Beer Wars

[meddin]

I don't. This doesn't make any sense to me at all. I don't see what your point is or what you are trying to get at.

Jeremy

Me either...

 

[mullenite]

Why shouldn't a brewery be able to do the same?

Because a brewery is not a clothing line, there are many other considerations besides distribution that differentiate the two.

If I wanted to start a brewery as a home based business why can't I?

You could, it would be similar to the same process as starting a restaurant as a home based business. You would have to apply for zoning changes, provide adequate facilities and pass the various inspections. It has been done before; albeit primarily in states that allow self distribution.

If I wanted to start a brewery be selling to friends and family and growing by word of mouth, why can't I? I do I have to go from nothing to playing in the big leauges immediately?

Essentially this is what you do, distribution contracts are not all or nothing. The local brewery here in town for example started at one account, then two, then three and so on. Now they can be found in pretty much all of the decent, and half way decent, bars in town. When they are not sold out of their products.

I don't. This doesn't make any sense to me at all. I don't see what your point is or what you are trying to get at.

Jeremy

Let me set up an example here. Let's say I wanted to start a microbrewery (not a nanobrewery... a microbrewery.) I go out and a find the space, a nice commercial/industrial warehouse space. I buy a 15bbl brew house, 4 15bbl fermenters and bright tanks and start building. Eventually I am ready for market and hire a small staff, maybe one or two other people. We keg 10bbl of each batch and bottle the remaining 5.

Now, lets say I am in a state that allows self distribution. I have two options. I can buy a LARGE refrigerated truck and have one of my employees a dedicated sales/delivery person (this means going to each account once or twice a week for orders and once or twice a week for deliveries.) Alternatively I can work with a local distributor, preferably one who has a good reputation for craft beer and they can do that leg work for me. I can then have dedicated help in the brewery for things like cleaning, tours, sampling, etc.

But for the sake of this example lets say I go the self distribution route. A year passes and there is demand for my beer in other markets, including markets several hours away and in other states. Now my options become expanding my self-distribution network two interstate commerce (which requires a much different set of legalities when compared to intrastate) or going with another distributor. I choose to go with another distributor at this point.

I am now a part of the three tier system, and chances are my distributor will be tied with either ABI or MillerCoors. The three tier system, and in a way, BMC, have now expanded the beer selection for people in another market.
--------------------
Without the local ABI distributor I would not be able to get Victory or Southern Tier, without the MillerCoors distributor I would not be able to get Avery, Dogfish Head, Lagunitas, etc. The three tier system has made beer in North Florida tolerable and has given, at least this city, enough knowledge to support a brewery.

Do I think breweries should have a choice? Absolutely. However, when comments like this come up:

They're lobbying aggressively to maintain the three tier system that reduces the amount of choices available to consumers at retail by crowding out competitors.

An accurate representation of the facts should be given. The three tier system helps brewers, large and small, get in to markets they would not otherwise feasibly get in to, and as a direct result, grow.


BTW, ABI and MillerCoors each belong to two brewing lobby groups. One of which is the Brewers Association. In fact, they pay BA dues for EACH of their breweries and for the Craft Brewers Alliance (Widmer, Redhook, Kona, Goose Island) locations seperately. So just as strong as the "big brewer" lobby is in one direction, they support the people who lobby in the other direction as well.



Crack open a Bourbon County Stout and toast it to the company that made it possible for you to drink it outside of Chicago... AB-InBev.

 

[uechikid]

I just watch this movie. I felt it was very informative. The only thing I didn't like was the three tier distribution law in this country. As far as some of the practices that determine how much space an item gets and where it is on the shelf...money talks. And that goes for all categories, not just beer. I just retired from the grocery business after 35 years. 30 years on night crew. So many time I would see a reset and just shake my head wondering how a small company could pay prime shelf space. That's right pay for... You want the best placement in a section, you pay for it. Every quarter. Pure profit for the retailers.
Like I said, Over all I liked the movie.

 

[Bru]

This may be a bit off topic slightly - I havn't seen Beer Wars yet but SAB has long been critisised for being anti-competitive and monopolistic, hence the total lack of beer culture in SA. They're currently involved in a spat with our Competitions Tribunal for anticompetitive behaviour.

