Sam Adams to lose craft beer status

[BendBrewer]

AB

As of 2008, it has 48.9% share of beer sales in the United States (by barrels), and produces about 11 billion bottles of beer a year.

 

[Ichthy]

Saw that, didn't want to figure the math for 11 billion bottles to barrels...

 

[weirdboy]

How many barrels do the big 3 brew in a year? I couldn't find it. My guess is 2 million bbl. is a drop in the bucket relative to BMC?

It is a drop in the bucket. A-B broke 100 million barrels over 10 years ago.

 

[weirdboy]

Saw that, didn't want to figure the math for 11 billion bottles to barrels...

According to my quick math, assuming 12oz bottles that is 399,193,548 bbl.

EDIT: not sure that's right

 

[Ichthy]

It is a drop in the bucket. A-B broke 100 million barrels over 10 years ago.

Back on topic, kind of, what's wrong with extending a tax break to someone who brews up to 6 mil bbl/year? They still have to compete with AB, and they aren't even brewing at a tenth of ABs capacity.

 

[JJL]

I have to agree with Bendbrewer. It's the fact that they are publicly traded that really gets me. They can label themselves whatever they want, but from a competitive standpoint to let them play in the same pool as small privately held breweries just doesn't seem right.

 

[DKershner]

How many barrels do the big 3 brew in a year? I couldn't find it. My guess is 2 million bbl. is a drop in the bucket relative to BMC?

BMCP did a combined 210M barrels in 2008. They haven't been growing much over the past few years.

This is just US data, not worldwide.

 

[dap325]

SA just wants the name "Craft Brewer" plus as much $$ from sales as he can get. I very much appreciate they work that they have done in bringing quality beer into people's lives, but it does seem that they want to sell more beer without appearing to be a big brewer.

I agree with them wanting to seem like a small brewer. Their newest commercials stress the fact that they produce "less than one percent of the entire US beer market". 2 million BBLs a year is an awful lot of production to still want the same benefits as some of the smaller "craft" brewers around.

 

[BeerWars]

This is how you know they are not a craft brewer anymore:

"Hoping to maintain that status and keep their low excise tax, Koch went to Washington where Massachusetts Senator John Kerry and Idaho Senator Micahel D. Crapo are fighting for a bill they introduced six months ago that increases the yearly production limit on "craft" breweries from two million to six million barrels."

Lobbying Senetors to change laws when it only benefits them, is a very BMC thing to do.

Next thing they are going to do is contribute money to the Partnership for a Drug-Free America.

 

[r_flagg]

Wait, the designation for craft brewer is 2,000,000 liters or 50,000 barrels, not 2,000,000 barrels! Source Considering they came up with that in the 80s, maybe it is time to up it to 6,000,000 liters.

 

[Strave19]

SA should not get the same breaks a small-time breweries. They are huge, they are publicly traded, they are mass marketed, and they are lobbying for legislation that will only effect them. It may effect other "craft" breweries in the future, but isnt that the way it should be if a company becomes that huge and is making that much money? Just because their beer doesn't suck as bad as BMC doesn't make them "small time craft". I think its great that they helped to pioneer "craft" brewing, but they are raking in plenty of $$$ now, and they just want to make more. They are making money off the marketability of being "small scale craft beer".....ironically this is "small scale craft beer" that you can find in nearly every grocery store and at every bar in the country... Sorry SA, but you are BMC junior as far as I'm concerned... Time to pay up if you're going to keep chasing the dollar. Good thing I've never been a huge fan or your beer.

 

[JJL]

Wait, the designation for craft brewer is 2,000,000 liters or 50,000 barrels, not 2,000,000 barrels! Source Considering they came up with that in the 80s, maybe it is time to up it to 6,000,000 liters.

The articles I've been reading say barrels.

 

[r_flagg]

While I agree that SA should not get the same break, I do feel that old standards need to be updated. It has been 20-some years since the craft brewery designation was created in the US. Perhaps the whole structure should be revamped where local microbrews pay the least, regional/semi-national breweries like Dogfish Head pay a bit more, and companies like SA pay the most (besides BMC of course). Up the amount of barrels they can produce, because I still don't think that 150,000 barrels a year is on par with BMC, but is still triple the current amount of what is considered a craft brewery.

EDIT: Nevermind, my numbers are wrong. Still, maybe the tier system would be better.

