Are home brewers a "threat" to commercial brewing?

[Mike_kever_kombi]

If you look at the actual quotes, the only one to do with homebrewing is one that I think we can all say is very sensible, the idea that if you sell your beer you should need a license and follow health and safety standards. The article writer has no clue what they are writing about, I don't know where they get the idea that home brewers are a threat to craft breweries because McCormick never says that. The vast majority of actual information and quotes is about preventing big beer from screwing over craft brewers. If you look at the CCBA website, it's pretty much what you would expect to see, advocacy for craft breweries, PR for craft breweries in the state, etc. Not a trace of anything demeaning to say about home brewers.

I completely agree about licensing and health/quality standards, but if you really want to do the read the actual quote game, retread the article. He says that:

“It’s a change of night and day from eight years ago. They (legislators) didn’t know who we are and what we were. "

“There are stakeholders who would love to see those privileges eroded or taken away,” McCormick said.

Talking about the 3 tier distribution system, which most would agree with, but then....

In the last session, lawmakers tightened a state statute from the 1950s that allowed small brewers to hold an unlimited number of licenses to open taprooms and tasting rooms.

This is for sub 60k barrels annually, so a small/micro/craft brewer.

“We felt that putting some type of cap on these duplicate licenses was in the best interest of the industry,” McCormick said. “I really do feel strongly about that because allowing an unlimited number of tasting rooms across the state by a brewery could get out of hand in a number of ways.”

Yes, it might actually allow smaller volume Brewers to compete on a level playing field with the big guys, by not having to rely on a distributor (owned by the big guys) to distribute your products

McCormick said. The association also is looking to extend the duplicate license law to breweries that produce more than 60,000 barrels.

The Big Boys
Who's looking out for craft brew here?


This has nothing to do with protecting craft beer as much as it does with protecting interests.

If you think anything else...

the Golden State grew by 20 percent in volume last year and contributed $5.5 billion to the state’s economy


During the latest election cycle, $2.4 million poured into candidates for state offices from the beer, wine and spirits industry.

I am all for craftbeer, in general, and supporting local Brewers and small businesses as a whole. However let's face it, if you have a 100 Brewers making 1 million a year or 10 Brewers making 10 million a year, it's still 100 million annually no matter how you slice it.

The fault lies in misrepresentation, you are not really trying to get the million for the hundred, but the 10 million for the 10 that "contribute" to your organization.

Just because you put lipstick on a pig doesn't make it a prom queen.

 

[Phunhog]

If you read the whole article, they're concerned that home brewers could act like a craft brewery; home brewers in California can now give beer to a charity (and get a tax break for it) and give their beer out at festivals and competitions, they're concerned that home brewers might be able to use loopholes or push for new laws that might let them sell their beer tax-free. It's not so much that home brewers are edging in on craft brewer's market share, it's that they're concerned that homebrewers could become tax-free craft brewers; it's pretty poorly written by someone who obviously has no clue what is going on.

I found it interesting since I am pretty much "that guy". Of the just under 200 gallons I brewed this year almost half was donated to local charity events and sold for their benefit. It all started when friends/neighbors asked me to donate beer to their charity event after they were turned down by the local breweries. The local breweries get hit up pretty hard for beer donations and at some point they have to turn down requests. Understandable. So maybe the trade group is upset that home brewers are filling the void with donated beer rather than the charity groups buying their members beers? What gets me is the part of the law, that they wrote, where homebrew and commercial beer has to be seperated to "protect" the consumer. Gosh...that is something right out of the BMC playbook....I thought the craft beer industry was better than that.

 

[Spartan1979]

Gary Glass's newest presentations have been stating that the AHA is estimating that in 2016 the number of home brewers in America is going to surpass the number of craft breweries.

This doesn't sound right. From the AHA's website:

Over 1.2 million people brew their own beer at home in the United States.

I know there aren't that many breweries in the US.

 

[Homercidal]

This doesn't sound right. From the AHA's website:



I know there aren't that many breweries in the US.

Perhaps he meant that the amount of homebrewed beer is going to equal the amount of craft brewed beer?

 

[Hello]

My craft beer purchases in 2011 consisted of a 12 pack of fat tire every weekend and a few pints while out and about throughout the week. I started brewing and my first craft beer purchase was $80. Three weeks later I was back and it was $75. I have spent an exorbitant amount of money on craft beer since I started brewing. Some in trades, some in my belly, and some as gifts. The craft beer industry is 100% safe from me. My bank account, on the other hand, is not.

