer they want.

What that ends up doing is sending me to other stores to buy beer. I've noticed that some grocery stores around me (notably Stater Bros) have an abysmal selection of non-BMC beer, while others (like Vons) have an amazing selection of craft brews. This means that I go where the selection is the best to buy beer. AB strong-arming businesses into only carrying their products is not going to result in me buying their products, it will only send me elsewhere.

"Cut costs, produce high volumes, plaster the brand everywhere and sell it cheap."

This should be a business plan for pens, lighters and batteries, not beer.

Craft beer has gotten big enough that I dont think BMC can do squat about it. All the grocery stores in my are carry a good to great selection of craft beer and 2 large liquor stores have more craft beer on display than BMC.

Maybe I am confusing wholesaling vs distributors. But don't a lot of craft brewers get their beer to market via InBev/AB distributors? If so then wholesalers could still carry many different beers under InBev/AB umbrella?

Let 'em try. Consumers will speak. +1 for free markets.

arturo7 said:

"Cut costs, produce high volumes, plaster the brand everywhere and sell it cheap."

This should be a business plan for pens, lighters and batteries, not beer.

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There are pen and lighter aficianados who would disagree. I do not know any battery aficianados, tho.

The reality is that there's plenty of room in the world for cheap, high volume beer AND craft beer.

The problem is it isn't a free market.

The 3-tier system (left over from post-Prohibition days) dictates that breweries can ONLY sell to distributors/wholesalers NOT to consumers directly. And there are a fixed number of wholesalers per geographical territory. If a craft brewer can't convince a wholesaler to carry their beer, they can't sell it. Period.

InBev/Miller/Coors puts a lot of pressure on wholesalers to only carry their products, which puts craft breweries at an unfair disadvantage.

Yea I'm still going to buy the beer I want.....I live in palm beach county and the grocery stores here have a pretty decent craft selection, though not to the extent of total wine, but still good enough. Heck even has station here are carrying craft selections.

One of the things I love about Alberta, privatized liquor laws. Microbrewers can deliver beer directly to the retailer without a middleman controlling the flow. It's sad that craft brewing isn't way bigger in this province.

William_Stout said:

One of the things I love about Alberta, privatized liquor laws. Microbrewers can deliver beer directly to the retailer without a middleman controlling the flow. It's sad that craft brewing isn't way bigger in this province.

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what's a 6er of craft go for in Alberta?

anywhere from 11 to 14 cdn, all of our booze is pretty expensive even compared to other provinces, lots of taxes.

BMC is roughly the same price, unless on sale.

Hopefully this backfires on inbev and speeds up the death of the three tier system.

Caucasian said:

Hopefully this backfires on inbev and speeds up the death of the three tier system.

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Thats what I was thinking.

I would assume the Brewers Association would use this type of information to continue lobbying efforts - not to eliminate the three tier system, but to put production limits on it. Of course since their biggest lobbyist is Boston Beer Company, that limit will be 5 Million BBLs or more needs to use the three tier, and less then that can self distribute. As the Craft Beer Industry gains lobbying power, things will change.

Also - some states allow Craft Breweries to self distribute. Massachusetts is one of those states (probably thanks to BBC, not sure though). But to get the beer to other states you need a distributor.

What this does, is open up business opportunies to found a Distribution Company, to carry only craft beer. Atlantic Imports is our local example. DFH is their big brand, but they carry probably the best craft selection around here, and make sure those beers find their ways to tap handles and liquor stores.

bk0 said:

The problem is it isn't a free market.

The 3-tier system (left over from post-Prohibition days) dictates that breweries can ONLY sell to distributors/wholesalers NOT to consumers directly.

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Wow, I didn't realize that was a law...just thought breweries used distributors out of convenience. Well, then +1 for deregulation.

Miller distributors are not as bad as AB/Inbev. Small breweries can self distribute in most states. So if it sells it will get to market.

I guess AB wasn't paying attention when Microsoft told retailers that they couldn't offer competitors products...

That article just reads as AB is getting desperate. 19 new products in one year? That's a last ditch effort to regain ground in the beer market if I've ever seen one.

In response to this and now knowing that Stella, Shock top and Goose Island Brews are owned by AB...don't buy the product. It's a simple solution. Negate their attempt at raising their bottom line by leaving it all in their warehouses...

passedpawn said:

I doubt that it will stop anyone from getting the beer they want.

