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

ktblunden said:

The brewers are not the ones making the decisions, career executives with no background in the actual brewing process are.

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This is exactly what is going on. Go look at InBev's corporate "Who's Who" (http://www.ab-inbev.com/go/about_abinbev/management_structure/who_is_who.cfm) and find one person there that has brewing education. The closest you will find is the Chief Supply Officer.


It is not like this makes me want to boycott InBev. They are a company trying to make money. So what? But, I will not simply buy their product due to some loyalty or nostalgia. If it tastes good and continues to taste good, I will buy it. If not, not. In capitalism, that is the role and the right of the consumer. If people stop buying, you fix the problem or die.

Oh man!!!!!!


Inbev is like the empire!!

Glad to be part of the Rebel Alliance, and I am absolutely THRILLED to have something much more vile and disgusting than AB (the company, not the beer) to actively and passionately HATE..

Same thing for Magic Hat. Their beer has become less than what it was... and I can only imagine what will happen now considering NAB was sold.

Skelator said:

Same thing for Magic Hat. Their beer has become less than what it was... and I can only imagine what will happen now considering NAB was sold.

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Magic Hat to me was always like the red-headed stepchild of micro brews.

What does it take to make an anti-trust case these days?

tennesseean_87 said:

Which part of the Constitution does this?

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If you look back to the late 1800s and early 1900's good ole' America was built on Monopolies and squeezing every ounce of productivity out of as little workforce as possible in often very hazardous conditions. Anti-Trust laws were put in place later down the road to prevent these types of monopolies as they are inefficient on a Macro scale and create a large dead weight loss to society. We are seeing this with InBev. And this is more of an Oligopoly rather than a monopoly, but just through conversations posted on this board we can see the loss to society from an economic standpoint. InBev, MillerCoors, etc are able to make a lower costing product, sell at higher prices, and employ less people. This is to the benefit of shareholders, but overall loss to society. Monopolies/Oligopolies are very vulnerable to diversification, as they are typically very good at providing one type of product. When demand for other products and complimentary goods grows they suffer losses. You can see this in the article, with demand for InBev products dropping. Rational people will not continue to pay premium prices for a sub-premium product. In fact we can thank InBev (and our local gov't, in the form of alcohol tax) for the craft beer explosion and homebrew explosion.

Brewing the Goose Island mainstays elsewhere allows for them to brew more of the special edition beers. Picked up a 4-pack of the Bourbon County Stout 2 weeks ago. Never had a chance of trying it before this year.

Not bad, but lots less roasty than I expected. 15% alcohol.

I don't care much what happens to InBev etc. I normally buy Michigan made craft beer and I can't imagine every one of them will be swept up by the big guys. Probably Bells though. I fully expect Larry Bell to sell out at some point when he's had enough of the BS you have to go through to make and sell beer nationally.

Darwin18 said:

What does it take to make an anti-trust case these days?

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Got this off a website:

Sherman Act doesn't regulate how big a company may get unless company continues to buy up other companies in such a way as to:

substantially lessen competition; and
tend to create a monopoly.

With as many micros as there are now with more popping up everyday they will never be considered a monoply, and there will always be competition. Unless the small breweries keep selling to the point there isn't much competition.

AMonkey said:

Got this off a website:

Sherman Act doesn't regulate how big a company may get unless company continues to buy up other companies in such a way as to:

substantially lessen competition; and
tend to create a monopoly.

With as many micros as there are now with more popping up everyday they will never be considered a monoply, and there will always be competition. Unless the small breweries keep selling to the point there isn't much competition.

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This is true. A good example of this is Microsoft. When Apple was struggling in the 90's Microsoft loaned them $150 Million to keep them afloat. If Apple went under Microsoft would be the only game in town and a huge target for anti-trust legislators. It was a good plan at the time, but they probably regret it now.

InBev will leave enough competitors around to keep them out of trouble with the Anti-trust people.

AMonkey said:

Got this off a website:

Sherman Act doesn't regulate how big a company may get unless company continues to buy up other companies in such a way as to:

substantially lessen competition; and
tend to create a monopoly.

With as many micros as there are now with more popping up everyday they will never be considered a monoply, and there will always be competition. Unless the small breweries keep selling to the point there isn't much competition.

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"Substantially" is the operative word there. If craft beers represent 5% of the market and AB-InBev is on a path to control the other 95%, I think you could make an argument that they will have substantially lessened competition.

ktblunden said:

"Substantially" is the operative word there. If craft beers represent 5% of the market and AB-InBev is on a path to control the other 95%, I think you could make an argument that they will have substantially lessened competition.

