Beer Sales being Pulled from Ebay

[ReverseApacheMaster]

Obviously both sides have some good points; however, the argument is obviously won by the brewers because the sale of alcohol through ebay is prohibited by their rules and by law.

 

[onthekeg]

Well, it is an interesting subject. Personally, I think the brewery should STFO of what happens after they sell their beer. They can only set up a sale to make it as fair an honest as they can. They can't read someone's mind and know if the next person in line is going to go home and put that beer up on Ebay. They say they care about people who stood in line and didn't get any, but there is no way they can sort them out and make sure they all get some. Maybe they need to unlimit the limited releases???

I think it's a problem they created themselves by driving up demand in the first place.

Something else to think about: What about people who live too far away and will NEVER have a reasonable chance to stand in line? The Ebay sales are a way for them to spend WAY too much money for the privilege of tasting the rare beer. The ebay seller is merely providing a means for those unlucky people (even more unlucky than those who were at least able to TRY for a bottle!) to get some.

As far as the ebay auction itself, the seller always seems to claim that the bottle is the item being sold, not the beer inside. Opening the bottle would ruin it's collectivity. So the seller is forced to sell only unopened bottles lest the bottle's value is diminished. Regardless, selling alcohol in ANY case is against policy and I think the law as well, so I think as long as Ebay can continue to monitor sales such as these (I've seen PLENTY of them) then the problem kind of takes care of itself (mostly, since there is still CL and FB and other avenues).

In the end, I find Hill's comments a bit harsh. He is taking very strong measures in support of a very few people and I'm not convinced the effort is worth it, or will be rewarded. Bottom line is that everyone has a shot at attending the sale and getting their hands on the beer, if they wish to take time off work, travel, get there early, stand in line, etc.

It's the brewery's *fault* that there is a limited amount. They are the ones who created the hype, the hysteria, and the desire for the product. So I don't understand why they get all bent out of shape when the expected happens because of it. #callingmrobvious

The only thing I will add is that is GM responsible for all the owners of their car after they sell it? Yes, until the warranty is over, meanwhile the gov keeps collecting taxes one way or another on that car until it meets its final demise.
I am sure the government wants to tax this again and again, but they can't currently.
I don't want a debate, but I am just saying that if alcohol isn't taxed to death, we will die.

At least there is Craigslist....

 

[onthekeg]

As a strong supporter of my local breweries, I go to a lot of limited release events. None of them are as crazy as KTG, Dark Lord, etc. However, I would be royally pissed off if I saw people hoarding up as many bottles as possible to put up for sale on the internet. It takes away from the local, "regulars", benefit that limited release beers were intended to provide IMHO.

When things have value, and you are able to capitalize why not? Its the same reason people buy things at a garage sale or an auction that is underpriced.
There is another name for it, ummmmm.... It escapes me rightnow.



Not really, its capitalism. Its the reason you have things to buy.:cross:

 

[Phunhog]

As a strong supporter of my local breweries, I go to a lot of limited release events. None of them are as crazy as KTG, Dark Lord, etc. However, I would be royally pissed off if I saw people hoarding up as many bottles as possible to put up for sale on the internet. It takes away from the local, "regulars", benefit that limited release beers were intended to provide IMHO.

I think the best way for them to handle this is some sort of lottery. You have to be present to win your number BUT you can't claim your beer(single) until the following week. Only the "true" locals will be willing to do this. I doubt anybody will be driving 4-5 hours to maybe get a ticket and then if they win drive another 4-5 hours to claim their beer.

 

[Phunhog]

Obviously both sides have some good points; however, the argument is obviously won by the brewers because the sale of alcohol through ebay is prohibited by their rules and by law.

I don't think it is quite that cut and dry...http://pages.ebay.com/help/policies/alcohol.html#additional

It basically says this about "collectibles"
– The value of the item is in the collectible container, not its contents.
– The container has not been opened and any incidental contents are not intended for consumption.
– The item is not available at any retail outlet.
– The seller will take all appropriate steps to ensure that the buyer is of lawful age in the buyer’s and seller's jurisdiction. In general, this is 21 years of age.
– Both the buyers and sellers ensure that the sale complies with all applicable laws and shipping regulations

As in interesting side note it is illegal to ship alcohol to several states. So what gives us the right to ship alcohol to those states for a homebrew competition? Is there something that specifically allows us to ship?

 

[grimstuff]

Obviously both sides have some good points; however, the argument is obviously won by the brewers because the sale of alcohol through ebay is prohibited by their rules and by law.