 

[r_flagg]

The articles I've been reading say barrels.

You are correct sir! My mistake. Disregard my numbers.

 

[JJL]

While I agree that SA should not get the same break, I do feel that old standards need to be updated. It has been 20-some years since the craft brewery designation was created in the US. Perhaps the whole structure should be revamped where local microbrews pay the least, regional/semi-national breweries like Dogfish Head pay a bit more, and companies like SA pay the most (besides BMC of course). Up the amount of barrels they can produce, because I still don't think that 150,000 barrels a year is on par with BMC, but is still triple the current amount of what is considered a craft brewery.

This is something I could reasonably get behind. We were discussing earlier in the thread what breweries besides SA would be impacted by the change to the 2MM barrel hurdle. We couldn't come up with any. Nothing even close. Although, the current law appears to protect truly small craft brewers. The first hurdle in the tax code is 60k barrels. The new bill actually proposes a reduction in the tax from $7 to $3.50 per barrel for the first 60k barrels produced. So, in effect they are taking some steps to revamp the system.

Really though, if they are going to truly revamp the system, there needs to be a tier somewhere between 60k and 2MM barrels, and possibly something below 60k, like 5k or 10k. You could increase the 2MM barrel mark to 25MM and you would still only be impacting SA.

 

[shanecb]

I don't see why we have to use the term "craft beer" in the sense that we are. Regardless of the size of Sam Adams I'd still call it craft beer, but not a "microbrewery". I think microbrewery/macrobrewery should be the size designations, with craft brewery not having anything to do with size. I don't see any reason there can't be a very large, very successful craft brewery. Craft to me is more about quality, attention, process, etc., and not about amount of output.

 

[motobrewer]

goose island is publicly traded. so is kona.

 

[uwjester]

Why is Sam Adams opposed to being in the same category as BMC? I seems to me that they could spin that just as well as they could spin the "We're just a little, harmless, craft brewery." bit. I say lump them with BMC and let them bring up the perceived quality of American Beer.

As for the taxes, if they can lower them, then good for SA. Also good for BMC though. That 2M barrel ceiling has been giving SA a small advantage over BMC for a while now. If they have to pay the additional tax, we'll see how much momentum the American demand for better beer really has.

 

[a10t2]

Well said, shanecb. Couldn't agree more.

We were discussing earlier in the thread what breweries besides SA would be impacted by the change to the 2MM barrel hurdle. We couldn't come up with any. Nothing even close.

Actually Yuengling produces 2 million: http://www.yuengling.com/n_yuengling_180_anniversary.htm

BBC currently produces ~1.4 million, so they won't be affected for several years.

 

[beerchemist]

yeah, Yuengling, which is still family-owned, is just around the 2-million barrel mark:

http://www.yuengling.com/n_yuengling_180_anniversary.htm

 

[Ichthy]

As for the taxes, if they can lower them, then good for SA. Also good for BMC though. That 2M barrel ceiling has been giving SA a small advantage over BMC for a while now. If they have to pay the additional tax, we'll see how much momentum the American demand for better beer really has.

Exactly what I was attempting to get at. This whole thing seems like a good deal for craft beer. Any non-BMC brewery needs some help if they want to compete with the big guys.

 

[a10t2]

That 2M barrel ceiling has been giving SA a small advantage over BMC for a while now.

AB pays about $17.99 a barrel in federal taxes, and BBC pays about $17.51. It isn't nothing, but I doubt it makes a difference to their bottom line. Hence the desire for a reduction in taxes between 60,000 and 2,000,000 barrels.

edit: It's actually a difference of 0.3% in their FY2009 profits.

 

[Starderup]

Some interesting replies.
It seems everyone is in agreement that SA is no longer a 'craft' brewery. Still, it doesn't seem fair to hold them to the same standards as AB. Maybe a sliding scale based on the number of barrels produced a year?
For example, I would hate to see Sweetwater (currently 49,000 bpy) get penalized when they quadruple their output based solely because a lot more people got tired of drinking crap.
Discuss.

 

[r_flagg]

This is something I could reasonably get behind. We were discussing earlier in the thread what breweries besides SA would be impacted by the change to the 2MM barrel hurdle. We couldn't come up with any. Nothing even close. Although, the current law appears to protect truly small craft brewers. The first hurdle in the tax code is 60k barrels. The new bill actually proposes a reduction in the tax from $7 to $3.50 per barrel for the first 60k barrels produced. So, in effect they are taking some steps to revamp the system.

