Poll: Would you sell out?

Well, when Pete Schlossberg, of Petes Wicked Ale, sold his brand it was in the neighborhood of 5 years, IIRC. As I mentioned above, Dick Cantwell still can't brew (and he voted against selling out), even though he wants to. Seems to me that the Big 2 aren't going to let a potential competitor loose sooner than they have to.

 

“Massachusetts regulators Tuesday extended their crackdown on anticompetitive practices in the beer industry to the biggest target of all, Anheuser-Busch, saying the brewing giant gave illegal incentives worth nearly $1 million to hundreds of Boston-area bars and package stores to push sales of Budweiser and its other drinks while stifling those of other brewers.”

AB is doing something “illegal”. I am shocked, shocked I say!

Cheers!

 

Of course not. But lets not pretend that such a non-compete clause is unique to brewing and the Big 2. Hell, it's even been know to happen that non-profits have similar requirements when someone wants to leave their institution.

 

Oh, sure. I was just pointing out to all the folks saying that they would take their big buyout money, and just open another brewery the next day, that, no, they wouldn't.

 

Got it. What you're really after is introducing some reality to those who have little or no experience with what the business world is actually like.

My concern is that some folks with less experience than you have would think it was unique to the Big 2 rather than a pretty standard business practice. As you may have spotted, I'm a great believer that we want to know and understand what the enemy is actually guilty of since we may only get in one counter punch and want to target the real rather than the imagined.

BTW, I haven't double checked but IIRC Cantwell's general non-compete period is almost up and there are reasons to think he's intending to open something in one of the 47 states where the 3 state long-term non-compete doesn't apply.

 

I didn't think state law were even involved. Was under the impression that the no compete clause was just part of the sales agreement.

 

And since it is an agreement it is totally negotiable. A person selling a brewery could refuse to sign a sales agreement with a no-compete clause. If the buyer refuses this 'change' then the seller can decide to not sell under those conditions.

My wife in the past worked as a contract employee and the company asked he to sign a no-compete. She refused but they hired her anyway.

Just because one party of an agreement makes a demand does not mean that it has to be a part of the agreement.

Cheers!

 

I said "NO" --- only because I wanted to see the results and "Results are only viewable after voting."

I will verify this answer after checking some of my previous answers to similar questions:

--- Super Powers, If you had-
--- Magic Lamp, 3 wishes from Genie w/
--- Lottery, What would you do if you won a million a hundred million dollars in the-

 

State law does affect non-competes. They are void in California.

 

So, let's discuss the sale of Golden Road to AB. If AB insisted that there be a non-compete clause in the sales agreement and the folks of Golden Road signed the sales agreement the non-compete clause would be null and void due to CA state law?

Cheers!

 

IIRC, it has nothing to do with state laws at all. There seem to have been two parts to the non-compete agreement. The first, expiring soon, is a general short term, across the board non-compete. The second, more restrictive part is where he isn't allowed to compete at all, probably never, in three particular states identified in the contract. So IIRC this was in part of the agreement created by the ABInBev legal team, and nothing to do with any law by the states.

 

It would indeed be null and void in CA.

 

If anti-competitive practices are taking place, then can't we assume they have been for some time? And if that's the case, these breweries succeeded in that environment and became large enough and gained enough market share for somebody to want to acquire them.
But you're right, every beer we buy feeds into the system (whether to help big beer or small(er) breweries). The market will dictate what is important and it will change accordingly (as it has to this point). There are so many breweries that it will be difficult for ALL to coexist. Unfortunately, some will go out of business, whether it be due to big beer or small brewery peers.
However, illegal activity is illegal activity. It's gaining unfair advantage and should be punished when discovered.
To reiterate, if we don't like brands selling out, than we can stop buying those beers post sellout. If enough people do this, big beer will catch the drift. The only Goose Island beer I've purchased since they were bought out is BCBS and it's only been 1 bottle/year. 312 tastes like crap now. Which reminds me...
Big beer has always had an advantage. They serve 312 at Wrigley Field now. It has always been a little more difficult to get craft beer from the "little guys". Yet we have always and will always make that effort to go to the places where we can purchase the beer we want. If there is only InBev products on tap, I'm probably not eating or drinking there or will find a new place. It's easier than ever to find good beer on tap and in stores; 'round these parts at least (and the places I've visited).
I'd say it's a pretty freakin' great time to be a beer drinker. As somebody else mentioned, the next up and comer surely isn't far behind...

