Cheers to Michelob

So you just used the synopsis of a "documentary" (and I use that term loosely) that was designed to bash AB (IMO) as your supporting argument?

 

You need to take Beer Wars with a grain of salt. It's a biased view of the industry. While I admit the 3 tier system is a sham, the whole idea of AB telling all retailers what they are going to buy and how it's going to be displayed is actually a real stretch of the truth.

While this may be true for independent retailers and small regional chains, it's irrelevant because AB doesn't care about them anyway. AB cares about the big fish like Walmart, Kroger, Supervalu, the major c-store chains. I can tell you that AB doesn't tell any of these guys what to buy. However, they are the category captain, which does allow them to position their product where they want within a specific, pre-defined area of the shelf space in the store. AB doesn't pick the product or the amount space. The retailer decides these things, but may allow AB (as category captain) to arrange the shelves for them.

The same thing happens in every single aisle in a retail store. Every section, or product category, has a captain. One company I worked for sells to all of these retailers, and the captain is SC Johnson. If they introduced a product that competed with an SCJ product, it would get the worst possible placement in the category. It's just the way it works in retail.

 

No, actually, I based my argument, in part on things i have read and in part on first hand knowledge. I was the Assistant manager of a gas station that sold beer, i was fired because i refused to let an AB rep re-arrange our beer cooler to suit HIS idea of where the beer should have been. When this happened i was a Coors Light drinker, I had NO clue what craft brew was and had only dabbled very slightly in making beer(i was a winemaker at that point). So i have seen FIRST HAND the effect of these reps not getting their way. 3 days after i told the AB rep, very politely i might add that he was not going to rearrange our cooler, my district manager came in and fired me, and told me it was because of a call he got from AB offices. So yes, THEY DO dictate placement.

 

That's true, but it doesn't make it right.

 

So blame the liquor stores then. Its a free market, nobody has to sell to bmc.

 

The issue is whether it is a free market, or whether the big guys put up barriers to entry on their competitors.

 

Everywhere i go Bmc dominates all the resteraunts/ convenient stores etc.. ive been in most cases.I dont know how it is now cuz im pretty homely these days, but as ive known they have always been up front at ball parks and every resteraunt ive ever known, im also not a walmart fan.They have been somewhat of a monopoly in the past,but money talks i guess they are gonna be buying the little guys to make up for the loss.Seems goose island is a good example.

 

The barriers are there to safe guard the free market. 100 years ago, bmc either owned the store or tavern, or had an exclusivity agreement. There was no other choice. People should be happy there are distributors. Without them, bmc would own your local bar or store.

So bmc bypasses the distributors and enforces good product placement? Maybe bmc sells better so the store makes that choice.

My liquor store actual promotes craft beer.

 

my local pub has several taps and about 100 different bottles (both change regularly). they do always have bud light on draft, but that's the only bmc on tap. they also have all the regular bmc's in bottles, but they are under the counter and you can't see them. I doubt AB picked that placement. i'm pretty sure the only reason they have any bmc is to not exclude customers that may want it.

 

Nonsense. 100 years ago there were as many breweries as there are today.
http://www.brewersassociation.org/attachments/0000/5674/totalbreweries2010_download.jpg

 

My local liquor store is not allowed to sell craft beer, or any beer for that matter. But that's another issue.

The theory of free market economics assumes that a "perfectly competitive" marketplace is best, and that assumes limited barriers to entry. I'm not arguing that BMC is wrong to have more shelf space than Rogue or Stone, but there is legitimate concern when big companies focus less on creating better products than on stifling choice.

People seem to think free enterprise means anything goes. That's certainly not what Adam Smith thought.

 

I'm not a real big fan of BMC light beers just aren't really my thing since I've moved onto better tasting stuff. I don't really like their business practices but at the same time I can't really say I blame them they do basically the same thing every other big company in any other industry tries to do.

That being said I don't buy BMC products simply because I would rather give my money to craft brewers. Their beer tastes better and is what got me into home brewing so I return the favor. Also I need their bottles.

