Beer Sales being Pulled from Ebay

[daksin]

Caveat emptor!

Doesn't apply here except that the buyers may get screwed on the ebay purchase.

The problem is that the scalpers are causing real harm to the brewery; twice, potentially: first by preventing real fans (local patrons) from enjoying that beer, and secondly by reselling damaged (improperly stored) beer which will hurt the brewery's reputation.

 

[lunchbox]

Good. Why shouldn't they? It's already against their policy to sell alcohol- there's no age verification. Besides, it's another way customers can get screwed- either they end up with subpar beer that hasn't been stored or handled properly, or the end up with an empty bottle, which is how the ads are typically phrased. Support your favorite craft breweries by buying directly from them or the distribution channels they authorize. If a beer is hard to get, tough. Chances are your local brewery makes hard to get beers other people can't get. Try to grab a bottle the next time you're in the area.

No free market?
If someone wants to spend $50 on a Russian River bomber, who cares? Russian River isn't going to make any less on it.

 

[lunchbox]

If I owned a brewery I wouldn't want some hijack off buying a bunch of my beer and selling it online. That takes all control out if your hands and this yahoo is making money off your your name. When buying online you don't even know that the bottle you are purchasing actually contains the beer it's supposed too! Bottom line, the brewery has its reputation on the line based off of how well their beer shows, someone hordes a bunch and keeps it in their driveway for two months trying to sell it by the time you taste it the beer will be crap and you'll think the brewery sucks...

The same argument could be made for used cars, should we ban used cars sales, for the sake of GM of course...

 

[eastoak]

If I owned a brewery I wouldn't want some hijack off buying a bunch of my beer and selling it online. That takes all control out if your hands and this yahoo is making money off your your name. When buying online you don't even know that the bottle you are purchasing actually contains the beer it's supposed too! Bottom line, the brewery has its reputation on the line based off of how well their beer shows, someone hordes a bunch and keeps it in their driveway for two months trying to sell it by the time you taste it the beer will be crap and you'll think the brewery sucks...

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.

 

[mattd2]

What about this for thought. It comes up on here all the time...
"What if I do this or that and person A pays me $50, and then I give them some homebrew as a gift" <- Always gets shot down as illegally selling homebrew (and rightly so)
So then what if
"I bottle my homebrew and then put it on ebay to sell the special (because there is only one ever of this exact bottle) beer bottle, I must leave the beer in it otherwise it would not be a beer bottle and just an ordanary everyday bottle" <- as one of the BMCs of New Zealand says, Yeah right!
Only difference between this and the above is the liquor tax has already been paid by the brewery.

 

[Phunhog]

I know there are Ebay approved wine brokers....maybe there is a market for the same thing for beer? A business opportunity for someone!! Of course they are fully licensed and adhere to the alcohol laws.

 

[lunchbox]

I know there are Ebay approved wine brokers....maybe there is a market for the same thing for beer? A business opportunity for someone!! Of course they are fully licensed and adhere to the alcohol laws.

Just don't try to advertise here you capitalist pig!!!

 

[zeg]

The only legitimate problem here is that the sales are not permitted (neither by law, nor by ebay policy).

There is simply no legitimate basis for the manufacturer to prevent subsequent sales of its product by a retail purchaser. Yes, obviously it's in their interest to protect their brand identity, but that's just not how selling something works. If they want to enforce something like this, they need to arrange a contract in advance. This is what they do with distributors, and why they have control over the terms of distribution. If the sale is legally permitted, they are no longer party to the transaction.

The only valid exception I can think of would be if someone is misrepresenting the contents of the bottle. In that case, it could be a trademark violation.

Note that there have been some absurd laws/court decisions involving importation of copyrighted works into the US---IIRC, a high end watch maker successfully blocked grey market imports on the basis that their logo was copyrighted and copyright conventions gave them legal control over the import market. This is, IMO, plainly absurd, and in any case doesn't affect domestic sales.

 

[TimpanogosSlim]

The only legitimate problem here is that the sales are not permitted (neither by law, nor by ebay policy).

There is simply no legitimate basis for the manufacturer to prevent subsequent sales of its product by a retail purchaser. Yes, obviously it's in their interest to protect their brand identity, but that's just not how selling something works. If they want to enforce something like this, they need to arrange a contract in advance. This is what they do with distributors, and why they have control over the terms of distribution. If the sale is legally permitted, they are no longer party to the transaction.

The only valid exception I can think of would be if someone is misrepresenting the contents of the bottle. In that case, it could be a trademark violation.

Note that there have been some absurd laws/court decisions involving importation of copyrighted works into the US---IIRC, a high end watch maker successfully blocked grey market imports on the basis that their logo was copyrighted and copyright conventions gave them legal control over the import market. This is, IMO, plainly absurd, and in any case doesn't affect domestic sales.

You mean Rolex vs. Costco?

Costco had purchased a bunch of rolexes at good prices from licensed dealers outside of the USA and wanted to import them and sell them in Costco stores at a modest profit. They owned the watches outright. Rolex was able to seize them because Costco is not a licensee of the Rolex name and logo.

Rolex jumps through a lot of hoops to control their brand as tightly as possible and charge you thousands of dollars for a watch that would be worth about $800 without their name on it.

One of those hoops is that the USA version of Rolex is actually a company that licenses the rights to the logo and other marketing IP in the USA from the swiss company.

All the same people are on the board of directors of both companies.

If you own a rolex and leave the country with it, you damn well better fill out the paperwork proving that you own it before you leave the country, because Rolex can have it seized at the border when you re-enter.

 

[mlg5039]

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.

 

[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) = &#960;
Adam prefers $&#960; to Beer
Bob prefers Beer to $P1, so both are made better off by the transaction.

The question is, as &#960; grows considerably, how does the Brewery extract more &#960; from Adam, and what are the Brewery's property rights concerning &#960;?