Poll: Would you sell out?

And on cue, we've got another attempt by Big Beer to stomp out the little guy here in Texas.

What's the cost of selling out? This from a Facebook post by Independence Brewing Co. after standing against SP 2083 today in Austin:

Yesterday morning, I joined the Texas Craft Brewers Guild along with some amazing Texas Craft Brewers at the State Capitol, to fight SB 2083.

We want to share some important points from yesterday. Independence Brewing Co. wants all Texas craft brewers to succeed and reach their potential. That’s why we (and over 200 fellow Texas breweries) support the Texas Brewers Guild and its opposition to the latest legislative efforts put in motion by the Wholesale Beer Distributors of Texas, a lobbyist group aimed at passing laws that directly benefit their wholesaler clients’ bottom line.

What do they want, exactly?

If passed, breweries that join forces with bigger entities (other breweries, private equity, etc.) would be forced to re-purchase our own beer at a 30% markup in order to sell it in our tap room. This means we would have to pay a 30% fee to our distributor for beer that they did not brew, did not touch, and did not facilitate in moving, simply because they feel as though they're missing out on sales.

Now, if you ask the Wholesale Beer Distributors of Texas, they’ll say this is for the craft brewer’s own good; they’re protecting craft beer from the big, bad ABI’s of the world.

But if you ask the Texas craft brewers that would be directly affected by this bill - you’ll hear a different side of the story. To paraphrase what several of our fellow craft brewers conveyed yesterday:

"Thanks, but no thanks. We didn’t ask for and don’t need your protection."

For Independence Brewing Co., passing this bill could lead us down uncharted territory, as we are perhaps the brewery most impacted by this bill. We are being held up to the same penalties as Karbach, who sold their entire company to AB-InBev. I would like to point out that we are still controlled by our original founding partners (I am one of them). And that the way the law is written does not take controlling ownership into account. I have no doubt that my fellow Texas brewers will find new ways of organizing their business – likely in ways we haven’t even considered yet. This bill is unnecessarily heavy-handed in its approach. To paraphrase Live Oak Brewing's Chip McElroy “it’s like killing a fly with a sledgehammer.”

For others craft brewers, it could mean not having the chance to reach their potential - and because of what? To "protect" the middle tier. I’ve tasted some of the best beers in my lifetime here in Texas, and a few of those were at smaller brewers. They - just like any other American business - ought to have the ability to forge their own path.

Building a successful brewery is a lifetime of hard work, dedication to the craft, sleepless nights, and huge financial risks that could end with bankruptcy with one wrong move. I spent over six years personally slinging kegs, stocking store shelves, and to this day find myself doing in-store beer samplings.

We truly respect and appreciate our distributor partners. We depend on them to help us grow our business. From transporting beer, cleaning draft lines, managing accounts and keeping shelves stocked, we value their important work that too often goes unrecognized. This is a symbiotic relationship - we need one another to thrive. Not to mention, distributors employ hundreds of great folks all across Texas in a booming industry - you may know one of these hard working people.

But it doesn't make sense to pay distributors a fee for something they are not actually doing. Beer sales at the tap room did not exist before 2013. This was not something we were "given" nor was it something we "took" from distributors. This is something we created from the ground up. Distributors see this bill as a compromise. They feel it’s time they got their share of this new revenue stream.

This is not a compromise. This is not protection. This is not good for Texas.

- Amy Cartwright

 

Well, yes ofc. now gotta be part of the team to buy the fancy new hops

https://www.beeradvocate.com/commun...f-south-african-hops-to-indie-brewers.509891/

 

That's disgusting....They are trying to create legislative extortion....

 

Yup....everyone has a price. Some people's numbers are just a little higher than others. Easy to say no when you're not the one staring at a boatload of cash you've worked many hours to potentially get a huge payday.

 

It's the American way.

Listening to Dan Carlin's Hardcore History podcast over the past few years, I'd say it's possibly just the human way (humans *will* be greedy humans ... and if you listen to his Fall of the Roman Republic series, you can't help but see the similarities between Rome's situation around 100-50 BC and the current state of affairs in the U.S. ... but I digress ).

What sucks hard here in Texas is the fact that we were making some legitimate progress helping the smaller breweries. But just when you think you've got Big Beer cornered, they pull some crap like this, which is so clearly designed to squash the little man that it's comedic.

But the sellouts say over and over, hey, no worries. So what if AB-In Bev owns ALL the beer? How bad could that be?

 

I've debated this kind of thing in my head before. In the past I've played devil's advocate and entertained it. If I'm proud of my product and my ultimate goal is to get it to as many people as possible and this provides a means of helping that along, plus a pile of cash... But recently it's become clear that I lean the other way. The craft and now independent beer movement seems to have put a huge emphasis in local pride as well as camaraderie in the brewing family. Selling out, as we've recently seen, takes away from your public image/impact and reputation and questions your true motives and values. There's a strong possibility that there will be be a backlash of some size which impacts both your own financial stability, but also how much of an impact you can have in your community. The recent hop-gate shows that selling out is more than just about money. It's throwing away a lot of values that most beer people hold dear. That we brew because we love it, because we believe we deserve better than a flavorless can of mass produced barley water, and because we take pride in being part of such a strong community that supports each other. As Sam Calagione put it, "Craft beer is 99% asshole free." We root for each other. We collaborate with each other. We come together to share what we love. If 1 brewery does better than another, good for them. They probably deserve it. But there's no reason to ever try to keep another brewery from having their shot at success (by, say, withholding ingredients).

