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News AB InBev's ZX Ventures Buys Minority Stake In RateBeer

Discussion in 'Beer News & Releases' started by Jason, Jun 3, 2017.

  1. cjgiant

    cjgiant Poo-Bah (3,638) Jul 13, 2013 District of Columbia
    Supporter Subscriber Beer Trader

    My last point is that you're conflating shareholder impact with shareholder expectations. And you are much kinder than I to invest in a company you don't care about the returns - if they are one and the same.
     
    ovaltine likes this.
  2. Lone_Freighter

    Lone_Freighter Poo-Bah (5,168) Jun 4, 2017 Vermont

    Oddly enough, I found it weird that all of a sudden "ratebeer talkers" are on the shelves at a bottle shop here in Vermont all of a sudden. Don't ask me why, and part of me might even ask the manager - why?
     
  3. cjgiant

    cjgiant Poo-Bah (3,638) Jul 13, 2013 District of Columbia
    Supporter Subscriber Beer Trader

    Very well could be completely coincidental (to this news/thread). If you ask and get an answer, would be interested in hearing what you learn.
     
  4. Lone_Freighter

    Lone_Freighter Poo-Bah (5,168) Jun 4, 2017 Vermont

    God, I hope so, man, but it's a store I frequent and only saw those "tags" put up on Tuesday of this past week. Slightly weirded out, to be honest and hopefully not sounding too paranoid, but they weren't up the week before when I was in there on a Thursday the day before the ratebeer announcement.
     
  5. rgordon

    rgordon Crusader (733) Apr 26, 2012 North Carolina

    I volunteer to be an arbiter in a conversation that would be easy to make round. I just had ribs, roasted beets, a beautiful creamed cabbage, cornbread, and a bottle of champagne and it's our 36th anniversary. And two SNPAs while cooking. Arguing and agreeing simultaneously is curable.
     
  6. Lone_Freighter

    Lone_Freighter Poo-Bah (5,168) Jun 4, 2017 Vermont

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  7. EvenMoreJesus

    EvenMoreJesus Devotee (472) Jun 8, 2017 Pennsylvania
    Supporter

    So . . . what you're thinking is that ABI's plan is to make less money by selling more of their beer at a lower price point?

    That's not a good plan. Even for a large, multinational corporation.

    Add that to the fact that the craft beer market is not one that is centered around value and you have yourself at least one contradiction.

    Craft beer is a market centered around quality. Both perceived and actual. ABI, with their acquisitions and their investment in RB, is looking for ways to exploit that fact. They're not looking to make less money while putting their competition out of business. They're looking to make more money while doing it.
     
  8. Lone_Freighter

    Lone_Freighter Poo-Bah (5,168) Jun 4, 2017 Vermont

    I approached the manager today and asked him and he said "he was in Montreal last week and didn't know those were put up." I then directed him to the ratebeer tags in the aisle. He then said "most likely the distributors put that up but I will be taking them down as this is my store." I then shook his hand and said "thank you, much respect to you and your store."

    I'll be popping into this store later this week to follow up. :wink::sunglasses:
     
  9. poisoneddwarf

    poisoneddwarf Devotee (423) Mar 26, 2010 Idaho

    Were these talkers advertising beers owned by ABI?
     
    zid likes this.
  10. Lone_Freighter

    Lone_Freighter Poo-Bah (5,168) Jun 4, 2017 Vermont

    No, it was Ommegang, Smuttynose, Great Divide, Dogfish Head, Alesmith, Stone and Victory.
     
  11. zid

    zid Champion (849) Feb 15, 2010 New York
    Beer Trader

    Note that that Brewbound page (a craft beer journalism website) features a link to the 2017 Summer Brewbound Session, a craft beer industry conference. The welcome reception will be at the Anheuser-Busch NYC commercial strategy office and will feature offerings from AB InBev’s “The High End.” The Craft Brew Alliance is a conference sponsor.