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ktblunden said:

What that ends up doing is sending me to other stores to buy beer.

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Part of the plan, though, is to prevent people from knowing there's a choice. These marketing decisions may not affect those of us already tuned in to the craft beer world but they make it more difficult for new people to discover it.

TyTanium said:

Well, then +1 for deregulation.

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This has worked so well in so many other instances, right? :cross:

I make a point to not buy any brands owned or imported my InBev. While this may limit my choices some, it will be a loooooong time before I run out of other beers to try.

Meh. I'm indifferent. If it's offered, I'll drink it.

Edit: It's good to hear AB is offering a wheat IPA. I enjoyed their bud american ale.

Pearlsnappro said:

Miller distributors are not as bad as AB/Inbev. Small breweries can self distribute in most states. So if it sells it will get to market.

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This is true but only in the state of origin. Once you try to distribute across state lines you must follow the federal guidlines and can only sell to distributes and wholesalers which are largely controlled by big beer and the reason AB/InBEV, Miller-coors, etc., want to keep the 3-tier system in tact. As the craft beer share of the market keeps increasing, their lobby representation also keeps increasing and the system will continue to be adjusted to make accommodations for the little guys.

here's an interesting little info-graphic on the topic of who actually controls who in beer that atleast some of the so cold micro/craft brews ownership might surprise you.

https://www.msu.edu/~howardp/beerownership.html

phenry said:

That article just reads as AB is getting desperate. 19 new products in one year? That's a last ditch effort to regain ground in the beer market if I've ever seen one.

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I just dont get why they need to do this. They can make a flawless product everytime with a light beer but throw in the idea of a decent pale ale or an IPA and they refuse to even try. Instead they will hype something like Platinum instead, which is just stealing their own market from Budlight.

Farmer_John said:

In response to this and now knowing that Stella, Shock top and Goose Island Brews are owned by AB...don't buy the product. It's a simple solution. Negate their attempt at raising their bottom line by leaving it all in their warehouses...

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I knew Stella and Shock top were AB but was shocked by Goose Island. They are immediately off my list of beers I will buy.

SwampassJ said:

I just dont get why they need to do this. They can make a flawless product everytime with a light beer but throw in the idea of a decent pale ale or an IPA and they refuse to even try. Instead they will hype something like Platinum instead, which is just stealing their own market from Budlight.

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No, they are adding other brands and "craft styles" by using brands like Shock Top.

What they are effectively trying to do, is completely fill all of the shelves in a store with their products. At the end of the day, their is limited shelf space. The movie Beer Wars does a good job discussing this topic.

If a store has room to display 50 beers, and AnBev is able to fill 20 spots by sheer volume of types, and Miller-Coors fills 20....that leaves 10 spots for the rest of the craft world.

As others, I'll speak with my wallet with where I shop. And I do still by Bud-Light and other AnBev beers depending on the day or reason, I don't pretent to completely boycott them. But the majority of the time I avoid all of their products to support Craft Brewers.

Farmer_John said:

In response to this and now knowing that Stella, Shock top and Goose Island Brews are owned by AB...don't buy the product. It's a simple solution. Negate their attempt at raising their bottom line by leaving it all in their warehouses...

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We rail at the big brewers for making crappy light lagers, then when they brew quality "craft" beer we want to boycott them?

Why not make it a point to buy the beer you like, whether it's Goose Island or Bells, or Crankers (coming soon to Big Rapids Area shelves!)?

The big boys will see that craft beer is what a certain number of people want to buy. And they can get Goose Island and other craft beer to a larger number of people than GI could have done without them.

I buy local first, personally, but if there is no decent small craft beer available, I'll get the best Big Brand beer that is.

They won't brew a REAL beer with their major brand name on it because they are rightfully afraid their loyal customers will not buy it. They are trying to ease Bud and others into a craft mode in slow steps. If frat boys got a taste of a real "Budweiser IPA", they'd jump over to Coors. Beer with flavor is scary!

TyTanium said:

Well, then +1 for deregulation.

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That won't help - deregulation - who do you think stocks the shelves? your local grocery store has the distributor do it - as a result most of the space is stocked with what they want to put where. AB, or MC will arrainge to have theirs in the premium shelf space.