 

Big beer?

Sound much more local to Texas than it sounds national. Most all, if not all, wholesalers in both Texas and in PA are independently owned and have contracts with Brewers to sell their beer. Just as in PA politics the Wholesalers as a group lobby to protect their own interests. But there is hope. Recently in PA we've been seeing 70+ year old laws changing to the customers' benefit, and despite special interest lobbying, as our legislature slowly moves towards modernization of our alcohol laws in general. If the PA legislature can move to free things up there's hope for TX as well.

 

The selling out happens when you decide to stop pleasing yourself and your friends with great beer you find you are talented enough to create, and turn it into a business, especially one with employees. There can be no additional selling out after that.

Almost all business owners continue to be sell outs, including pretty much all beer companies, big and small. I know the Trappists are probably not sell outs, since they require works of charity to become a member, and profit is not a side effect of greed for these folks. Paul Newman's is an American brand that comes to mind as not continuing to be sell outs, their profits go to charitable works also. Would love to see a company like Newman's purchase a company like Lagunitas since it is likely no large American brewer, no matter how hippie they paint themselves, will do the equivalent good.

 

Sure they do - they own "Wholly-Owned Distributorships" in around a dozen different states (including one in Boston, MA), accounting for around 9% of all AB sales - making them among the largest wholesalers of beer the US.

By agreement with the DoJ which allowed the SABMiller merger and required selling SAB's share of MillerCoors to Molson Coors, they've also agreed to not go above 10%.

 

While I totally agree with you from a beer advocate / consumer standpoint - presumably these guys are contractually bound in some way to stay on message. Particularly those retaining some kind of role in the operation (where contractual or not, it's common sense).

Would love to see someone say "sold out to those ABI shitheads. when my non-compete runs out in two years I'll announce my new brewery, in the meantime don't buy any more beer from my former brewery. I'll be on my yacht if you need me". But I'm guessing they can't - however I'm not a lawyer, don't work in m&a, and have never run or sold a business. So just an educated guess.

Either way Tony Magee went many times above and beyond what was expected of him and it made me puke in my mouth a little.

 

Everyone here will say NO, until they see that cash or check with all them ZERO's in front of them.
Plus with "selling out" most the time the beer doesn't change. The distribution foot print changes for these companies.
Upside there is no such thing as a hop "shortage" for you anymore

 

The poll doesn't state any specifics, so in the words of The Million Dollar Man, "everybody's got a price..."

 

Abstain because I agree with @Todd that the poll is presented in a very biased manner.

 

And perhaps it's easy to say 'yes' when you're not staring at your life's work in the company you built from scratch and had dreams of passing on to your children.

There's no right answer here, but I can't say I like the fact that so many people are treating "yes" as the default answer and acting as if anyone who disagrees is being dishonest with themselves. Once you are earning a comfortable and secure living, there is more to life than money.

 

I was thinking more along the lines of selling only from a tap room or a brewpub. Regardless they probably would be considered competitors if they sold anything to go. I stand corrected nevertheless.

 

If the money is there, yes. It's easy to say no when you don't own a brewery/business. That being said, since I don't own a brewery, I reserve my right to join the witchhunts against "sellouts".

 

So far, about 80% of the BAs taking the poll say "YES"! (227 votes).

Cheers!

 

The Brewers Association has taken to use the term "own premise sales" for those sorts of on- and off-premise onsite sales done at the brewery itself.

Rather than "self-distribution" it's closer to "no distribution" in which the consumer handles the transportation. As @beertunes noted, AB has backed into some of those sorts of sales by buying craft breweries. They ran into conflict with local three tier rules with some of them, IIRC, -- Idaho after the 10 Barrel purchase?

 

Trappist can't make a profit, anything left over after taking care of living expenses and maintenance must be donated to charity.

I think I would amend your comment that once you turn it into a business you've sold out to once you've set your primary focus to making money you've sold out. If you're business is primarily about making good beer and treating your employees fairly then you haven't really sold out. Take Ben and Jerry's ice cream for example. Historically they've had a policy of keeping a ratio of highest paid to lowest paid employees as well as being very charitable. They are a successful business that continues to make quality ice cream. Another example is a New England furniture store called Jordan's Furniture which was owned by two brothers. Maybe 15-20 years back they sold their business to Berksheare Hathaway I believe and gave each of their employees something like $1000 x years of service. You had some employees who worked there several decades. One brother retired and the other focused on his passion creating the commercials for the store. Selling out doesn't always mean "selling out".

On the flip side in another thread there are lots of stories of how employees got raises, health insurance, better working conditions, etc. after being purchased by AB. If the evil big conglomerate treats you better than the saintly craft brewer then perhaps the craft brewer had already sold out long ago. In most corporate environments when you get bought out by a big company you lose benefits, kind of odd that the craft beer industry is different. The breweries being bought out aren't too small that they can't provide health care or benefits to their employees. I've worked for companies with much smaller valuations than some of these breweries and I had much better benefits than what the buying company had.

 

You're probably right about that. What makes me puke in my mouth is someone like Meg Gill (co-founder of Golden Road) taking on the role of AB-InBev shill. And the way InBev very obviously trots her out as a token female "brewer" (who happens to be young, blonde, and photogenic). It's a stone's throw away from a "Smart Bud Girl," which is creepy. I don't know--as a branding guy myself, I might be imagining the worst, but it's InBev, after all.