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True. If they takeover Miller/Coors then they would be considered a monopoly. Then all they would have to do is manipulate grain and hop prices or lower their prices for a while to hurt the small breweries then jack prices when they are the only ones around.

ktblunden said:

"Substantially" is the operative word there. If craft beers represent 5% of the market and AB-InBev is on a path to control the other 95%, I think you could make an argument that they will have substantially lessened competition.

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Agreed. To argue that craft beer is going to be the substantial competition is simply not accurate currently. It may be somewhere down the road, but right now, its much more SAB-Miller that keeps InBev from being a monopoly in the US than craft beer.

WRT monopolies, as long as the monopoly is well-behaved, it isn't (and I'd argue shouldn't) be punished. *Being* a monopoly is not against the law, but abusing the power that comes from one is.

Making crappy products isn't an abuse of monopoly. Manipulating market prices (mentioned above), selling at a loss to drive a weaker competitor out of business, erecting artificial barriers to entry, etc, are.

Having a competitor around, however, can shield you from some scrutiny, so it's useful. I'm certainly not a lawyer, and I don't know whether the microbreweries together would be sufficient to demonstrate competition. Even though their collective marketshare is tiny, given that many of them are doing well is evidence that the AB/InBev monopoly is not shutting out competition.

It's pretty easy to obtain quality beer in most parts of the country, certainly every place I've lived. We certainly don't seem to be suffering much of a lack of choice because of AB/InBev's size.

weirdboy said:

Goose Island is a high end microbrewery. They were independently owned for many years and the owner(s) just sold the company to AB-InBev last year. So, maybe if you are an elitist you can choose to call them "sellouts" since they chose to, you know...sell their business that they built up over many years. However, so far as I know, they are still running the same operation and selling the same beers they were two years ago.

You may not like that beer you picked up, but it's not because they are AB-InBev swill or whatever you convinced yourself.

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You obviously didn't read the article. It states that Goose Island is no longer just brewed in Chicago but now in NY and one other place so NO they are not still running the same operation.

Soon, everybody will be Taco Bell.

i wonder what will happen when sierra nevada, new belgium, and now oskar blues open up breweries near ashville, and lagunitas in chicago...will anyone taste the difference? or is the argument simply that BMC doesn't pay attention to the differences in bought out products that don't have their actual name on them?

i noticed a difference in goose island's ipa right after the move...haven't ordered one since, but i suspect they tried to take care of whatever water treatment problems they were having. this could make a case for BMC caring more about lost revenue from a bad batch than proper quality control. i assume they corrected any problems due to hall still having input on his beer...maybe not for long, though.

it'll be interesting to try some of those west coast breweries after they move.

heferly said:

i wonder what will happen when sierra nevada, new belgium, and now oskar blues open up breweries near ashville, and lagunitas in chicago...will anyone taste the difference? or is the argument simply that BMC doesn't pay attention to the differences in bought out products that don't have their actual name on them?

i noticed a difference in goose island's ipa right after the move...haven't ordered one since, but i suspect they tried to take care of whatever water treatment problems they were having. this could make a case for BMC caring more about lost revenue from a bad batch than proper quality control. i assume they corrected any problems due to hall still having input on his beer...maybe not for long, though.

it'll be interesting to try some of those west coast breweries after they move.

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I think the difference is that those breweries focus on the taste and quality of their product first and foremost. I'm sure they're putting the effort in to achieve a consistent product that meets their standards, not just moving production and being surprised that people think it tastes different as we see from the quote in the article regarding Becks and Bass.

ktblunden said:

I think the difference is that those breweries focus on the taste and quality of their product first and foremost. I'm sure they're putting the effort in to achieve a consistent product that meets their standards, not just moving production and being surprised that people think it tastes different as we see from the quote in the article regarding Becks and Bass.

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i agree, but there's still a case for water profiles, hop and grain contracts, etc, that may add up to a difference in taste. either way, i eagerly await the opening of lagunitas.

i also agree with someone's earlier comment, that the brewers at BMC are obviously capable of manipulating water chemistry, yeast pitches, etc...if it's coming down to cutting costs, which it sounds like according to the article, it only makes sense that inferior or less ingredients would be used, and the taste affected.

i sure hope this isn't the case for goose island, though. prior to the buyout, i was getting 312 and ipa from costco within 2 weeks of bottling...that's changed now, as i'm getting ipa from new york, and 312 from redhook's brewery. the 312 is just as good as before, though, albeit canned. maybe i'll give the ipa another try soon.

