Tag: SABMiller

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Want this? Stop That.

For the mega-brew merger to go forward, along with divesting certain properties, it looks like the Federal Government also added some much needed assistance for smaller brewers. Whether it will be enough is another question.

1. The “Voluntary” AB Incentive for Performance plan is now shelved. This plan incentivized distributors who shut out brands that ABInBev did not want competing. The Department of Justice, in the settlement, wrote that it “prohibits ABI from instituting or continuing practices and programs that disincentivize distributors from selling and promoting the beers of ABI’s high-end and other rivals.”

2. Buying distributors is now capped as well. With ABInBev owning somewhere in the neighborhood of 7%, they will be barred from going over 10%. Which they more than likely will do.
Rest assured that the Brewers Association will be closely monitoring the situation. The group has been opposed to the merger of ABInBev with SABMiller from the get-go but, at least, there was some help given by the DOJ.

I have been of the opinion that if any of the industrial foreign owned breweries wanted to buy up little craft ones that it was sad to me personally but also part of the evolution into a new world of craft beer business. They could buy a brewery a month for years and not dent the overall numbers.

What I was worried about was that the beer that I wanted could be blocked from shelves or poorly handled by a distributor who was beholden to ABInBev or SABMiller. That blockage could seriously hamper the growth of a brewery.

Now we will see how well the rules are followed.

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Adding Anything Else? part 2

With the the fervor of a Christmas shopper in a combined Black Friday / Cyber Monday / Super Saturday addled craze, SABInBevMiller picked up three new breweries for its “High End” (for them) division. None of the lost tribe of breweries would cause a gnashing of teeth at the loss to the HE . No pick-ups that are more important than what evil the mega-industrial conglomerate could unleash in distribution and ingredient bulk buying.

In fact the important bit is that a pattern might finally be emerging out of their spending spree.

Of the seven American breweries, I would say that 10 Barrel (due to their brewing staff) and Goose Island (due to Bourbon County Stout and their sour program) could be considered top tier. The rest, especially with Dick Cantwell’s departure from Elysian, would be considered fair to a bit above average by your average beer geek. And other than clustering on the West Coast, that factor in their dating profile seems to be the dominant shared trait.

These willing victims are certainly High End for Budweiser but not for their respective states brewing scenes by any stretch. Even the two that I consider the cream of the crop Goose and 10 Barrel might be ranked in the bottom five of a top ten list for their state, Heck, I like Goose Island beers and I would rank them behind Revolution and Half Acre just in the City of Chicago alone.

It appears that the Belgian/Brazilian overlords are targeting the breweries that are big enough on quantity without being too high on the quality part of the equation. Maybe that makes the gulf between craft and light lagerland less a chasm for those selling. I think that the High End will evenutally be populated with those operations that can be understood by Bud marketers. A nano brewer operation or a brewery that doesn’t package in bottles and cans just are too far afield for SABInBevMiller to grasp.

In the long term though, I do not think that even the average craft brewery will be understood and effectively sold and marketed. The cost of buying barrels for Goose Island or financing second locations will eat into profits and will be ripe for cost cutting. There will be some economies of scale but not nearly in the dollar amounts that will be desired.

Just like the ill-fated dive into phantom craft brands that fizzled, this “High End” will eventually fade and the breweries spun off or closed (which won’t necessarily be a bad thing). There are obviously enough soon-to-be breweries to fill the gap. The bench talent is deep for craft beer.

The easier prediction to make is that more breweries will be bought in 2016.