AB-InBev Harms Craft Beer, Even By Buying Breweries

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You may be thinking what is a nerPokemond and fitness blog doing talking about beer. Well, I am fitness geek and I love beer, specifically craft beer. I’m a beer nerd. I love talking about beer, drinking it, discovering new beers. I have a belief that my favorite beer is the beer I have never had before. To me, beer is like Pokemon, I need to catch them all.

Not many of you may know this, but I was born and raised in Tempe, Arizona, home to Four Peaks Brewery. I was drinking Four Peaks beers probably before I should have been. Their brewery was located right near my alma mater, Arizona State University, and once of age, it was a standard spot to which I would go. So imagine my dismay when I found out they had been sold to AB-InBev, aka Budweiser (I’ll be using the terms Budweiser and AB-InBev interchangeably). If I’m breaking this news to you, please check the story out here.Four Peaks 2

Now, I’m not belittling Budweiser. I firmly believe that there is a time and place for every beer. For example, I’m not going to drink a 10% heavy stout while golfing in 110-degree weather. I’ll gladly gulp down a Coors Light or even Bud Light Lime. I often said BLL was better than it deserved to be. Well, at least I’d used to gulp down a BLL. AB-InBev has recently come under scrutiny for its distribution practices. Please read here, here, and here.

To save you some time, the gist of the articles is that AB-InBev is offering discounts to distributors that carry nearly 100% of its brands. Essentially, they are offering up to 1.5 million dollars in reimbursements if its beers make up 98% of the distributors sales.

This is important because distributor sales essentially determine what a retailer (your grocery store, etc.) carry. And that determines what products are available for you to buy. So if distributors are only selling Budweiser products, the only products you see are Budweiser and thus, it’s your only option, without having to find a specialty store. This is critical because a majority of this country’s beer sales are in grocery stores or convenience stores and not Total Wines or Bevmos. This limits the ability of your local craft brewer to get shelf space or tap handles in your favorite store or bar. If a craft brewer can’t get on the distributors truck, they can’t get to a majority of consumers.

After hearing about what AB-InBev was doing with distributors, I made the decision to never buy anything that was sold by AB-InBev. Once I went down the click-hole, I found out this was so much more than just beer. For a nearly full list, check Wikipedia, here. So now that Four Peaks is owned by AB-InBev, I’ve decided to stop drinking it. Which is rough when it played such a role in my formative, college years.

One of the world’s best beer minds may disagree with me. I met Zach Fowle when he was working at World of Beer, also in Tempe, Arizona. He is always extremely knowledgeable. In fact, numerous times, I asked him to put together a 6-pack of beers based on what he has seen me drink. He has never missed. I loved every beer he picked out. He recently wrote an article for the Phoenix New Times about the Four Peaks purchase. Please take a look, here.

Oooooo shiny and new

Oooooo shiny and new

His arguments are sound. Four Peaks will be able to afford new equipment. They won’t suffer from any expected can or hops shortage. Mainly because AB-InBev has first rights to aluminum and they have massive farms where they grow their own hops. He also says Four Peaks will be found in more places. This is great news to people who love Four Peaks beer.

But at what cost? Four Peaks can already be found in most bars and grocery stores in Arizona. And now they get to expand out of state! However, instead of taking shelf and tap space away from AB-InBev, they will be cutting out the other, smaller, craft breweries that can’t afford to give such huge discounts to distributors. It will be harder for you to find that next up and coming brewery. Or, in other words, the next Four Peaks. Zach says there will always be a spot on the shelves for the small guy. Maybe one or two small guys, but not many if AB-InBev controls 98% of the shelf space.

So I have decided to stop drinking anything AB-InBev, including Four Peaks. Some may be thinking this is harsh of me. I mean, what’s the goal of every business? To grow and make more profit. Let me say that I think this was the right move by Four Peaks. They worked hard for decades and now they get to reap some of the financial reward. I am just choosing not to be a part of it anymore. Everyone has to draw their own line. This one is mine.

Four Peaks 3A friend of mine was trying to reconcile this. He approached this from a local economy perspective. Four Peaks pays their staff well, and it is a great service job for college students. His argument is that as long as he goes to the brewery to support the local economy he isn’t taking part in the shady distribution aspect of AB-InBev. I have to agree with him mostly. It’s great to support the local economy and see local business do well. Also, if Four Peaks closed its brewery doors, those college kids would feel the brunt of it. However, that’s his line. There isn’t anything wrong with it. For me, I just can’t do it. I think if we all started supporting Fate Brewing, or Wren House Brewing, they would grow and also help the local economy.

Some of you may even be thinking, “But this is what capitalism is about! The free market.” I can acknowledge those arguments but disagree. AB-InBev has an unfair advantage because they have the money to control the distribution channels. Craft breweries don’t. It’s not that they have the money and are choosing not to. They, literally, do not have the money to make similar offers. AB-InBev knows that and is taking advantage of it. It’s questionable if what they are doing is even legal, let alone ethical. (Check out the articles above, they address some of the legal issues)

I’m not opposed to others drinking Four Peaks, I’m not opposed to people going to the brewery for dinner. If you want to drink Four Peaks because you like it, perfect. If you drink Four Peaks to support the local economy, great. If you drink Four Peaks because of nostalgia, excellent. If you drink Four Peaks because it’s the only beer you’ve ever had, fine (although I think you should expand a little.) If you drink Four Peaks because you support craft beer, I hope this article changes your mind and you find a different brewery to support. Or at least an additional brewery to support.

I’m not heavily involved in the beer industry. I’m just a guy who likes drinking beer. I like trying different beers. I like seeing the little guy win. With Four Peaks, the buyout is a win for them. Now it’s time for me to find another little guy, another place to help grow. Zach Fowle tells us we shouldn’t shed a tear for Four Peaks, and he is probably right. They will be fine. I’m shedding a tear for other little guys that don’t stand a chance against AB-InBev. I’m shedding a nostalgic tear for all the good Four Peaks memories. I’m shedding a tear knowing I won’t ever have another Sirius Black.

So I’ve drawn my line. I’m curious where yours is. What are your thoughts?

–Kenny

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  1. Pingback: Beer Holidays – thefermentedsole

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