Yesterday, we published a cover story about concerns many smaller brewers have over various business practices being deployed by beer giant Anheuser Busch-InBev to regain Seattle market share that it is losing to craft beer.
Today, in very much the same vein, the New York Times published an op-ed by Bob Pease, president and chief executive of the Brewers Association, warning beer drinkers across the country about the repercussions of AB’s maneuvers.
As our story did, Pease notes that as AB acquires more and more beer labels—including Seattle’s Elysian—it is also acquiring more beer distributors as well.
“The company has … recently increased its control over the beer-distribution industry by purchasing five independent distributors (acquisitions that prompted a Department of Justice inquiry last fall). That means that Anheuser-Busch InBev can focus on building its own brands while effectively, and legally, shutting out competing craft brands,” Pease writes.
Those five distributors were concentrated Back East, but the Seattle market is not immune to the trend; in 2012, AB purchased K&L Distributors in Renton, which serves Seattle. Several craft breweries who had used K&L to sell into the Seattle market, including Iron Horse in Ellensburg and Ninkasi in Eugene, told Seattle Weekly that after AB bought the distributor, their sales began to flag and bars where their beers had once been available were quickly replaced by AB’s own “craft” labels.
One advantage Seattle has over other regions of the country—beyond a very strong independent beer scene—is that it has five distributors brewers can use to reach the market (assuming they don’t want to do all their distribution themselves.) As Pease notes, in some areas where AB is buying distributors, “most markets only have one or two distributors.”
However, the point remains: AB has a lot of resources at hand, and it’s savvy enough to know how to use them. Left to its own devices, Beer Big could tilt the market in ways that put small, locally owned brewers at a disadvantage.
As Pease writes: “America’s beer drinkers want choice. They want variety. They want quality and authenticity. As an industry, we need to give them that — but we can do so only if the market is a level playing field.”