The illegality of this or that is irrelevant. Only thing that matters is if the law's being enforced. Clearly, the law is not enforced to the degree that would actually suppress the re-sale and shipment of one or two bottles of beer.

So, in this sense, the brewers clearly lose, because if they continue to sell bottled limited releases there will always be the one guy who resells them, or the brewer stops bottling their releases and deliberately limits the sale of their own brews. Lose, lose.

 

[Bobby_M]

Next thing you know, breweries will start suing customers if they pour some out of the bottle for the fallen homies. That's not an approved use of our product. There should be laws against swigging off the bottle too. Proper glassware required.

 

[Homercidal]

Having stood in line last year for the release of CBS I can understand id some people feel the need to recoup some $$ for the effort.

It's 1.5 hour drive from my house to Founders. I stood in line for several hours on a cold October morning. When I got home there were already several bottles of CBS up for sale on Ebay. Tell me those bottles weren't from locals.

People came from several states away to get some of that beer. I KNOW many of them brought friends and family along with them (some of the ladies there were NOT HAPPY at having to stand out in the cold just so their husband and boyfriend could get a few more bottles.) It's the nature of the beast.


FYI - My 2 bottles did not go up on Ebay. They went to friends. After standing there for several hours in the cold I can tell you the thought did cross my mind, but it was actually kind of fun in a strange way. There was a certain amount of camaraderie among us. Especially with Spongebob Man.

I think next time I'll either go much earlier and dress much warmer, or I'll go much later and not stand in line (Founders has expanded and are not likely to sell out next time).

The very large bottle shop in GR supposedly got like 2 cases and sold those in 3 hours a few days later when the retail bottles were delivered.

 

[jehowe]

Alcohol laws and Ebay rules aside, I am confounded by breweries putting 'pressure' to limit these sales. I'm not saying these sales should continue if there are issues with legality, just that it's not the brewers fight. Instead IMO they should be saying thank you for the free marketing and creating new customers of their products.

Any product whether it's beer, music, or ink cartridges, once produced and distributed is out of the makers control. Trying to artificially limit products always backfires, usually ending in bad PR.

 

[ReverseApacheMaster]

I don't think it is quite that cut and dry...http://pages.ebay.com/help/policies/alcohol.html#additional

It basically says this about "collectibles"
– The value of the item is in the collectible container, not its contents.
– The container has not been opened and any incidental contents are not intended for consumption.
– The item is not available at any retail outlet.
– The seller will take all appropriate steps to ensure that the buyer is of lawful age in the buyer’s and seller's jurisdiction. In general, this is 21 years of age.
– Both the buyers and sellers ensure that the sale complies with all applicable laws and shipping regulations

As in interesting side note it is illegal to ship alcohol to several states. So what gives us the right to ship alcohol to those states for a homebrew competition? Is there something that specifically allows us to ship?

No, homebrewers really shouldn't be mailing beer in those states.

Let's be honest. Nobody is buying those bottles of beer for a collection and not to consume. Ebay is trying to punt liability by forcing the seller to ensure the buyer can legally purchase beer (and impliedly that the seller can legally sell the beer) but that doesn't mean what actually occurs is either legal or within ebay's own rules.

 

[motobrewer]

the only argument i have on the brewer's side is:

people are making money off the brewer's trademark, using a method that the brewer himself cannot employ.

 

[ReverseApacheMaster]

Alcohol laws and Ebay rules aside, I am confounded by breweries putting 'pressure' to limit these sales. I'm not saying these sales should continue if there are issues with legality, just that it's not the brewers fight. Instead IMO they should be saying thank you for the free marketing and creating new customers of their products.

Any product whether it's beer, music, or ink cartridges, once produced and distributed is out of the makers control. Trying to artificially limit products always backfires, usually ending in bad PR.

For the brewery there are some concerns that can reflect negatively on how it does business. The buyer has no idea what condition the beer is in when purchased. It could have sat in a cool cellar just as easily as it could have sat in a hot garage. The poor quality from poor handling/storage can be imputed upon the brewery and give them a bad reputation. Russian River is a brewery that cares about that. They only ship to a limited area of the country particularly out of concern for the beer not being properly handled or stored so the consumer has the best possible experience with the beer.

Also, if you spend $25 on a beer sold for $10 at the brewery, honestly, your expectations for that beer probably exceed the true quality of the beer. It's difficult to live up to those expectations, which means the secondary market risks negatively affecting the reputation of that brewery. That effect is again compounded by the point above.