 

[bobeer]

That would be like saying cooking at home is a threat to the restaurant industry...and really just a silly statement in general.

This pretty much sums it up. No way are homebrewers affecting the commercial beer industry.

 

[Spartan1979]

Perhaps he meant that the amount of homebrewed beer is going to equal the amount of craft brewed beer?

Perhaps. That would make more sense, but would be pretty hard to quantify. I, for one, couldn't tell you how many gallons I brewed this year. It's well under the legal limit, but I don't keep track.

 

[biertourist]

As a "little guy" let me say, no I don't, thank you very much. I've seen how quickly the big boys will screw you if the law doesn't prevent them from doing so.

The big boys screw you because there's no such thing as a free market. The goal of becoming a big guy is so that you can start constraining and controlling the market; it's so that you can "capture" the market and keep it locked up.

A truly free market would be great for the little guy, if it actually existed. The problem is that it doesn't exist.

I agree with the underlying sentiment of your comment 100%, though. Laws need to prevent the big guys from "imprisoning" the market and making it not free so that small companies can compete freely upon their merits.


Adam

 

[sputnam]

I've started drinking MUCH more craft beer since I started homebrewing. I went from being primarily a whiskey and gin drinker with the occasional BMC product to going on a craft beer run literally every Friday, often another one Saturday, and during the week as well. I frequently order craft beer when I eat out as well, once or twice a week.



I'm the exact opposite. When I first discovered beer (good beer) I went to craft beer store every week. Once I learned how to make my own, I quit buying beer all together. I will still buy my 2 Goose Island BCS when they come out, and if I'm out somewhere, I will buy a beer or two (being out is RARE though). I have spent less than $20 on commercial beer over the last 13 months.

 

[soccerdad]

We are only a threat to the companies that make crappy beer

 

[soccerdad]

What gets me is the part of the law, that they wrote, where homebrew and commercial beer has to be seperated to "protect" the consumer. Gosh...that is something right out of the BMC playbook

More laws - that's what we need !
More regulation !
Controls in the marketplace !

 

[sputnam]

We are only a threat to the companies that make crappy beer

oddly enough, what you and I consider crappy beer most of 'Merica just loves. I chalk it up to ignorance; I too was ignorant just a little over a year ago.

 

[fsr_racer]

The big boys screw you because there's no such thing as a free market. The goal of becoming a big guy is so that you can start constraining and controlling the market; it's so that you can "capture" the market and keep it locked up.

A truly free market would be great for the little guy, if it actually existed. The problem is that it doesn't exist.

I agree with the underlying sentiment of your comment 100%, though. Laws need to prevent the big guys from "imprisoning" the market and making it not free so that small companies can compete freely upon their merits.


Adam

Laws do exist, however, they often do not keep large companies from buying out smaller companies, and it is the owners of those small companies who sell out. My first job at the last electronics company I worked for was making the product data sheets from the two smaller companies it had bought out match the existing template. Money talks and shareholders walk. I really wonder how many times a larger company, and I say company (MONEY), not brewery (QUALITY BEER), tried to buy out Stone, either to squash competition or obtain their recipes. They got PBR...

Honestly, and it may be the Hop Head Red with cold medicine talking (I hate head colds), we ARE a threat. There are close to 200k members on this site alone, and I bet many of you are members of other sites as well. That is a HUGE demographic, even for the big guys, enough to destroy the little guys if they produce a product that causes people to go blind, or worse. That is why we can't distill spirits, people got greedy and lives were destroyed. We are homebrewers, but we are on here (social media) talking. Social media has helped spark revolutions in foreign countries, though I doubt the Feds will be breaking down my door for the Rye IPA I have occupying my carboy.

I do believe we have power, but do we have enough to keep huge corporations from buying the votes they need to shut us down? IDK, I feel 10' tall & bulletproof at the moment and felt like ranting a little. Now I want tacos.:rockin:

 

[BreezyBrew]

Anyone can make food at home, but eating out is more popular than ever.

 

[Talgrath]

The big boys screw you because there's no such thing as a free market. The goal of becoming a big guy is so that you can start constraining and controlling the market; it's so that you can "capture" the market and keep it locked up.

A truly free market would be great for the little guy, if it actually existed. The problem is that it doesn't exist.

I agree with the underlying sentiment of your comment 100%, though. Laws need to prevent the big guys from "imprisoning" the market and making it not free so that small companies can compete freely upon their merits.


Adam

Ah, usually when someone talks "free market" they mean "no laws restricting trade or pollution".