 

I'd like to read the information you speak of. Did you ever hear of wrongful dismissal? I'm sure there must have been a little more than telling a rep he couldn't change a display.

 

Assuming Ohio is like most of the United States, employment is at-will. There's no concept of "wrongful dismissal" except for cases of discrimination. Employers can fire someone for any or no reason. Of course the employee is also free to leave for any or no reason.

 

May not be right, but I guess the point is that it's not the manufacturers (ie AB) that are pushing this type of model, it's the retailers. It's less work for them. On the flip side, however, if AB makes a decision that hurts the retailer's sales, they are typically penalized in some way. This could be in the form of money or other types of incentives to the retailer, or they might lose shelf space for their product. In a worst case, they could lose their captain status.

 

If you worked for a c-store chain, odds are it's not your call to decide where the beer goes. It's typically decided by someone way higher up in your company. Also, with food and beverage products, the inventory is typically managed by the manufacturer (or distributor in this case). They rotate out the old product and rotate in the fresh product. Retailers prefer this because they only pay for the product that sells and not product that goes stale on the shelf. The rep probably had every right to be in the cooler. He was probably given the authority to do so by someone in your company, which would explain why your DM came down on you.

 

He wasn't talking about the number of breweries,but that saloons up to prohibition were "tied houses" built or owned by the brewery,& you had to buy & sell their beer.
This was before the law changed,& brought forth distributors. But there were a lot of small breweries before prohibition that disappeared when prohibition was in full swing that never re-opened their doors. Or went belly up shortly afterwards.
It took decades for the number of breweries to go up to pre-prohibition levels.
I'm just glad we have so many craft beers today that we're getting to be the beer capitol of the world.

 

Exactly, i was not a contracted employee And i am white, and the guy to fired me was white so the race card/discrimination idea wouldn't fly, and yes Ohio is at will employment.I did contact a lawyer about a wrongful termination suit, and was told not to waste my time or money that it wouldnt go anywhere.

 

I worked for Clark, But my station was not chain owned, it was Owned by a Local guy but still had to answer to corporate on certain things, such as we could only sell Clark Gas, had to carry certain Clark specific products etc. The Distributor dropped off the beer order weekly, he just sat it in the back room it was the employees job to stock the cooler. That was the first time i had ever seen an AB rep in the store, and at that point i had worked there over a year.There was No lay out anywhere in the store to follow, We simply restocked what was there and had been there the whole time i worked there. The problem the AB rep had was the products of theirs that they wanted front and center were on the far left hand side of the cooler, and do to the store set up, pretty much out of sight unless you were looking. It was a very small store with only one beer cooler that had 3 doors and limited shelf space. Because i full part of it was Pop.

I Didn't not set it up like that, just how it was when i started, which tells me that a rep from AB had not been in the store in at least a year. Nor was i rude to him, I simply pointed out that it had been like that for a year, and unless the manager or District manager instructed me to change it, that it was going to stay the way it was, i pointed out that he was an AB employee, NOT a store employee and that he had no business attempting to change the display, without out the consent of owner or store management.

He became VERY hostile about the whole situation, even though i had been very polite, and finally had to be informed that if he did not leave, i would be forced to call the Police and let them handle it, because he was making quite a scene in front of many customers. Customers who later complained to the manager about the guys behavior, and praised how i handled it. These people are very much use to getting their way and become very hostile when they do not. Mind you in this town, at that time, which was a large number of years ago, BMC was the only game in town, and the closest thing to Craft Brew we had was Corona or Heineken, So it wasn't like i had Great Lakes Products front and center, all we had was BMC and Corona we didn't even carry Heineken, and the products that WERE front and center were also AB products, Just not the ones HE wanted front and center. Bush was our biggest seller so it was in front, he wanted Bud Light in front.

 

lmao!

 

Thats true, but those were only a few big breweries and the rest were small (like now, except our craft breweries are probably way bigger) - they didnt distribute past their own town most of the time. There wasnt any refrigerated trucks back then. What theyre counting as breweries, is what you and I do, basically homebrew being sold out of their house - except it was legal then for them to sell it down the street too. Most people didnt really even drink beer to get drunk back then.