This all happened before in teh 1960's with soda wars that basically left of with Coke products and Pepsi products and Storebrand for sodas. Gone Grape or Orange Nehi (sorry Radar!) Gone others. The Cokes and Pepsi (or Nabisco, or Johnson and Johnson etc) by the shelf space from the Grocery store, adding a few $$ to the bottom line.

So if there were no regulation (or if there is regulation) we'd find it about what we have now, 99% of the space as BMC beers and 1% craft...

Homercidal said:

We rail at the big brewers for making crappy light lagers, then when they brew quality "craft" beer we want to boycott them?Why not make it a point to buy the beer you like, whether it's Goose Island or Bells, or Crankers (coming soon to Big Rapids Area shelves!)?

The big boys will see that craft beer is what a certain number of people want to buy. And they can get Goose Island and other craft beer to a larger number of people than GI could have done without them.

I buy local first, personally, but if there is no decent small craft beer available, I'll get the best Big Brand beer that is.

They won't brew a REAL beer with their major brand name on it because they are rightfully afraid their loyal customers will not buy it. They are trying to ease Bud and others into a craft mode in slow steps. If frat boys got a taste of a real "Budweiser IPA", they'd jump over to Coors. Beer with flavor is scary!

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I don't boycott them because they make a crappy light lager or because they want in on the Craft Market that they are now losing market share to. I boycott them because of the their business tactics.
Anyone who hasn't seen it should watch the movie Beer Wars. It will give you great insight into the problems that are AB-InBev and Coors/Miller.
They rely on gimmicky advertising vs. the quality of their product. 19 new products but how many are really NEW. You can throw the same crappy Bud Light in a can that has cold activated bars and reads "Triple Hops Brewed" or "Triple Filtered" and has a wider opening and call it a new product, but it's still the same ol' crappy Bud Light. Not only that, but they will then force the retailer to display it in a certain place in the cooler, along with the same Bud Light that's just packaged a different way while the craft beers get forced further back in the store.

I know someone mentioned earlier about bringing down the three tier system. That's very unlikely to happen because the lobbyists won't let it.

/rant

TyTanium said:

Well, then +1 for deregulation.

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klnosaj said:

This has worked so well in so many other instances, right? :cross:

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You say that in jest, but it actually has. For example, contrary to what the media would have you believe, deregulation in the banking industry has been highly beneficial.
Here are two studies: Strahan & Kroszner

I agree that lobbyists are definetly a problem, but so are uneducated sheeplike consumers. And as for deregulation i'm all for fewer laws taking away my freedoms.

Free market is always beneficial. Youre fooling yourself if you think government intervention solves anything.

Oh lawdy. If y'all wanna get into a general regulation/de-regulation talk, take it to the debate forum.

BrewKnurd said:

Oh lawdy. If y'all wanna get into a general regulation/de-regulation talk, take it to the debate forum.

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+1

Seems to me that the debate forum is for topics where everyone knows everything that they are ever going to know because lots of people talk but nobody listens.

Unlike the rest of the forums, which are generally for real conversations, real problems, real solutions.

That is the price of being publicly traded companies. The big boys' hands are tied. Even if they wanted to make good craft beer, their margins and more importantly their bottom line would suffer. This would lead to a lower stock price, disgruntled stock holders, and management being given the boot. BMC owe their allegiance not so much to the customer but Wall Street. BMC is not interested in bucking tradition. All they care about is the bottom line. If they could bottle urine, which in this writer's opinion, Bud Light is, and make record profits, they would.

Henry22 said:

Free market is always beneficial. Youre fooling yourself if you think government intervention solves anything.

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When was the last time you bought dairy milk and it poured out blue?

ReverseApacheMaster said:

When was the last time you bought dairy milk and it poured out blue?

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That's because Smurfs have very sensitive nipples.

Never had blue milk, but i live in a state that controls all alchohol sales and suffer for it. Can only buy cases at beer distributors and the few places that do sell singles pay out the @$$ for. So regulations, at least beer/liqour are a huge fail in my beloved pa.

Caucasian said:

Never had blue milk, but i live in a state that controls all alchohol sales and suffer for it. Can only buy cases at beer distributors and the few places that do sell singles pay out the @$$ for. So regulations, at least beer/liqour are a huge fail in my beloved pa.

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Those d@mn quakers!