    Everyone here can read into that however they've been reading into everything else. :wink:
     
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  12. jmk

    jmk Initiate (121) May 8, 2008 Illinois

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  13. lordofthemark

    lordofthemark Aspirant (290) Jan 28, 2015 Virginia

  14. meefmoff

    meefmoff Disciple (312) Jul 6, 2014 Massachusetts
    Beer Trader

    Yikes, that certainly puts those score tags in the beer aisle in a different light (not that I personally paid them much attention to begin with).

    Hopefully the same isn't true for the companies who do the wine ones since that's an arena where I am actually influenced by the tags.
     
  15. cavedave

    cavedave Poo-Bah (2,257) Mar 12, 2009 New York
    Beer Trader

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  16. zid

    zid Champion (849) Feb 15, 2010 New York
    Beer Trader

    RateBeer reviews? The article isn't really about that. There are people who use both RateBeer and BeerAdvocate and they simply paste their reviews in both. A review there taken on its own wouldn't have any less value.
     
    lordofthemark likes this.
  17. cavedave

    cavedave Poo-Bah (2,257) Mar 12, 2009 New York
    Beer Trader

    Folks who assume that RB Brewery ratings are based on some formula from user reviews of the beers they make now know that the system is broken and that feature doesn't work. Joe Tucker supplied that explanation himself.
     
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  18. Jason

    Jason Founder (8,114) Aug 23, 1996 Massachusetts
    Staff Subscriber

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  19. HawksBeerFan

    HawksBeerFan Aspirant (241) Dec 24, 2011 Texas
    Beer Trader

  20. meefmoff

    meefmoff Disciple (312) Jul 6, 2014 Massachusetts
    Beer Trader

    I can only picture you and your brother sitting back with a big tub of popcorn (and a beer) with your feet up watching this all unfold :slight_smile:
     
  21. Loops

    Loops Initiate (131) Feb 13, 2014 Missouri

    I was once a Union worker in a warehouse that was over looked by a window in the Salary employee office. The entire time I worked in the warehouse we talked all day about how the office people looked down upon us. We always thought they were laughing at us down in the warehouse sweating our asses off. I eventually got a job in the office a few years later and I found out that no one in that office ever talked about us or gave one shit about what we were doing. It was all in our heads, its called Paranoia.
     
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  22. lordofthemark

    lordofthemark Aspirant (290) Jan 28, 2015 Virginia


    I don't look at brewery ratings. I look at individual beers. And I pay less attention to numerical averages, then to well written reviews, or ratings by people I know. There are too many garbage ratings on all sites.
     
  23. EvenMoreJesus

    EvenMoreJesus Devotee (472) Jun 8, 2017 Pennsylvania
    Supporter

    Exactly.
     
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  24. Todd

    Todd Founder (5,534) Aug 23, 1996 California
    Staff Subscriber

  25. Sixpoint

    Sixpoint Poo-Bah (1,592) Jul 25, 2004 New York
    Supporter Subscriber Industry Beer Trader

    @zid @cavedave

    I did happen to meet up with Joe of RateBeer last weekend - a fortuitous encounter considering the "recent" transaction that went down. And of course I use the term "recent" loosely because as you know this deal went down 9 months ago, but we just found out about it recently.

    I do like personal meetings best so you can hash out things face-to-face. The takeaway for me is that Joe really didn't have a legitimate answer as to why there was such a delay in the time the transaction occurred, and why there was not an immediate press release issued. He did tell me that numerous craft breweries bring on minority investors and don't issue a press release, and the fact of the matter is, he is absolutely right about that. However, I pointed out to him a critical distinction - these minority investors brought on by craft brewers are usually friends and family, and are not other brewers themselves. If another brewery bought a stake in a brewer, a press release would most definitely be issued. And if this minority investor was AB-InBev, there most certainly (without question) would be a press release issued.

    That critical issue was just one of two main issues I've had with this transaction since the start. The other issue, of course, is that this is a site that purports to reflect consumer views regarding beer, and if that website itself is owned by AB-InBev, there is a serious conflict of interest and the impartiality is fatally compromised. While I was assured by Joe that there are "firewalls" to prevent any tinkering with the data to benefit AB-InBev, I also learned that AB-InBev has a path to control with RateBeer.com. While I knew from the start they would, as major corporations almost always demand a path to control in their investments. This is very similar to what Heineken did with Lagunitas - buy a portion (half) of the company to start, and then exercise an option down the road to buy the remaining stake. Hence, a path to control. Not atypical by any means, but does go to show that eventually all of the data of RateBeer.com and the entire community of users could/will be owned by AB-InBev.

