Silver Eagle Boycott

I just came back from Denver. Found something called The Cut from some dude named Casey. I'd trade it for a KBS maybe.

 

Simple answer is that assuming the bar never closes, the bar owner NEVER gets that money back (it is constantly tied up in a rotating keg deposit). As far as I can tell, the keg deposit is effectively an INTEREST FREE perpetual loan to the distributor (assuming you're not actually losing kegs or closing your bar). If you charged a "deposit" equal to the cost, the bar owners are probably better off buying the keg and actually controlling it/being able to sell it for scrap. A keg deposit equal to the price of the keg makes absolutely no economic sense for bars.

But of course either way (full cost deposit or buy the keg...or even increased keg deposits) that additional sunk cost needs to be passed on to the consumers, if possible, as bars are not charitable organizations. If it can't (because the "market" won't tolerate it) the bar owners will need to find other ways to cut costs (cut wages/hours of employees or take a personal paycut) or they will go out of business. I'm guessing most bar owners are not multi-millionaires so massive deposits will probably hurt them significantly. If the deposits were this high, or all bars had to buy their own kegs (and good luck with breweries correctly managing multiple bar owners' kegs), we would see much less variety in our bars as the sunk cost of those deposits/keg purchases will make having a huge tap wall pretty hard to bear.

The real solution is to keep the deposits low and charge people for lost kegs. That's a tricky inventory issue given craft beer bars that sit on/age kegs but I bet it can be done. The problem with this solution is--who pays for the tracking and collections?

Also, a $70 deposit still doesn't solve the "arbitrage" of effectively buying kegs for less than cost. So any deposit alone really cannot solve that problem.

 

Maybe it should be seen as a loan to the breweries since distributors are having to pay those same loans on? How can you possibly see it as a loan to distributors? But, they blaming it on the distributors instead of breweries makes it sound so much better to the public.

Sunk costs? Raising prices? They are operating expenses. Most of the bars opening already have calculated the cost of keg deposits into their opening costs. Or, at least, they should have. And this increase will only cause (as already discussed), at most a $1k increase over a couple of weeks. Not some huge chunk of money for most 60 tap beer bars.

And let's say that they cannot afford it. Then maybe they should return some of their kegs in the cellar. Those are just eating up costs. Tap 10 of those, return the kegs, and boom, you have $600 back. I doubt they will do that. They like having the rare kegs every now and then and can afford to have those sitting back there.

 

As aschwab mentioned, most keg deposits are an initial opening cost only. One distributor increasing it by $10 isn't going to put bar owners/managers in a position where they have to cut hours or wages, and it certainly isn't going to put us out of business. Like I mentioned above, this is costing me as a bar manager less than $200 over the course of several weeks. If I can't afford that, then I have much bigger problems than keg deposits.

 

How about using some of those disposable PET kegs? I've seen them at several places. Would paying for the beer with a one time cost of that disposable keg be better than the deposit money? The industry in general would also save on the return shipping/handling costs...

 

If it's disposable then no. A stainless keg is reusable so you don't lose your money on your deposit unless you don't return a reusable keg. If your vessel is disposable it doesn't matter how much you pay, you'll never see a return.

 

C'est la vie

 

"use their shitty distributor"

Would anyone blame SE for just stopping serving Petrol Station?

 

I see they are feeling a little high and mighty.

I'm waiting for SE to distribute Brash. I would lol.

 

Well, folks. The Petrol Station got their strong dismay expressed to Silver Eagle. They did what a good business operator should do in light of the circumstances. I'm at The Petrol Station at this very moment. There were two Silver Eagle vehicles in the parking lot when I arrived. I'm not privy to the details but at least the brewer's reps and Silver Eagle were able to convince The Petrol Station to continue business with them.
For those of you who seem to be butthurt about this ruckus, fine. Please choose to not do business with The Petrol Station or Brash Brewery. No big loss. More good beers for me.
They have been reasonable. Get over it.

 

Those 2 big SE trucks are filled with plenty of profits. I guess the profits loss from not selling any SE products had nothing to do with it.

 

I think the people "butthurt" by this ruckus were the people who felt AB and SE were trying to destroy craft beer. I just thought most of their anger was misplaced. That didn't hurt my feelings nor would it stop me from going to Petrol Station. I don't have to automatically agree with what Hay Merchant. Flying Saucer or Petrol say just because they're some supposed stewards of craft.

 

"Get over it"....coming from someone who is backing the bar who went on a temper tantrum over a $10 rise in keg deposits who was forced to get over it.

Funny use of the term there considering we have been telling the Petrol Station that the whole time.

You are not privy to the details, but you are assuming that SE cared about their tantrum online "and convince them to continue to do business"....instead of the more likely thing where Petrol Station did not get the backing they were expecting online over this and gave up on it. But, I am not privy to information either.

Two trucks there? More than likely all the deliveries as opposed to SE rushing over with reps to beg for forgiveness.

A good business does not take all their personal business details to social media as some huge injustice to their business while blaming it on whoever they can while conveniently skipping over the actual reason why keg deposits need to be higher. They targeted their messages to people who were too lazy to look into the details and would get their pitchforks out to back whatever a facebook message says.

We all agree that they should have received an earlier notice. And that is about the only injustice here.

 

Right. It's not unjust for a brewer to charge $35 keg deposits and for the distributor to charge $70. That's totally fair.

Cheers!

 

Seriously Andrew Schwab? You and all the other Austinites don't have a dog in this fight. Neither does DFW.

It was the Silver Eagle company reps that were at The Petrol Station this last Friday, not delivery trucks.
The keg deposit was $50. It will be $70 in September. A 40% increase and the highest in Texas.

Budweiser has all the leverage with Silver Eagle. This incestuous relationship gives craft breweries very little leverage with Silver Eagle. It gives Silver Eagle (and Budweiser) leverage over the bars and restaurants that are "craft beer only" in their distribution area.

Nobody wins except Budweiser in this situation.

 

Good.

 

blah blah blah, keg shmeg. When the hell is the next Freetail sour release....

 

The only reason Petrol gave up was they didn't get the people to rebel against the evil galactic beer empire ruled by Lord Bud. They would still be boycotting if they got the public uproar they were looking for.

 

I live in San Antonio and we get SE distribution so technically it applies to me and it definitely applied to @FreetailBrewing please see their comments regarding this situation. I would also recommend reading what @pwsoldier had to say since he orders kegs for big hops in San Antonio. Basically what I'm saying is it's just some Houston bars that are upset.