 

[hal2814]

...
Now, lets say I am in a state that allows self distribution. I have two options. I can buy a LARGE refrigerated truck and have one of my employees a dedicated sales/delivery person (this means going to each account once or twice a week for orders and once or twice a week for deliveries.) Alternatively I can work with a local distributor, preferably one who has a good reputation for craft beer and they can do that leg work for me. I can then have dedicated help in the brewery for things like cleaning, tours, sampling, etc.
...

Yeah, and if you live in a state without self distribution, you have one option. And suppose you do all that setup work and the distributor won't give you the time of day because they're busy catering to the companies that comprise the large bulk of their sales? Or worse yet, suppose they take you on for distribution and then twist the arms of bars and restaurants to get them to buy products from their larger breweries instead? (I've seen the that happen at a restaurant I used to work at back when Marthasville's brewery first opened up in Atlanta.) So then you have all this product you're pushing out to a distributor who's doing their best to help out other breweries instead (and kneecapping you in the process). I don't mind a 3-tier setup as long as it's not legally mandated. Sometimes if you want a product to get out there, you have to get it out there yourself. And that's really tough to do when the getting-it-out-there-yourself part is illegal.

 

[jacksonbrown]

It's not a documentary. Documentaries are where all sides are represented and facts (and sometimes myths and half-truths) are presented and debated.

I don't know where you're getting your definition of documentary from, but they don't have to be fair and balanced. So long as they're presenting facts they're doing their job. Many documentaries are very one-sided and are out there to make a point. Nothing more.

 

[RenoDean]

The moonshot lady brought the movie down. Horrible idea for a beer. Why did she leave Sam Adams? There has to be more to that sotry, you just don't leave a company like that after 15 years to sell a gimmicky product.

 

[jjones17]

Can you explain how it was "pure propaganda?" That's exactly the type of stupid statement that you're criticizing this movie for.

You, along with a lot of other people, need to learn how to properly view or read sources. You're exactly the type of person who probably whined and screamed about fahrenheit 911. Documentaries are supposed to be factually accurate, yet OHMYGOD, sometimes they don't present all the facts. I can't think of a documentary I've seen in the last five years besides a nature show that wasn't trying to persuade.

When you have an agenda, you have a bias, but I really hate that term because it is used to devalue and discredit constantly. If we threw out anything that's biased, we'd throw out practically every primary source document in existence, and the profession of historian would cease to exist.

It's up to viewers to question. Another perfect illustration of this flawed approach is wikipedia. Because it's not perfect, should we throw it away? Read responsibly, goddamnit.

When you boil it down, AB is an aggressive corporation that is totally hostile to anyone who could be a potential competitor, even if that potential is pitifully low. While Beer Wars certainly was biased, there is definitely more than an element of truth to the movie.

Well said! People want the best of all worlds, unless what they are getting was their own idea. People are dumb, by nature, and I am not saying I am exempt from that. Anyway, kudos. Go documentaries!

 

[mullenite]

Yeah, and if you live in a state without self distribution, you have one option. And suppose you do all that setup work and the distributor won't give you the time of day because they're busy catering to the companies that comprise the large bulk of their sales? Or worse yet, suppose they take you on for distribution and then twist the arms of bars and restaurants to get them to buy products from their larger breweries instead? (I've seen the that happen at a restaurant I used to work at back when Marthasville's brewery first opened up in Atlanta.) So then you have all this product you're pushing out to a distributor who's doing their best to help out other breweries instead (and kneecapping you in the process). I don't mind a 3-tier setup as long as it's not legally mandated. Sometimes if you want a product to get out there, you have to get it out there yourself. And that's really tough to do when the getting-it-out-there-yourself part is illegal.

So you find a different distributor, even here in this small town we have 5 distributors who work in the area, all of them carry craft brands and two of them ONLY carry craft brands. If you make a good product and work to get your name out there you can be successful.

Cigar City in Tampa is a good example, they have been open for just about a year and have had to add a 30bbl fermenter and will be adding more shortly. They started off with 3 employees and a 15bbl system. They got there name out there by making an excellent product and the three tier system helped them get their beers in to the Orlando, Gainesville and Jacksonville markets which increased their sales and allowed further expansion.