    That's all I have for now. I stand by what I said from the very beginning - I think the burden of proof is on Joe and the new owners to reclaim their lost equity and credibility, and not on the beer consumer or site user to demonstrate a case for impartiality here. I think the craft community is watching, so it would be nice to hear from them with an official press release addressing these issues once and for all.
     
  26. EvenMoreJesus

    EvenMoreJesus Devotee (472) Jun 8, 2017 Pennsylvania
    Supporter

    Exactly.

    Thanks for the update!
     
  27. Lone_Freighter

    Lone_Freighter Poo-Bah (5,168) Jun 4, 2017 Vermont

    Most rationally thinking people would agree with this. I can't see why anyone in their right mind would think otherwise.

    Somehow Joe learned how to use "corporate speak" to basically assure you nothing. Now that AB highjacked a rating system, how can any true "craft beer" brewer in their right mind stand with this nonsense?
     
  28. lordofthemark

    lordofthemark Aspirant (290) Jan 28, 2015 Virginia

    Is Dogfish head going to ask that their beer no longer be covered in the Washington Post, because Jeff Bezos owns it?

    Or any publicly traded medIA corps, because ABI might have bought a minority interest?

    I have to say the burden of proof is on those claiming there is something nefarious.
     
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  29. EvenMoreJesus

    EvenMoreJesus Devotee (472) Jun 8, 2017 Pennsylvania
    Supporter

    I think there are multiple burdens of proof here. JoeT for why the announcement of the investment took so long. Everyone else for every wack-a-doodle theory that they come up with.

    Would be nice if there was there was more transparency, but in a deal like this that's never going to happen. I think that a general "why?" would placate a lot of people.
     
    Loops likes this.
  30. HouseofWortship

    HouseofWortship Disciple (316) May 3, 2016 Illinois
    Beer Trader

    If Jeff Bezos purchases a brewery and then turns the Washington Post into a beer review site, then yes.
     
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  31. lordofthemark

    lordofthemark Aspirant (290) Jan 28, 2015 Virginia

    Jeff bezOS owns Amazon, which justhe bought Whole Foods, a major beer retailer. Amazon may expand beer delivery. The Washington Post has articles about beer, including, I believe, reviews and recommendations from time to time.

    By contrast, Joe does not review beers, he just aggregates ratings by users.
     
  32. MJS08

    MJS08 Aspirant (257) Jul 29, 2014 Florida
    Supporter Subscriber

    I always visit the Washington Post, Amazon, and Whole Foods websites for awesome beer reviews.
     
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  33. cavedave

    cavedave Poo-Bah (2,257) Mar 12, 2009 New York
    Beer Trader

    And supposedly uses those reviews as a basis for his brewery ratings, which we now know is all busllshit.
     
    MJS08 likes this.
  34. Todd

    Todd Founder (5,534) Aug 23, 1996 California
    Staff Subscriber

    Would it be nice? Because they'll have had plenty of time to analyze the backlash and fabricate a story that's specifically designed to target and quell your concerns. And simply telling you what they think you need to hear won't negate the underlying issues and irrevocable damage.
     
  35. Sixpoint

    Sixpoint Poo-Bah (1,592) Jul 25, 2004 New York
    Supporter Subscriber Industry Beer Trader

    I'd have to agree with you that at this point, it would probably seem like any press release is contrived and too little too late. But an official statement from the company detailing what steps they are taking ensure their fans/users/customers that there is no conflict of interest would be a good faith move.
     
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  36. JackHorzempa

    JackHorzempa Poo-Bah (3,067) Dec 15, 2005 Pennsylvania
    Supporter

    I think they should do this because it is the right thing to do. Needless to say but providing a press release announcing this deal last fall was also the right thing to do.

    It just seems that RateBeer has little to no interest in doing the right thing?

