Beer wars in Massachusetts

This is more detail than you can get into in 700 words on the op-ed page, but the gist of what the AB-InBev people are saying is, their distributors need to be "aligned." That means Goose Island and brands where AB has an equity relationship are OK, but non-friendly crafts are not. That said, L Knife is probably in a better position than most distributors, from a market strength standpoint, to stand up and make a case against 100% Share of Mind 2. But that doesn't change the facts that AB-InBev is trying to bully its distributors into playing craft/faux craft favorites, and that MA state law encourages shenanigans because distributors wrote all the laws.

 

Yes, this is very similar except that there are not a bunch of small car manufacturers and most dealerships carry only 1 or 2 brands and thus their entire business is built around those manufacturers and losing a franchise would mean the death of their business.

While on the beer side there are certainly the Goliaths of the industry (ABInBev, SABMiller, etc) that could sink a distributor by pulling out but there are also a lot of smaller manufacturers who's percentage of sales is minuscule in comparison and would barely put a dent in a distributors bottom line if they were no longer in business together. The proposed bill protects from the former while also providing a less messy means of escape for the ladder.

 

Isn't part of the issue the AB-InBev crackdown it's self? If the Bud "owned" distributors are forced to push only their brands and aligned brands, it doesn't mean the small brewers can leave. It means the non ABI brands can languish in warehouses and be taken off shelves by the distributors while the small brewers can do nothing about it unless, as the editorial says, a costly lawsuit. My take is that the bill would give the small brewers the ability to buy out of their contract.

Also, this bill would really affect out of state craft breweries being distributed into MA because Massachusetts and 33 other states have a right to self-distribute according to the Chapter 138, Sections 18-19 of the Mass General Laws per the Brewer's Association website. Of course, about 230 breweries distribute to MA and only 25 or so are in state, so this ABI crackdown could hurt a lot of our favorite brands!

 

There are no Bud "owned" distributors in MA that carry anything but products AB has a financial piece of. The only AB owned distributor in MA is the one that services Greater Boston.

 

AB-InBev doesn't need to own a distributor to control them, all they have to do is give them financial incentives or threaten to take away their business to tell them what to do. When 90% of your business comes from one company you tend to listen to them.

 

Isn't the whole point of the existing law that AB-InBev can't take away their business? It seems like an empty threat, at least in MA.

 

when 90% of your business is performing poorly, you tend to diversify. AB can huff and puff all they want, but they can't legally take away their business. isn't that what this thread is all about.

 

here's a great article summarizing the tactics AB takes to attack craft brewers in AB distributors.

http://jackcurtin.com/ldo/?p=7052