BMC owned the market back then too, along with a few others like pabst. There were still only a few major players, hence the three tier system was created - so that budweiser didnt own the bar down the street and make the beer - which was the case. I recommend you check out the history channel special on beer "brewed in america"

 

I am not 100% sure on how they determine where their product is placed within a store, but in the case of other types of retail, manufacturers will pay and have contracts to have their product displayed in certain areas.

I worked for Sportman's Warehouse for a bit, and in one of the pistol cases, only Smith & Wesson's could be put on a certain shelf because they paid to have them there.

 

So maybe the craft brewers should pay to have the prime spot...

but that wouldnt work! because the craft beer drinkers look for the craft beer, and the BMC guys will look past the craft beer to the bmc. That's just the way it goes.

Might as well not even classify the two has the same beverage, in fact we shouldnt.

 

Edited line due to misunderstanding!

Not trying to pick a fight, but all these arguments are useless when BMC light beers are what 90+% of beer sales. You think their practices are ditry, but when a company produces a product that makes up almost all of beer sales in a nation, of course they are going to have more volume, more sales and more influence.

If a bar/grocery store/beer store stands to make vastly more money by selling one product over another, of course they will give more display space!

The only way anything will change is if Americans suddenly stop drinking the cheapest, most popular beers produced.

 

Well said.

Also, if bud is paying for space, its too take it away from millercoors... theyre not worried about the SNPA drinker, because its a different market.

 

I think this is very wrong. There was just another post were Inbev is now claiming 12 different area codes so that they have a line that will be like "312 Wheat". Why? because more and more people are switching to craft beer. The pie is only so big for "beer profit dollars". While Sam Adam's my be less than 1% of that pie, you are talking about MILLIONS of dollars...

BMC knows they are loosing more people everyday. So to combat the loss they are not only partnering up with craft breweries, they are planning their own craft beer lines! Inbev is the going to be this "area code" beer and Miller/Coors is going to be "10th and Blake". If you do not think they will then try to bully the non-BMC beers out of shelf space, I think you may be wrong but admittedly this is mostly speculation.

Here in WI, Miller/Coors just screwed over all the craft breweries and it will take effect just in time for the 10th and Blake line to hit the shelves! Here most of the craft beer is going to go up in price and M/C is probably going to have the cheapest craft beers on the shelf. We tried to rally and get the bill stopped but when M/C pays the maximum allowed in campaign contributions to your politicians, what side do you think that politician is going to vote for/against?

Like I have said before, I dislike BMC for what they do and the power they hold. I think they have an inferior product but have made the inferiority a gimmick so that people accept the flaws as normal. The only thing BMC can do is be consistent with the products they produce.

If you choose to support, love and drink BMC products don't be shocked when some of us do not agree with you. I do not normally get involved in threads like this because, I come of as "preachy". IRL if my friends or family want to enjoy a BMC I do not say a thing. If they offer me a BMC, I polity decline. If they prod at me to find out why, I will be happy to tell them. I however do not tell my FIL or mother that every time they drink a Miller they are screwing the WI craft breweries, even if that is how I feel. Beer is my passion and I do not expect everyone I know to have the same views as I do on this subject.

 

The only thing that i have stated is first hand knowledge is me being fired because an AB rep didn't get his way. None of the rest of what i said was first hand knowledge, it is things i have read or heard.

 

Ok. My mistake and apologies!

This whole issue is a pretty close anology to the walmart vs. small business shops haha

 

No worries man. Honestly, i dont know where people live that they have the whole walmart vs. small business, Where i am from which is a VERY small town, less than 10,000 people, we have always had chain department stores, First it was Ames, and K mart, then it was wal mart and K mart, now its just a wal mart super center. We still have small stores on the square, and they still do good business because they carry things that wal mart does not have, Nike for example. Kmart in this town was going under before wal mart got here, so from what i have seen here at least, wal mart really hasnt had that much of an effect, the Grocery store is still doing well, because they carry better quality meats,produce etc. So i personally haven't seen the whole "evil wal mart thing" as a matter a fact it provided a lot of jobs for people laid off from factory's.