I hope people understand that when you're selling something, even if all you care about is making money the only way to accomplish that goal is to give the customer what they want. The desire to get money drives businesses to give customers something they want to buy.

So, if a business delivers something you want to buy, buy it. Don't not buy it because in your opinion all they care about is money. That's pure silliness.

+1, Exactly! It's called "Identity Branding", trying to deliver a little better product and service than the competition. Look at the founder of Sam Adams. The guy obviously loves beer and it was one of the huge selling points, not just that they had good beer, they cared about their beer and what beer lovers thought about their beer. They cared about the product first and let the profits follow.

I had always assumed that AB could make a good ale if they wanted to, but lately I wonder. Why haven’t they ? Look at Bud Ale. The best thing you can say about it is that it doesn’t suck much.

They say Bud goes grain to glass in 28 days. I’d expect they could do an ale in half that. That should more than offset higher priced materials . . . er, ingredients.

AB’s genius is in marketing. The documentary “Beer Wars” said their boardroom has an extremely well stocked cooler, with practically every beer known to man.

You’d think they would view the growth of strong ales with avarice and twitching anticipation. But no. Are they going to be content with cost cutting and shrinking demand ?

It would be nice if breweries like Sierra Nevada could remain private corporations. I think not having to worry about public shareholders makes a big difference. But, if they keep expanding, eventually they are going to be forced to become public corps.

ryno84 said:

It would be nice if breweries like Sierra Nevada could remain private corporations. I think not having to worry about public shareholders makes a big difference. But, if they keep expanding, eventually they are going to be forced to become public corps.

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Why would they be forced to do go public? Cargill is private and had revenues of 119 billion in 2011. Sierra Nevada's production in 2011 was 780,000 bbls. If they sold every pint of that at 5 bucks (and they don't get near that, particularly on packaged beer), that's just over 1 billion in revenue. They have tons of room.

i also agree with someone's earlier comment, that the brewers at BMC are obviously capable of manipulating water chemistry, yeast pitches, etc...if it's coming down to cutting costs, which it sounds like according to the article, it only makes sense that inferior or less ingredients would be used, and the taste affected.

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I would guess a lot of what people think of as different is just the beer being fresh.

Wynne-R said:

You’d think they would view the growth of strong ales with avarice and twitching anticipation. But no. Are they going to be content with cost cutting and shrinking demand ?

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Their goal is, as has been said, to sell beer that maximizes their profit. Their current recipes are inexpensive in terms of ingredients, and the 28-day process (or whatever) isn't a big deal because of the pipeline effect. The biggest market in the US is by far the weak light lager market, so there's not a huge incentive to branch out.

It'd risk validating the snooty microbrew style beers in the eyes of the brand-loyal masses. Also, they're not likely to convert many of those in the snooty microbrew market to come back. Not a lot of upside, and it really wouldn't leverage their competitive advantage.

zeg said:

Also, they're not likely to convert many of those in the snooty microbrew market to come back. Not a lot of upside, and it really wouldn't leverage their competitive advantage.

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Ah, but they do catch some people off guard with new brands, and if those people like it, they'll most likely keep buying it (excluding those who won't on principle). Case in point, blue moon

heferly said:

Ah, but they do catch some people off guard with new brands, and if those people like it, they'll most likely keep buying it (excluding those who won't on principle). Case in point, blue moon

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Maybe, but it'd take an awful lot of that to match the sheer profitability of hocking cheap swill.

To me, the question of whether it's by choice or ability that AB brews like they do is answered by Mitch Steele. He was assistant brewmaster at one of their breweries prior to moving to stone. So, while he was there, it is unquestionable that they had the talent and creativity to brew great, exciting beer. And they chose to brew what they brew. I have no reason to think it's any different now.

OMG it's an anti-BMC thread that doesn't quote Beer Wars! lolz. I am still not going to buy anything made or partially owned by BMC. Hell, I hardly buy ANY beer anymore and why should I? I can make a tasty drop for far less than I can buy it... No, I am not saying I can brew beer as good as the super awesome craft breweries here in America but I sure can brew stuff that tastes better than most BMC/BMC-ISH brews! When I do buy beer, it is 100% American craft beer and mostly sours...

Zamial said:

OMG it's an anti-BMC thread that doesn't quote Beer Wars! lolz. I am still not going to buy anything made or partially owned by BMC. Hell, I hardly buy ANY beer anymore and why should I? I can make a tasty drop for far less than I can buy it... No, I am not saying I can brew beer as good as the super awesome craft breweries here in America but I sure can brew stuff that tastes better than most BMC/BMC-ISH brews! When I do buy beer, it is 100% American craft beer and mostly sours...

