South African Hop Importer Greg Crum, Owner of ZA Hops, on AB InBev’s Monopoly

Last Call by | Jul 2017 | Issue #126
Art by Nathan Arizona

The day Greg Crum talked with BA, he shipped his last box of Southern Star hops. His business, ZA Hops, which imports South African hops to the US, was closing two weeks after an announcement from AB InBev that it will stop selling South African hops to third parties outside of South Africa. Crum says he should have seen it coming in 2016, when AB InBev acquired SABMiller, which owns all the hops farms in South Africa. Only a week before the embargo announcement, Crum’s negotiations with SAB Hop Farms for next year’s shipments had 2017 looking like the most profitable year yet for ZA Hops. Then came AB InBev’s acquisition of Wicked Weed in May. Crum believes ABI is banking on Wicked Weed and other brands acquired by its High End division to create internal demand for the South African hops. Whether they turn a profit, though, is still up to consumers.

Break down what’s going on here.
There are two different pitches. You have the pitch from corporate ABI—that it’s a bad crop year, and SAB Hop Farms accounts for less than 1 percent of the world’s hop volume, there’s just not enough to go around. Whereas the story from SAB Hop Farms is [that] ABI wants exclusivity for its High End brands. For a mega-brewery, 40 metric tons of hops perhaps is a drop in the bucket for their global usage, but for the craft beer industry, half that amount, which was the figure that was in consideration as potential for export to the US, that’s actually quite a bit of hops, particularly when the bulk of my customers are small guys that are brewing between 1,000 and 15,000 barrels a year. …

One of the arguments ABI made is because of their internal demand, there’s not enough to go around. [However,] SAB Hop Farms and I were negotiating on volumes for crop year 2017 in November. … I already have pre-orders from my existing customers for crop year 2017. There were already dibs on the hops. ABI didn’t even know of these hops when craft brewer demand was being established. It’s not being truthful to say, “We already had all this demand, sorry, there’s not enough to go around.” Well, you guys cut the queue!

Now that they’ve started moving in on the raw materials market, what do you think will be ABI’s next move?
They’re working very hard to discredit what craft means and to discredit the typical craft beer consumer, to try and paint them as this extremist or not a reasonable person. They’ve realized they can’t compete with it, so they’re going to buy it up, become the wolf in sheep’s clothing, and at the same time they’re going to try to take away what the movement was about, what it is to a lot of people. … From my West Coast perspective, having been exposed to craft beer since the late ’80s, it’s always been a counterculture movement. That’s important to people. That’s why I’m in this industry. But they want to discredit that. They want to make it blasé, that’s past tense, we’ve moved on, it’s just about good beer, and Goose Island makes good beer.

I think this move to keep all of one country’s hop production in house is a sign of the times. They’re tying up distribution, they’re controlling governments. My hunch is you’re going to see more and more acquisitions of craft breweries. If you’re a craft brewery that’s had a successful run, and you’re getting a little bit tired and thinking about retiring, it would be a damn good time to sell, and ABI is in a great position to capitalize on the current economic situation.

What can we do as consumers?
Vote with your dollars. That’s the only way they’re going to feel it. They don’t care about anything else. They care about money. … As soon as a company is no longer craft, I don’t buy them. I don’t support it, because it’s deeper than just good-tasting beer. There’s more to the picture in my eyes, and I know a lot of other people share similar thoughts. So boycott them. Get the information out. Let the consumer know who owns these brands. …

Going way back to the roots of the craft beer countercultural movement, the problem was Anheuser Busch, the problem was Coors, the problem was Miller. Those companies cannot now suddenly be the solution. You can’t make the problem and sell the solution at the same time—you are the problem.

A condensed version of this interview appeared in BeerAdvocate magazine issue #126 (July 2017).