Swamp Head here in Gainseville has only been open since November of 09 and are already getting close to maxing out their 10bbl system. They recently expanded in to the rest of North and Central Florida by way of the three-tier system. They can now send beers 150 (or more) miles away and still only have two full time employees, the owner and the brewer.

The system has allowed these two breweries to grow at a rate that self-distribution would not allow them.

Don't get me wrong, I'm all for breweries being allowed to self-distribute. I do however feel that it is necessary to have, and use, dedicated distributors. Wouldn't you rather breweries focus on the beer and not on delivering it?

 

[jjones17]

I don't know where you're getting your definition of documentary from, but they don't have to be fair and balanced. So long as they're presenting facts they're doing their job. Many documentaries are very one-sided and are out there to make a point. Nothing more.

Yeah, pretty sure people just make up what they think it means to suit their own opinions. I looked it up...

Documentary:
1. Consisting of, concerning, or based on documents.
2. Presenting facts objectively without editorializing or inserting fictional matter, as in a book or film.

Ok soooooo... 1 does not apply here, but 2? Check. No fictional matter there at all, unless expressly stated. So I am pretty sure we can all agree this was a documentary?

 

[NorCalAngler]

Yeah, pretty sure people just make up what they think it means to suit their own opinions. I looked it up...

Documentary:
1. Consisting of, concerning, or based on documents.
2. Presenting facts objectively without editorializing or inserting fictional matter, as in a book or film.

Ok soooooo... 1 does not apply here, but 2? Check. No fictional matter there at all, unless expressly stated. So I am pretty sure we can all agree this was a documentary?

You only commented on "fictional matter" to support your claim this is a documentary. I called it a documentary in my previous post, but according to this definition I would have to rename it as a propaganda piece against BMC and the three tier distribution system. This is far from objective and there is plenty of editorializing.

 

[jjones17]

You only commented on "fictional matter" to support your claim this is a documentary. I called it a documentary in my previous post, but according to this definition I would have to rename it as a propaganda piece against BMC and the three tier distribution system. This is far from objective and there is plenty of editorializing.

I knew someone would take the bait on my lack of analysis on the 'OBJECTIVELY' part of the definition, but I was just too lazy to bother. So, since you prodded me:

Objective:
1.undistorted by emotion or personal bias; based on observable phenomena; "an objective appraisal"; "objective evidence"

I would say the the movie contained observable phenomena, which was in no way 'distorted'. The fact that they simply showed DFH's perspective on the lawsuit is open to emotional interrepretation, but is not distorting the facts. If someone were moved by the 'emotional account of the so-called victims', in such a way their opinion is swayed and they are blinded by the facts, that would be the viewers emotional weakness (my opinion), not a distorition of the facts. They could have done a documentary from AB's perspective, and opinions would still form for, and against, AB's decision to sue DFH.
Anyway, my point was about if this movie was/was not a documentary, and based on the dictionary it does appear to be one. Plenty of facts, has come emotional content but it did not have a lack of factual content either. Meh.

 

[NYCHomebrewer]

I don't think there is anything inherently wrong with a three tier system. If it works well, then it can expand distribution and provide more beer choices to customers. In order for the system to work, if the three tier system is mandated by law, the three tiers have to be truly independent. When they aren't anticompetitive practices occur and you and I, the end users, end up with fewer choices.

Craft brewers like Sam Caligione aren't afraid of competition, in fact, they welcome it. The problem arises when huge companies wielding awsome amounts of power and money abuse the system, and I think Beer Wars provided many good examples of exactly that happening.

I respect property law and a legal system that protects intellectual property rights is hugely important; but the legal system can also be abused. Look at the patent trolls, the RIAA etc.

I thought Beer Wars showed pretty clearly a lot of the anticompetitive activities of the BMC. From frivolous lawsuits over the words "punkin" or "monster", in which the BMC win even when they lose simply by causing small microbreweries to have to expend huge amounts in legal fees just to defend themselves, to providing free kegs of beer to restaurants provided the restaurant doesn't stock "that other caffeine beer."

That is not competition. That is pure sleaze. And it happens all the time. The antitrust laws are in place specifically to prevent this kind of activity.

Do you think it should be legal for Miller to go around to all the bars stocking your favorite microbrew and provide them free kegs of beer until your microbrewery is driven out of business? They have the kind of money that they could and probably would do it if they could get away with it.