    Cheers!
     
  37. LambicPentameter

    LambicPentameter Meyvn (1,471) Aug 29, 2012 Michigan
    Beer Trader

    You just mentioned using BA scores as a matter of showing "good faith" to your customers. But you have no qualms about using RB scores when you need to push product?

    Pardon me if I'm misunderstanding you, but that doesn't seem terribly "good faith". It sounds like at the end of the day, you need to run a successful business. Which I have no objections too. It was just an odd juxtaposition.

    I'm beating a dead horse here, but while there is certainly a conflict of interest, people keep talking about the idea that ABI beer scores will go up with complete conviction. And I'm not denying that ABI would have the capability to do this, should they deem it worthwhile. I just don't think their bottom line is significantly improved by such an action.

    I have a hard time believing that a multi-national corporation sees Rate Beer as nothing more than a backdoor way to "cook the books" to favor beers they produce. If that is how they are thinking, they have absolutely no vision and are only going to continue losing market position.

    I'm going to need you to show your work on how a company gets from "30% global market share" to "controlling the prices of hops worldwide". That's a gargantuan leap.

    Again, I think we need at least some explanation for how this is going to happen.

    Wiki: "illegal"

    Also: "bad strategy"

    Good lord that article was painful to read. So many words written over a statistic that I personally find completely and utterly useless. Obviously, BeerAdvocate also has an aggregate score for each brewer, although I suppose I always assumed it was just a mean score of all the beers for a given brewer, rather than some convoluted percentile expression as described for RateBeer. But I just don't see that as particularly useful. A mean of all a brewer's beer scores doesn't really tell me much about them as a brewer. At least a score of a single beer gives me a basic approximation of what people think of that beer. There's too much noise with an average brewer score.

    Yes, the timing of the whole thing was suspicious, but I suspect that the minimal resources are more of a factor than any malicious attempt to fake ABI scores to be higher than they should be.

    Given what I've heard about the Rate Beer operation essentially being a one-man show, this sentence from the article was particularly amusing to me:

    "It’s a little difficult for me to believe that RateBeer’s employees, coders and tech people would never have noticed a universal, site-wide alteration of all the Brewer Ratings outside of anything they intended"

    As someone who works in web development, you'd be surprised about the kinds of things much better staffed companies can miss about much more critical pieces of information on a website.

    As if the press release wouldn't have been panned as contrived and fabricated if it had been released when the transaction occurred. It's not like the backlash is a mystery--it's a pretty well known quantity at this point. It makes the decision (or mistake) not to do a press release all the more perplexing. Not doing one is/was ultimately far more damaging than anything they could have done or said by releasing one and facing the music up front with their fabricated story designed to target and quell concerns. FFS, that's what press releases are, for the most part--narratives designed to present a given decision in the most professional, positive light possible.
     
  38. OhBierdedOne

    OhBierdedOne Aspirant (215) Dec 12, 2012 Texas
    Subscriber

    Most of the major publications for wine ratings have a tasting panel of a dozen or so highly trained, seasoned wine proffesionals. As with the major crowdsourced beer rating sites, there still seems to be consistently higher scores with one over the other, but not to the same degree.
     
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  39. OhBierdedOne

    OhBierdedOne Aspirant (215) Dec 12, 2012 Texas
    Subscriber

    First of all, I love your username! I don't know that ABI would be dumb enough to try and run up the scores of their core brands, as their dismal reputation is too widespread (in the US, anyway). Such a thing appearing on product labels and shelf talkers wouldn't surprise me in new markets, or with new products.

    Losing market share as a giant who's business model focuses on volume over margins is an incredibly bad situation. I wouldn't put anything past them at this point.
     
  40. OhBierdedOne

    OhBierdedOne Aspirant (215) Dec 12, 2012 Texas
    Subscriber

    Agreed! I'm no techie, so purely speculation here, but it seems like doctoring scores through natural means (natural to the function of the website) by simply providing bloated scores would be difficult to track. When you consider "like farms," the deepest of pockets, a massive global workforce which could be incentivized to rate, and Boaty McBoatface... none of it seems too far out of the question.
     
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