Additionally, that secondary market encourages people to buy up the limited releases to sell them away so the local market, which substantially supports the brewery, loses out. That's also harmful to the brewery's reputation and risks its revenue. If the brewery intended for those limited releases to go so far away, it could distribute them for that purpose. Some do that. They will send very few bottles into the local market so they can spread it out across their whole distribution market.

Again, there are some good counterpoints to these positions.

 

[danielbt]

For the brewery there are some concerns that can reflect negatively on how it does business. The buyer has no idea what condition the beer is in when purchased. It could have sat in a cool cellar just as easily as it could have sat in a hot garage. The poor quality from poor handling/storage can be imputed upon the brewery and give them a bad reputation.

This is a strawman. This obviously hasn't happened, because the demand for the product has not decreased even a tiny bit. If it eventually does, people will stop reselling HF beer, and they'll be super happy then, eh?

Win win!

 

[Homercidal]

Also, if you spend $25 on a beer sold for $10 at the brewery, honestly, your expectations for that beer probably exceed the true quality of the beer. It's difficult to live up to those expectations, which means the secondary market risks negatively affecting the reputation of that brewery. That effect is again compounded by the point above.

You assume the buyer is stupid and believes that the Ebay cost determines the value of the product. I think that anyone buying a limit edition beer on Ebay already understands that they are spending a LOT more just for the ability to get a beer that they would otherwise not have been able to purchase (Either from being too far away, as some people have concluded must always be the case, or maybe from having to work during the release, or maybe had a wedding to attend, or funeral, or some other event that would obviously be more important to them or their loved ones.)

Additionally, that secondary market encourages people to buy up the limited releases to sell them away so the local market, which substantially supports the brewery, loses out. That's also harmful to the brewery's reputation and risks its revenue. If the brewery intended for those limited releases to go so far away, it could distribute them for that purpose. Some do that. They will send very few bottles into the local market so they can spread it out across their whole distribution market.

Again, there are some good counterpoints to these positions.

Besides the fact that there are a few other reasons someone might not be able to attend a release event (see above), some breweries may not have distribution available to send their beer beyond the local area. I think they would still not mind if people outside the local area got a taste of their awesome beer and decided to stop in for dinner and a few drinks if they happened to make it over to their town. Or maybe they build a whole vacation on visiting breweries. Having sampled some of the beer might encourage them to stop by.

You can *assume* that the beer is in bad shape by the time the buyer gets it, but you can't say for certain that this is the case. It might very well be in better shape than any of that batch. They very likely put it up for sale immediately, so it probably hasn't had time to go bad. Perhaps the regular customers drank it before it's time. I would hazard to guess that anyone spending 3X or more for a beer is going to understand the beer's best tasting environment and condition.

 

[dbennett78]

I can see the breweries point from a legal standpoint. If someone can sell their beer through ebay without paying the TTB fees and following all of the state/federal regulations, then why cant the brewery just list all of their beer on Ebay and call it "collectible" to go around the regulations.

As far as quality/price gouging, I dont think they have a case as it is the same as someone selling a 10 year old bottle of wine. Who knows what conditions that bottle of wine was stored in. If people buy it without taking that into consideration, then they are foolish for spending that much money.

 

[pohldogg]

I haven't bought or sold beer on eBay. However the notion of someone telling me what I can and can't do with something I own is unsettling. Don't care if it's the manufacturer or the govt it just feel wrong.

And ont the point about aftermarket firearms, they only get brokered through an ffl holder for the background check and ownership records, the gov doesn't get any extra taxes on the sale.

 

[ktblunden]

the only argument i have on the brewer's side is:

people are making money off the brewer's trademark, using a method that the brewer himself cannot employ.

And the same can be said for the resell of any limited edition product. Low production equals high demand which gives rise to a secondary market. It's textbook economics. If people can't use ebay they'll use other avenues to sell the items. You're not going to stop opportunistic people from trying to make a profit. The only thing the brewery can do is either limit number of bottles sold per person (using an ID verification system to prevent someone from buying more than their allotment) or requiring consumption on premises.

 

[motobrewer]

it's more than simple arbitrage, it's arbitrage in which one party is legally disallowed in participating in the other market.

 

[TyTanium]

However the notion of someone telling me what I can and can't do with something I own is unsettling.

You can't kill people with the gun you own. Can't make meth in the home you own.