 

Contracts can't override state or federal laws. If a contract is written in a state that says non-compete's can't be implemented then even if the contract includes the non-compete it can't be enforced. This is affected by which state the companies are incorporated in as well as where the contract is issued I believe.

Generally I believe the precedence is that non-competes can't be so restrictive that you cannot be employed in your trade. Usually they are written to prohibit only certain things that would hurt the company issuing the contract. I would be surprised if they could legally prohibit him from operating in those states for a long period of time. I would also be surprised that AB would ask that and that he would accept that. Remember AB had more to gain with the sale than Elysian. Elysian just wanted money, they could continue as is or get offers from other breweries. Elysian was valuable to AB so they had more leeway in dictating non compete terms. There is really no long term risk in having Cantwell compete with them. There are any number of competing beers out there. Cantwell is not a brand by himself, if he starts a brewery his name is only so well known. The Elysian brand was more well known. The details of the non-compete are probably far less restrictive than we think. They can't stop him from being a commercial brewer only from competing with AB. AB doesn't self distribute so if the brewery he works at or starts only self distributes its not competing in the same market. I doubt they could legally stop him from that but again we don't know the specifics of the non compete.

 

Yes we don't know the details of the non-compete, but we do know that the state in which it was signed was not CA.

I'm also pretty sure, although I have the source at the moment, that Cantwell has publicly stated that the 3 states non-compete (no of which were CA) have a much longer time duration than the multi-state one that is about to expire.

 

My last link didn't work but after a little googling I did find this:
"When Elysian announced its sale, Cantwell told reporters he would stay on board, but even then he knew otherwise. Like Buhler and Bisacca, Cantwell had signed a contract to stick around, in his case for at least two years. It took some maneuvering with his lawyer, and walking away from some of the money. Under the terms of Cantwell’s departure, he can’t “work or invest or collaborate” anywhere in the U.S. for a year; Washington, Oregon, and Idaho are off limits for five years."

So it looks like 5 years in the other states. It also looks like these terms were like this because he signed an original 2 year contract to stay on board and then decided to break it. He was in a less favorable position to fight it at that point. The terms are pretty restrictive, much more than I would have thought but as I said at that point he didn't have much ability to fight it.

The source of the above text is: https://www.seattlemet.com/articles/2015/9/28/dick-cantwells-beer-is-immortal

 

Thanks for finding that! Looks like most of what I remembered was on the money and what was missing were a few details.

(I also wonder how many on this site will call him a hypocrite for saying he would so something and then changing his mind and doing something else. )

 

The full article is really interesting. You've got both sides of the argument set out between Cantwell and his colleagues being on opposite sides of the debate.

 

One of my buddies sent me a message after he heard the news and said, "People advocate for the American dream until someone else lives the American dream."

Wicked Weed built up their business until it was popular enough to expand and then they got paid. Isn't that what business owners in every segment of the economy work hard for?

 

Ah, but they do. This is part of the reason Inbev is buying small breweries, depending on individual state laws and production caps, these breweries are able to self-distribute, thus making Inbev able to do so, in this small way. They're using a multi-prong approach; buy the breweries, use their corporate muscle to push legitimate craft beers off shelves/taps and replacing them with Inbev brands, use their muscle to inhibit the flow of ingredients, pressure their distributors to not give legitimate craft brands good service (while at the same time keeping a craft brewer under their watchful eye), and keep talent on their payroll, and not brewing at a competitor.