 

I agree with your last paragraph even though we differ in opinion. A debate on a public forum from members with different views? Who would have guessed

To me I take BMC for what it is. It is not like they are making a beer comparable to craft brews and demanding the same price. They are FAR cheaper than craft brews, and as a tree hugger (although politically pretty conservative...I know, I am a walking paradox), I love the fact that they can thier products. So by looking at how my main interests are environmental, yours are the accessability of the small brewers to the beer market, it becomes clear where the difference in opinion exists. And I respect that!

I personally don't need blown away by every beer I drink so the light lagers have a respected place in my mind. I am also a broke college student so I appriciate having a style of beer that I can enjoy on a budget. Hell, I can have a full fridge of homebrew but still have a case of light beer on hand since it is cheaper to buy then go through the process of brewing and trying to replicate. Plus there are plenty of times I would rather have a bunch of light lagers than even my kolsch or mild brown ales (typically the lightest beers I brew).

 

You must think people are pretty stupid, if they can be convinced to buy beer they don't like, or that they can't move one isle over to find a craft beer if that's what they like. At least where I'm at, no bar around here has more than 3 taps for BMC, and the rest are decent craft beers.

We have it really good in this country. I don't see what people always complain about. Most craft breweries are at full capacity. Some are having to reduce distribution. Yet - BMC has a stranglehold on the market at the same time. It doesnt add up.

It has to be regional. I know some states have laws to restrict abv and stuff, but some of you complaining are states with good craft beer, that is doing well and is being given a fair opportunity to succeed.


Craft breweries and BMC make completely different beer. IPA's dont compete with light american lagers. I just don't buy this argument. The three tier systems helps the little guy, imagine if bud owned the liquor store\bar and the distributor, there would be no such thing as craft beer.

 

I have to add that my favorite bar at school has a happy hour special where all "Light Beers" are $2 for a 32 oz mug and everything else on tap is $3 for the same quantity. They carry a lot of local micro/craft brews on tap (legend brown ale from Richmond, VA, Starr Hill from Charlottesville, Highland from North Carolina and they carried some very local beers before it went out of business) as well as SNPA, a few taps of Sam Adams and others). Even Blue moon/Shocktop, BMC beers arguably trying to capture the more craft oriented crowd are $2 on happy hour.

I guess where I was going with this is that Zamial, I understand where you are coming from and I consider myself lucky not to have been affect by the dirty practices that you are describing in WI. I bet if similar things occured here I would probably change my tune. They kind of have back in the 90's when AB took over our local "Old Dominion Brewery" and pretty much killed all but their flagship and popular specialty brew.

But that is business...in ANY industry if you have money you are already better suited to succeed!

 

What about the whole, the Japanese car that I just bought was built in the USA. Is that just a marketing gimmick that the average Joe has bought into?

The same thing happened with BMC, marketing campaigns directed at the average Joe has ensured that he likes their cheap product, drunk for $6. Woo Hoo. Many people that I meet do not like change. Meat and potatoes was what I was raised on, I do not want to eat sushi, raw fish eecckkkk. Seems to be a lot of peoples rule to live by. Now light lager has become a staple for them they will never change.

Will a "buy local" grass roots campaign ever replace the current "save money" marketing that has taken the USA? I doubt it. Which is sad, I have finally reached the point in my life where I will spend a few extra bucks for better quality, sadly it is hard to find these days.

 

The one thing I don't understand in these arguments is the fact that InBev is inharrently evil for wanting to appeal to the craft crowd.

If BMC starts producing "quality" beers, then who looses?

 

Actually, people are pretty stupid. The majority is also so fiercely loyal to one brand of fizzy, yellow water that they are completely unwilling to ever try anything different. The big two brewing companies take advantage of that fact.

Your argument about the three-tiered system is pretty flimsy. AB-InBev doesn't own the bars. However, they control their own distribution. So, in a lot of places that only have two or three distributers, anywhere from 1/3 to 2/3 of all distributers only distribute AB-InBev products. This leaves, potentially, only one distributer for SabMillerCoors and independently owned breweries.