 

[fuzzy2133]

They should be lobbying to get all the rights wineries have had for years on direct sales/shipping. But yes limiting big breweries from owning a distributor (sorry Stone) is a good start.

Hmmm this kinda of sounds like how music bands started their own labels to cut out the big guy from taking 75% of the sales...

 

[fsr_racer]

Here is another article to add to the mix:

http://www.aol.com/article/2014/11/20/black-market-craft-beer-is-bad-for-business/20996779/

Where is all this bad press coming from all of a sudden?

 

[Homercidal]

Here is another article to add to the mix:

http://www.aol.com/article/2014/11/20/black-market-craft-beer-is-bad-for-business/20996779/

Where is all this bad press coming from all of a sudden?

I don't see the problem. Scalping has been going on forever, not just in craft beer. It's impossible to prevent people from selling something rare or unique.

The article says that breweries and consumers are affected, but I don't see how. They brewery sells the beer for the price they ask. People are not forced to pay scalper prices if they don't want to.

What I don't like is that the article says that breweries are selling beer in secret online... But then the article says it's retailers who are selling....

Really, a very poor article. Seems to be written by a craft beer guy who had a deadline and no time to actually do much research.

 

[fsr_racer]

Ok, so by "Small Batch Brewers" they were referring to smaller professional breweries, not us, the home brewer.

 

[RmikeVT]

You know what threatens the craft beer market? Ridiculously high alcohol taxes, 3 tier distributions system that is primarily run by BMC, and legislation efforts that are backed by BMC to try and squeeze out the small guys through distribution and sales avenues. Any space that the craft brewer is able to leverage as an advantage the big breweries try to make illegal. Fortunately, the legislative momentum is in favor of craft breweries, right now. Let's hope it stays that way.

The original reason I started home brewing two years ago was that I couldn't walk out of a beer store with a a six back of craft beer for less than $10.00. Now, two years later, it is $12.50. That is more than 2 dollars a beer. 9% of the cost is a 6% sales tax and a 3% alcohol tax.

 

[ScrewyBrewer]

You know what threatens the craft beer market? Ridiculously high alcohol taxes, 3 tier distributions system that is primarily run by BMC, and legislation efforts that are backed by BMC to try and squeeze out the small guys through distribution and sales avenues. Any space that the craft brewer is able to leverage as an advantage the big breweries try to make illegal. Fortunately, the legislative momentum is in favor of craft breweries, right now. Let's hope it stays that way.

The original reason I started home brewing two years ago was that I couldn't walk out of a beer store with a a six back of craft beer for less than $10.00. Now, two years later, it is $12.50. That is more than 2 dollars a beer. 9% of the cost is a 6% sales tax and a 3% alcohol tax.

Then tack on the 25% markup the distributor gets before adding in the retailer's 25% markup and you can see why it pays to brew your own.

 

[RmikeVT]

Then tack on the 25% markup the distributor gets before adding in the retailer's 25% markup and you can see why it pays to brew your own.

And the ingrediant/material cost on one of my more expensive home brews is $0.45.

 

[andrewmaixner]

The original reason I started home brewing two years ago was that I couldn't walk out of a beer store with a a six back of craft beer for less than $10.00. Now, two years later, it is $12.50. That is more than 2 dollars a beer. 9% of the cost is a 6% sales tax and a 3% alcohol tax.

Hm, interesting. the premium craft stuff here is in that $12 range, with 'regular' craft at about $8. Iowa's beer tax is not terrible, thought the state's hidden liquor tax is 50%, and it must all be purchased/distributed through the state.
Regardless, makes homebrew worth it.

 

[noblesquirrel]

“I really do feel strongly about that because allowing an unlimited number of tasting rooms across the state by a brewery could get out of hand in a number of ways.”

Heaven forbid we let the free market dictate what the appropriate number of tasting rooms is.

Actually, this goes back to pre-prohibition. When tied houses were run by breweries, the only beer they were allowed was from that brewery. It became an anti-trust issue. Allowing breweries to open tap rooms all over the place is a problem, it would be bringing back the tied house concept and ultimately, AB Inbev or MillerCoors would start doing the same thing and pushing craft beer bars out of the market.

 

[dnslater]

The big boys screw you because there's no such thing as a free market. The goal of becoming a big guy is so that you can start constraining and controlling the market; it's so that you can "capture" the market and keep it locked up.

A truly free market would be great for the little guy, if it actually existed. The problem is that it doesn't exist.

I agree with the underlying sentiment of your comment 100%, though. Laws need to prevent the big guys from "imprisoning" the market and making it not free so that small companies can compete freely upon their merits.