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I'm pretty sure InBev has no plans to introduce a Bud Sour.

Thank god and/or whoever else for home brewing and the community that comes with it. InBev will never be able to destroy all the good beer unless they destroy us. Our kettles will get larger, our fermentors will grow in volume -- we will drink and laugh and joke how inbev can't buy out our home brewery. Neighbors, colleagues and co-workers will come to us for the beer they desire, some will become converts and be welcomed into our beloved hobby. Others will come to our houses and witness the awe inspiring transformation of sugar to ethanol by a single celled organism and they too will see how special the craft of good beer is. The responsibility is on us to keep good beer alive. We are the ones that make that choice.

AB InBev has the ability to make Budweiser in multiple breweries around the country, using water that exactly matches the profile they established in St. Louis.

The water is most likely not the difference in Beck's, though it could be part of it. They could be using domestic hops and/or malt instead of the German varieties due to price, and that wouldn't surprise me a tiny bit. "Same ingredients" is probably a flat-out lie.

A small craft brewery would have to be publicly traded to be taken over against their will, right?

cheezydemon3 said:

A small craft brewery would have to be publicly traded to be taken over against their will, right?

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Yes.

But, the big guys can put significant economic pressure on the little guys and make selling attractive. Thankfully, we've not seen too much of that. Very interesting economics in this market.

I've seen one or two small breweries get "help" from larger companies and eventually get in debt trouble trying to expand. Then the larger company can make a deal to buy them out, or they end up closing. There are ways larger breweries can manipulate a smaller company.

I think the laws and public interest are starting to help the smaller brewery be able to compete better. Public interest in craft beer helps the stores want to stock that kind of thing, rather than choosing their stock based on macrobrew "incentives".

BrewKnurd said:

Why would they be forced to do go public? Cargill is private and had revenues of 119 billion in 2011. Sierra Nevada's production in 2011 was 780,000 bbls. If they sold every pint of that at 5 bucks (and they don't get near that, particularly on packaged beer), that's just over 1 billion in revenue. They have tons of room.

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One thing, though, is that Sierra Nevada is a manufacturing company and Cargill is (primarily) a trading company. That enormous revenue figure can be misleading because a lot of it is made up of commodities they might not ever even touch (back to back). And often times they are selling commodities before they've even bought the goods themselves so while they're borrowing huge amounts from the banks, they're interest rates are very low and held very short term (probably rarely more than a few months). And take Wal-Mart; they frequently sell goods to their customers before they've even paid for it themselves (nice long credit terms).

A lot of the debt Sierra Nevada takes on would probably be for buildings and machinery and would be much longer term and higher risk. So it's more expensive and they're much more vulnerable to market conditions and could have much more trouble getting it.

As long as the market is competitive, I guess I don't care about AB InBev's style, though it is pretty sad.

Although I don't drink Anheuser-Busch products I think its sad that an American company can be gobbled by a foreign company. Laws should be more strict to prevent that from happening.

here's a list of imported beers that are AB-inbev owned or
Importation and distribution for these international beers in the U.S.:
• Harbin Lager
• Tiger Beer
• Kirin
• Bass Ale
• Boddingtons
• Beck's
• Hoegaarden
• Leffe
• Stella Artois
• Löwenbräu
• Tennent's Ale
• Budvar Czechvar

this thread has hurt me cause hoegaarden & leffe were two of my favorite standby's purchased in-between kegs..... will now have to purchase Unibroue trois pistoles and/or la fin dumone.. most every style i have tried from unibroue has been good!

"InBev, the largest beer company in the industry, has over 250 beer brands produced and sold throughout the world. This list does not include the beers acquired from Anheuser-Busch during the great de-iconizing of 2008."

here's the link to the list: it's too huge to paste here & it blew my mind how big corporate gobbles up companies....

http://www.drinkamerican.us/faq/31-general/54-inbev-brands-to-boycott.html

danielbt said:

AB InBev has the ability to make Budweiser in multiple breweries around the country, using water that exactly matches the profile they established in St. Louis.[...]

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And yet everyone I grew up with thought Bud produced in the Merrimack NH plant tasted quite different from St Louis Bud. And not in a good way...

Cheers!

aubiecat said:

Although I don't drink Anheuser-Busch products I think its sad that an American company can be gobbled by a foreign company. Laws should be more strict to prevent that from happening.

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Why?