Point is, what you do with what you own often has externalities that affect others beyond yourself, both positive and negative. When negatives grow, that's typically when the gov't/regulators step in, for better or for worse.

 

[TyTanium]

it's more than simple arbitrage, it's arbitrage in which one party is legally disallowed in participating in the other market.

But that's why the arbitrage opportunity exists. If the other could participate, market price equilibrates and arbitrage disappears.

An example of Coase Theorem at work.

Adam buys beer from Brewery at price "P"
Bob cannot buy beer from Brewery at price "P"
So Adam sells beer to Bob for Price "P1", making a profit (P1-P) = π
Adam prefers $π to Beer
Bob prefers Beer to $P1, so both are made better off by the transaction.

The question is, as π grows considerably, how does the Brewery extract more π from Adam, and what are the Brewery's property rights concerning π?

 

[Lazarous]

selling the beer takes the control out of the brewers hands anyway. the brewer carefully crafts the brew then sells it to someone who may keep it in their driveway for 2 months then serves it at a party, what will people think? most people dislike the whole idea of scalping especially when the price is many times the original price but this brewer is charging at windmills.

Many breweries have specific criteria that the retailers they sell their brews to must accommodate, for example Russian River will not sell their beer (it may just be their bottles brews I'm not positive about keged beer) to distributors and retailers who do not agree to both ship and store the beer cold. I realize that your everyday consumer picking up a bottle from the bottle shop won't necessarily accommodate this but the point being a brewery does have some amount of control over how their product is treated, up until it is in the hands of the consumer that is

 

[ktblunden]

But that's why the arbitrage opportunity exists. If the other could participate, market price equilibrates and arbitrage disappears.

An example of Coase Theorem at work.

Adam buys beer from Brewery at price "P"
Bob cannot buy beer from Brewery at price "P"
So Adam sells beer to Bob for Price "P1", making a profit (P1-P) = π
Adam prefers $π to Beer
Bob prefers Beer to $P1, so both are made better off by the transaction.

The question is, as π grows considerably, how does the Brewery extract more π from Adam, and what are the Brewery's property rights concerning π?

The brewery's recourse is to raise price P until price P1 is no longer an attractive option. By the time the price gets high enough to kill the secondary market, the demand in the primary market will likely also be below supply. In other words, the brewery can complain about the small percentage of people profiting off their beers in the secondary market or they can suck it up and realize that they have a product so popular they can't meet demand and enjoy the profits they get from that.

 

[motobrewer]

But that's why the arbitrage opportunity exists. If the other could participate, market price equilibrates and arbitrage disappears

is that the only way arbitrage exists? If one party is legally disallowed from participating in the other market?

 

[TyTanium]

is that the only way arbitrage exists? If one party is legally disallowed from participating in the other market?

Not at all...exists when any inefficiency is present.

One could argue this isn't arbitrage at all, or at least not entirely. The seller bears the risk of reselling, cost of transporting, cost of storage, cost of acquiring the good, and time involved in doing so...so it's not truly a riskless, cash-neutral transaction at all. One could argue they bring a service to the market (distributing hard-to-find beers) and are being compensated for such services.

 

[motobrewer]

well, yes, i mean, that explains why the arbitrage opportunity exists.

my point was, that it is unfair because the brewer isn't allowed to participate in that market, legally.

 

[Homercidal]

You can't kill people with the gun you own. Can't make meth in the home you own.

Point is, what you do with what you own often has externalities that affect others beyond yourself, both positive and negative. When negatives grow, that's typically when the gov't/regulators step in, for better or for worse.

But you could buy a case of BMC and sell it to your neighbor as long as they are not underage.

 

[Phunhog]

But you could buy a case of BMC and sell it to your neighbor as long as they are not underage.

Ummm....pretty sure that is illegal.

 

[grimstuff]

Ummm....pretty sure that is illegal.

So is jaywalking.

 

[Homercidal]

Ummm....pretty sure that is illegal.

So you say I can't go to the corner store and buy some Blatz and take it to my neighbor? I'm fairly naive about that stuff, so I wouldn't be totally shocked if that was the case.

What if we go to a party at a friends house and someone calls and says, "Hey, can you pick up a 6-pack of All-Day IPA for me?" And you stop at the store and pick up a few things and when you get to the party they pay you for the 6-pack and that's illegal?

How about when you need your roof re-done and the neighbor comes over and helps you out "for a couple of beers"? Technically he's paid for the beer with the work he did, right?

Or when you go out on a date and get your girl drunk and later you have "intimacies". Technically you know she paid you back for the drinks with physical favors....