Adam

I agree, as a small business owner we have never had a purely free market, and currently it is highly manipulated by the "big boys". They negotiate huge tax incentives from state/local governments, and have huge lobbying power and political connections, among other move obvious mechanical advantages over small business, such as negotiating power with suppliers, etc....

 

[Phunhog]

I agree, as a small business owner we have never had a purely free market, and currently it is highly manipulated by the "big boys". They negotiate huge tax incentives from state/local governments, and have huge lobbying power and political connections, among other move obvious mechanical advantages over small business, such as negotiating power with suppliers, etc....

This exists in the craft beer/homebrewing world as well. I know many of us are members of the American Homebrewers Assoc. (AHA) which is an offshoot of the Brewers Assoc. (BA). The BA of course represents the commercial side of craft beer and is where they get most of their funding. So I wonder how much lobbying the AHA would do if/when homebrewing threatens (real or perceived) commercial brewing? I have a dream, maybe unrealistic, that someday homebrewers will be able to sell our beer in some capacity other than full-scale pro brewing. I would equate this to Cottage Food Laws that in place various parts of the country. CA has taken a small step towards this in that we can donate homebrew to a charity event and they can sell it with some pretty heavy restrictions put into place by the craft beer lobbyists/industry.

 

[WI_Wino]

Actually, this goes back to pre-prohibition. When tied houses were run by breweries, the only beer they were allowed was from that brewery. It became an anti-trust issue. Allowing breweries to open tap rooms all over the place is a problem, it would be bringing back the tied house concept and ultimately, AB Inbev or MillerCoors would start doing the same thing and pushing craft beer bars out of the market.

Yep, it may have a place back then but today's world is much different. The flow of information is nearly instant. Targeted advertising is "cheap". No need for onerous regulations like this.

 

[MaxStout]

To see how antiquated some liquor laws are, take a look at the politics surrounding that in Minnesota. We are one of only about a dozen states that still prohibits alcohol sales on Sunday (with the exception of 3.2 beer). Every year for the past several, legislation is proposed to change it, but the bills fail, due in large part to intense lobbying by the Minnesota Licensed Beverage Association, the trade group representing most of the state's liquor stores.

So why would liquor stores be opposed to being open for business on Sundays? The MLBA argument: the "overhead" costs of being open a seventh day each week. But when it is pointed out that stores could choose to not be open Sunday (no one's putting a gun to their heads), their response is that other stores that stay open Sundays would be more competitive than the ones choosing to stay closed a day. Which highlights the trade group's paradoxical argument.

Either choose to be open that day or lose potential business to the guy down the street.

The defeat of the last Sunday liquor bill was helped along by lobbying resistance by the union for delivery truck drivers. They claimed that Sunday sales would force their members to work an extra day. But that argument can be easily debunked, as most stores receive their weekend orders well before the weekend.

There are a few stores here that support Sunday sales, and they pushed hard to get the change.

We had to fight tooth, fang and claw just to get legislation passed a few years ago allowing breweries to sell beer on the premises, the so-called Surly bill.

BTW, it is worth noting that Minnesota is the state that brought us Prohibition in 1920. Restricting alcoholic beverages seems to be woven into our fabric here.

 

[unionrdr]

Yeah, it actually spread state to state, thanks to suffrage. Dang women's movements at the time knew not what they did...

 

[Zepth]

My earlier days drinking beer started off with the various "buck a beer" brands. Yellow lager and nothing special red. On occasion if I was feeling fancy I'd get a premium $36 / 24 sampler featuring different red and something dark. High class I know. I would not understand these craft brands at $2+ per bottle and usually rule them out for price alone.

Move forward a couple years and I'm at least trying new things on the market. Most often while out somewhere and paying $8 for craft pints instead of $5 domestic. Eye opener for me. Still couldn't warrant the comparatively high price for at home.

Little later and I start homebrew. Those nice little canned kits. Easy, short/no boil, and an acceptable product at the end of the day about $0.50 each. What's not to love? Then read things like HBT and decide to experiment with adding a touch of hops to the mix. We all know the homebrew path from there.

Now I almost exclusively purchase craft beer. Often a brewery-du-jour sampler pack, sometimes a handful of individual bottles. Trying not only different brands of style X, but giving styles Y and Z fair opportunity now. Previously I never would have looked at the craft section and went right to the popular discount brands. They've received my undivided commercial business for almost a year now. Safe to say I'm not jeopardizing their market share.