The three tier system is the same way. If the BMC didn't see themselves getting an advantage out of it, they wouldn't support it. They don't care about you or I getting a good selection of beer. If they had their way, we would only have the choice between Bud and Bud. They support the three tier system because, in general, the distributors are beholden to them and make sure their products get sold first and in the best slots.

So long as breweries are required by law to sell through a distributor, BMC is going to dominate the markets - and its not because they sell a superior product.

 

[NorCalAngler]

I knew someone would take the bait on my lack of analysis on the 'OBJECTIVELY' part of the definition, but I was just too lazy to bother.

I never saw it coming... you are a master baiter.

 

[billvon]

So long as breweries are required by law to sell through a distributor, BMC is going to dominate the markets - and its not because they sell a superior product.

Many people here don't like BMC, but the reason they sell so much beer is that a lot of other people do like them. To a lot of people Bud et al really are superior - and yes, that's even when they try beers we consider better. Fortunately there's room for all tastes.

 

[NYCHomebrewer]

I'm not leveling a judgment on the quality of BMC's beer. I have been known to hoist a few in the summer out on the water. My point is that the quality doesn't matter.

Yes, part of their dominance of the market stems from the fact that they make a product that appeals to a broad variety of people. But part of their continued dominance arises because of their (1) subversion of the three tier system, (2) unfair trade practices, (3) lawsuits that result in their winning even if they lose, and (4) money and power.

The three tier system would be fair if it were a level playing field, but in reality it is corrupt and slanted heavily in BMC's favor. Lets face it, if you are a distributor and Budweiser tells you that if you don't stop promoting Dogfish Head they are going to pull their products and all their related products and go exclusively with another distributor, you are going to cancel Dogfish Head's account or go out of business.

 

[1972Buick455]

I don't think there is anything inherently wrong with a three tier system. If it works well, then it can expand distribution and provide more beer choices to customers. In order for the system to work, if the three tier system is mandated by law, the three tiers have to be truly independent. When they aren't anticompetitive practices occur and you and I, the end users, end up with fewer choices.

Craft brewers like Sam Caligione aren't afraid of competition, in fact, they welcome it. The problem arises when huge companies wielding awsome amounts of power and money abuse the system, and I think Beer Wars provided many good examples of exactly that happening.

I respect property law and a legal system that protects intellectual property rights is hugely important; but the legal system can also be abused. Look at the patent trolls, the RIAA etc.

I thought Beer Wars showed pretty clearly a lot of the anticompetitive activities of the BMC. From frivolous lawsuits over the words "punkin" or "monster", in which the BMC win even when they lose simply by causing small microbreweries to have to expend huge amounts in legal fees just to defend themselves, to providing free kegs of beer to restaurants provided the restaurant doesn't stock "that other caffeine beer."

That is not competition. That is pure sleaze. And it happens all the time. The antitrust laws are in place specifically to prevent this kind of activity.

Do you think it should be legal for Miller to go around to all the bars stocking your favorite microbrew and provide them free kegs of beer until your microbrewery is driven out of business? They have the kind of money that they could and probably would do it if they could get away with it.

The three tier system is the same way. If the BMC didn't see themselves getting an advantage out of it, they wouldn't support it. They don't care about you or I getting a good selection of beer. If they had their way, we would only have the choice between Bud and Bud. They support the three tier system because, in general, the distributors are beholden to them and make sure their products get sold first and in the best slots.

So long as breweries are required by law to sell through a distributor, BMC is going to dominate the markets - and its not because they sell a superior product.

Well said my friend and probably better than I could have. I like the conclusion, yep far from "superior".

Here's a thought, some of the members on this forum seem to be AB or big beer employees the way they rush to defend what I think is at best an unfair system, and portrayed fairly accurately by the film. Is that accurate, are you naysayers just supporting your companies misaligned perspective?? Don't think we will get feed back on that...

Also, I didn't think there was a ton of whining or complaining, just talk about a broken system. BTW I shop at Wal-mart and I do drink cheap beer once in a while, I'm not a hippie in Boulder CO and I am a 22 year service member. That having been said I don't like what the big beer companies are doing. Its not fair and does not support FREEDOM. That's what this country stands for and this system is not supporting free trade.