Inbev's new distro incentives

It's not "sell more of our product," it's quite plainly "sell less of the other guys' products." To qualify you can't distribute any beer from large and mid-sized craft brewers.

 

It has zero impact assuming that the breweries you love manage to stay afloat with more-limited distribution. No doubt most will find a way to survive, but this anti-competitive behavior could be the thing that forces some out of business. That's fewer pumpkin peach ales for BAs to fuss over.

 

What I would find funny is if a lot of these larger distributors play the game and spawn off a wholly owned subsidiary craft distributorship funded with the kickbacks from InBev. Now that I would like to see

 

Not if they buy brands "crafty" enough to appeal to the common consumer. Their deals over the last few months indicate they want to push these products into more areas. The reason these breweries say they wanted to sell was because of the fact "they could get more of this great beer into more peoples hands". It's happening at the expense of almost every other small brewery trying to get just one beer into a super market or beer stores shelves. But really, who wants some standard run of the mill IPA when they end up pushing OUT a local brewery who is crushing it. Even your Constellation Brands sees this same dynamic at play here. The common consumer, who is not us, who is not 100% informed, will see these AB INBEV backed beers everywhere and assume they are everywhere for a reason. It's not 100% because they are great, or even good.

 

Looks like they are trying to monopolize the beer industry too... One way to avoid this is, don't go to the stores that would rather sell AB than craft beers. Unless you have no other option, why would you? The consumer has power, and though it's not nice to try to run your local business to the ground because they refuse to pick up the products you like, it's also not nice for them to take these "incentives", or for AB to be bribing the system. Can't they just let the market work itself and lay back in their millions, rather than obstruct justice and continue to rig a plot? This type of market manipulation should be illegal, but we incentivize this type of activity. It will only make AB bigger and more rich... All we can do is try to prop up the little guy, the craft brewers and the businesses that sell their products, rather than incentivize this type of action. Unfortunately, too many people don't know what's going on, and don't appreciate good quality enough to stop it.

 

Lol. The only thing my local supermarket is missing is Barrel Aged Beers, High quality Sours, & Russian River. (Safeway) Whole Foods more than makes up for this...

That's way more than enough or expected from me, and I don't see this changing any time soon.

 

I wish my beer distributor would just start selling food--problem solved. There's a business model in there somewhere

 

What you're describing isn't free market capitalism but crony capitalism or economic fascism, take your pick.

 

Economic fascism may get closer.

 

I don't buy megacorp beer from megacorp grocery store. I buy my local beer from my local shop. They're awesome people there!

 

Yeah... but how does it get from the brewery to the shop? That's the topic of this thread. If your local brewery self-distributes - legal in about half the US states, but not always the choice of many breweries even where it is permitted - that's fine. But, as noted in this thread, many small brewers' beers are distributed by the local independently-owned AB house and this ABI incentive program could have an affect on the availability of those beers.

 

For years I warned craft brewers to not buy into the big distributor's profound smoke-blowing. They (big distributors) always promised huge numbers, but would let many brands founder, cut skus, and just simply not care. I've seen brands brought on and intentionally killed. Some do better than others, for sure. Some local brews do quite well with the big distributors.
Also, lots of the sales management of recently sold craft breweries had historical ties to the Mega brands. None of this surprises me in the least. My dad used to tell me that no business likes competition. I was young, but now I understand.

 

Someone made the point earlier that this is also a move to push AB InBev's "craft" brands like Goose Island, and I can't disagree. I took a look at my local AB-InBev distributor and they indeed carry some of the largest "craft" brands, such as Oskar Blues, Sam Adams, New Belgium, and Deschutes, as well as a larger local Perrin (now owned by Oskar Blues). Does anyone have any factual information on how these contracts work? I would presume there is no way a distributor can drop a brand and prevent them from working with another distributor as that would effectively shut them out of a market? What would concern me is if the distributors pinched the sales/distribution of certain brands to make these incentives.

The hypocrisy in the craft beer community runs deep though. We call AB InBev evil and yet we allow profits to funnel back to them every Black Friday when we (not me personally) go crazy over the Bourbon County stouts. Let that soak in for a little bit, people.

 

So just how would this work in this situation? If the big distribution house drops a brewer it's a termination of the contract, right? I assume this is one of those situations where the brewer is free to use another distributor. Would that be the case?

 

Well at least I don't have to obsess over the fact that I couldn't buy any BCBS this year.

 

This gets me thinking also. In general brewers cannot break the contract. Can distributors? I would imagine that would fall under state law and would vary state to state. The nightmare scenario is that a distributor figures they have put money into promoting a brand so doesn't want to give it up. So they keep the contract and not sell any of their beer. Since these incentives are not contractually permanent I assume they keep the brewer for after the incentives go away.

 

In a franchise state things get dicey. Here in N.C. after selling a single case, a distributor has franchise. I'm not exactly certain about lack of sales or purchases over time determining when a brand can be freed up. It seems to be a mysterious gray area. In most of these situations the owner of the franchise generally refuses to "release" rights. Lawyers are often involved. Franchise laws are guarded with vigor by distributors. It is like a form of equity. There is a formula of multiples of GP and cash is often involved. And then there are the negotiations between vying new distributors with a once burned brewer. It's a funny business. I've benefited and been screwed. Also, these same terms apply to a brewer that wants to leave a particular wholesaler for whatever reason. It's all about the money.

 

There is a thread here in the New England forum that discusses this in regards to Mass with one of the brewers @masterob8 weighing in from Night Shift Brewing

 

I wonder if this is why Deschutes was just dropped. If the retailers keep on ordering the beer they would be bound to deliver; in that case they would risk losing the incentive.

My optimistic hope is that this event is the catalyst for franchise reform, which has been needed for a while, but never more than now.

 

Michael, as I read the article the distributor was compelled to drop Deschutes as part of the provisions of the AB incentive program where only smaller breweries were permitted to be represented by participating distributors:

“And beyond pushing up the percentage of AB InBev products in the mix, the incentive plans place another restriction on the distributors who choose to take advantage of the offers: They can only carry craft brewers that produce less than 15,000 barrels or sell beer only in one state. Such a provision would put a hard squeeze on excellent, relatively large craft brewers like San Diego's Stone, Northern California's Sierra Nevada, and Colorado's Oskar Blues. InBev's new program is already having an impact, the Journal reports.”

Cheers!