Really though, if they are going to truly revamp the system, there needs to be a tier somewhere between 60k and 2MM barrels, and possibly something below 60k, like 5k or 10k. You could increase the 2MM barrel mark to 25MM and you would still only be impacting SA.

Absolutely. These aren't the good old days. There are tons of breweries out there of all different sizes and a reduction by 50% would seriously help the little guys out. Does anyone have the figures on Anheuser-Busch's annual production? I mean, it must be nearing the billions right? More barrels than OPEC? There's no way SA could ever be in that league, so why not give them their own tier to stretch out in?

 

[SkiSoloII]

Publically traded or not, larger than many "craft-brewers" or not, SA still has the mindset of the smaller brewer.

How many people remember the hop shortage of 2008? SA had extra, and sold them to the lowly brewer class at reasonable prices. I am in their debt.

Dave

 

[jamest22]

I don't see why we have to use the term "craft beer" in the sense that we are. Regardless of the size of Sam Adams I'd still call it craft beer, but not a "microbrewery". I think microbrewery/macrobrewery should be the size designations, with craft brewery not having anything to do with size. I don't see any reason there can't be a very large, very successful craft brewery. Craft to me is more about quality, attention, process, etc., and not about amount of output.

I agree. This is exactly what I was getting at.

 

[bob1852]

In my opinion "craft" shouldn't have a legal definition.

It brings up the point why "craft" was even brought into the beer world. It's my understanding that it happened because some of these breweries got bigger than the defined "micro brewery" but still wanted a term that they could use to set them apart from the giant corps making primarily light American lagers.

 

[bob1852]

I don't see why we have to use the term "craft beer" in the sense that we are. Regardless of the size of Sam Adams I'd still call it craft beer, but not a "microbrewery". I think microbrewery/macrobrewery should be the size designations, with craft brewery not having anything to do with size. I don't see any reason there can't be a very large, very successful craft brewery. Craft to me is more about quality, attention, process, etc., and not about amount of output.

I agree. This is exactly what I was getting at.

(wished I would've read all this before I posted )

 

[Holycrepe]

I have had a negative view of SA for along time, questionable marketing back in the 90's, IIRC they got kicked out of the GABF for a couple of years due to some of their claims on winning...

They also made a big deal out of freshness, but in my area you could routinely get SA beers past expiration at blowout prices. this was even after the commercials of them claiming to destroy all the old beer. It wasnt just one store or one distributor doing these blowouts, and when i personally talked to SA regional manager about it, they basically told me I had to be mistaken, as they didnt allow that, 6 months later, the practice was still going on in my area. I loved getting 22 oz SA beers for 99 cents, but it showed me the hypocrisy of marketing that SA liked to follow.

but since other beers began to emerge, i havnt had an SA in years.

 

[olllllo]

It seems everyone is in agreement that SA is no longer a 'craft' brewery.

Re-read the replies. Not everyone.

To all BBC haters:

1) BA is a trade organization. Back in the day they set up some definitions to define who they were and some goals to define where they wanted to be. That way they could exert some political pressure (among other things) on legislative bodies to help them grow. Lobbies and legislative efforts are not exclusively used by AB, in fact the AHA has a lobby tio protect your damn rights as a home brewers, so get off that high horse.

2) The BA used the existing excise tax designations to exclude the largest 3 breweries. They used "independently owned" to stave off big 3 buy outs from diluting their trad organization.

3) The entire point of the BA is to GROW. To get big! To have a larger marketshare for craft beer. If you kick out members that make craft beer once they are successful is completely insane.

4) One of BA's stated goals is to obtain 10% marketshare. If you kick out BBC, the BA loses about 20% of it's barrelage to about 3.5% marketshare plus one of it's most prolific spokesmen and champion. If you dis' Jim Koch, I will fight you!

If you've had just a handful of BBC's beers and you are a homebrewer, then I will tell you that Jim has probably spent more money on you then you have on them.

I'll say it again.

If you've had just a handful of BBC's beers and you are a homebrewer, then I will tell you that Jim has probably spent more money on you then you have on them.

BBC is craft beer, Craft beer isn't just beers you like.