Thankfully, craft beer is growing despite the restrictions that are in place. However, one look at the current situation in Wisconsin demonstrates just how easy it is for the big two and their hordes of lobbyists to change the game.

 

So customer loyalty is a form of stupidity? I better stop ordering from Austin Homebrew then and stop shopping at my local homebrew shops. Majority of people don't like craft beer...its a fact and I don't see how that makes people stupid. Not to mention in times of any economic status, there are always people who can't afford to pay extra for craft beer, especially if they don't even prefer it over light beer.

I don't understand how the distributers are bad for having 1/3-2/3 only distribute a product that makes up over 90% of beer sales in the US.

What restrictions are in place that hold down the little breweries? Taxes are even tiered according to levels of production!

 

maybe it's more regional. I haven't seen a problem like that here. like I said at my local pub you wouldn't even know they served bmc unless you asked. and in the stores they have craft beers at one end off the aisle, so depending on which side you walk up to it from, it comes first. true there is more bud light an anything, but o live in a hic town, so it probably sells a lot better. I don't have a problem with how things go here ( at least everything seems pretty fair). sorry for those who do have these problems, my tune would be a little different if it was hard for me to get a good beer here.

 

I would actually be willing to say some craft brewers are more "evil" than BMC. Breweries like Rogue know they are in a specialty market and jack up the prices of thier beer. Don't get me wrong, I LOVE rogue beers a understand ingredients in their beers cost more than the rice/corn/adjuncts in BMC. I just feel that they far overprice thier beer because they know it is special. Dead guy was my gateway into craft beer, but in the last year prices have rose to $6 a bomber or $12 a six pack so I know they don't need to charge as much.

I get it, if I don't like than I should buy their beer any more. And sadly the only time I buy Rogue now is to get a fresh batch of pacman harvested and I still greatly enjoy shakespeare stouts, but there are many beers comparable or better in quality that are far cheaper.

Conversely BMC doesn't brew a beer and jack up the price because they know they are in a niche market...BMC actually helps a lot of the smaller breweries (ex Starr Hill) by taking over the bottling and distributing. Of course they make money off of this, but so does the craft brewer. Plus now those craft breweries can focus on producing beer by not having to worry about the bottling and distribution aspect of the business, yet they still get to provide jobs since bottling must be done in-house!

 

Sorry, I should have made it clear that people are stupid in general. It's not directly related to their taste in beer. My point was that there are people who are fiercely loyal to an inferior product because they either don't realize there is better out there or they don't care to look. I can't honestly blame the big brewers for exploiting that.

There are barriers to entry into the marketplace for small brewers. Mostly, this has to do with distribution, because an entire group of distributers that are only allowed to sell product owned by one company are out of bounds to small brewers. This system, as a whole, is antiquated and only still in place because of lobbying from big brewers. At the moment, these barriers to entry are not obstructing the growth of craft beer as a whole because there is a decline in sales for macro brews. So, right now, we don't have a huge problem. The problem arises in states like Wisconsin where a large brewer has lobbied the government into enacting regulations that hurt small breweries.

 

There is no thought required. I know people are stupid as a generalization. Where does our school system rank in the world again??? Please do not make me point out the idiocy that runs rampant because that would make an entirely new topic...

Most of the bars around here serve nothing but BMC. This is another generalization, yes there are fantastic bars around here but they are the exception.

Sure it does when you can see the equation. You address this in your statement above. The majority of beer drinkers drink BMC. When you look at population growth vs. growing craft beer sales the craft beer sales are still greater. Since it is pretty obvious that there is a HIGH demand for craft beer where do these people come from? The only place they could have which is from the BMC drinking populace. I have heard terms like "craft beer movement/revolution/renaissance" more in the last 5 years than ever before!

Motion 414 just made your statement void here, thanks to Miller/Coors but since it is not effecting you why should you care?

You are seriously #^*@$ kidding me here right? Every craft brewery in my state makes a light lager and BMC makes craft beer. Your beloved Michelob makes an IPA. The specific beer styles do not compete against each other the same style from different breweries do.