 

[GNBRennes]

Don't think its against the law to buy a case of beer and you don't like it or something then sell it to a friend or neighbor. Just like its not against the law to have a cover charge on a party with free give aways of homebrews. And if these are laws... well WTH break them anyways because its not breaking the law until you get caught. Then you can just say, I didn't know I couldn't do that officer.

Anyways those are small time things that do not matter and if we worried about them all we would be overflowing our prisons... oh wait we already are.

 

[TyTanium]

My point was not to debate minor legalities. My point was that gov't/regulators step in when negative externalities resulting from use of private property become sufficiently large. Such may be the case here.

 

[TKOriginal]

Technically you know she paid you back for the drinks with physical favors....

Oh College

Speaking of College

Just like its not against the law to have a cover charge on a party with free give aways of homebrews.

In some communities it is considered Bootlegging and is punishable by fine and jail time. I will tell you this is actively enforced in Cedar Falls Iowa by undercover police officers.

I realize I contributed very little to this discussion. Off to Ebay to buy some "bottles" while i still can.

 

[iambeer]

Oh College

Speaking of College In some communities it is considered Bootlegging and is punishable by fine and jail time. I will tell you this is actively enforced in Cedar Falls Iowa by undercover police officers.

I realize I contributed very little to this discussion. Off to Ebay to buy some "bottles" while i still can.

I will probably never set a foot in Iowa. I'm not sure it really exists.

I feel like I should also go to ebay to buy "bottles".

 

[eastoak]

Many breweries have specific criteria that the retailers they sell their brews to must accommodate, for example Russian River will not sell their beer (it may just be their bottles brews I'm not positive about keged beer) to distributors and retailers who do not agree to both ship and store the beer cold. I realize that your everyday consumer picking up a bottle from the bottle shop won't necessarily accommodate this but the point being a brewery does have some amount of control over how their product is treated, up until it is in the hands of the consumer that is

that is what i was referring to, i would guess they are the people selling on ebay and not a distributor.

 

[zeg]

I'd be extremely surprised if reselling beer to your neighbor were actually legal anywhere in the US. It's a minor violation, so no one is likely to notice, but that doesn't make it legal. (Note: I'm thinking of the case where you buy it, then separately sell it to him. This is probably different from if he gave you the money and you brought it home for him.)

The ebay sales are quite clearly illegal in many or most US places, so the various examples of the unfairness due to the asymmetry are spot on.

Other than this, though, the brewery has no moral right to object to resale of its goods unless it wants to negotiate (or demand) an explicit agreement not to re-sell its products. I have heard of this happeneing, maybe with one of the Pliny beers, and in that case it's different. But if they are selling the product openly, then their only further claim would be a trademark violation. That would only apply if someone were misrepresenting the product---say, refilling the bottle with another product or claiming to be an authorized distributor or reseller.

 

[jerseybrewing]

I think that the breweries that were doing most of the yelling against it may find their "sold out in a day" releases lingering longer. I have bought, sold, and traded beer for years and was happy to have a chance at things i could only get if I bought a plane ticket. To me, I was saving time and money. I dont need to try every beer, I dont even rate them. I do want the opportunity to try the ones i want to try though. Without ebay, that changed the landscape and made it infinitely more difficult to obtain rare beers. Personally i hope that Russian river, hill farmsteads hill, and cantillon find out their beer is not that popular outside the hoarders and the hoarders ability to get the beer to people outside their small distribution network. They may have to come down from their High hill. I know i wont buy another bottle from any of the 3 above thanks to their efforts, sounds childish but so does the whining... I mean efforts these breweries made to stop ebay sales. Hopefully more people will follow and find better breweries to follow. there are plenty!

 

[mforsman]

if someone was brewing beer, putting it in hill farmstead bottles and selling them this brewer would have a legitimate gripe. once the item is sold it belongs to the buyer, maybe he should start leasing the beer?

I never buy or lease beer. I just rent it! In one end, out the other a bit later.

 

[motobrewer]

what about....buying a typed list of rare beers?

http://www.ebay.com/itm/ws/eBayISAP...27893590&lgeo=1&vectorid=229466#ht_520wt_1395

 

[Lazarous]

that is what i was referring to, i would guess they are the people selling on ebay and not a distributor.

Obviously, I'm just trying to get across that I think any legitimate business owner would be annoyed to find some a$$ illegally selling your product and for the most part selling a product that would be considered inferior

 

[dbennett78]