Government Corruption?

Government corruption. Yeah, that’s an attention grabbing headline for sure. We can debate about whether the story I’m about to share represents corruption, greed, or just how the system works. But whichever it is, it is wrong.

We have all heard stories about big corporations donating money for access to politicians. I always thought that was hyperbole and an exception to the rule. Silly innocent me. Acting as President of the GA Craft Brewers Guild last legislative session opened my eyes quite a bit. I watched as the Guild’s bill that advocated for breweries to be able to sell a limited amount of beer the to the public went through the process of becoming a law. And along the way, as everyone had their hands on it, the bill went from selling one case to giving away one 6pack for free. It was still way less than breweries in 48 other states could do but at least we made some progress.

On July 1st I proudly watched as the first few 6packs went out the front door with consumers. Even though they were technically souvenir packages and not for sale, I still thought GA was coming into the modern era. Little did I know how wrong I was.

At the beginning of October, the GA Dept. of Revenue released a bulletin that changed how the law that went into effect on July 1st would operate. Originally a brewery could charge different prices for tours that included souvenir beer. As an example Terrapin offered 3 choices: 36oz maximum on premise for $12, 72oz maximum to-go for $12, or both options for $20. But the new rules meant that we had to choose between charging everyone $12 and giving everyone the to-go beer (losing money in the process) or charging everyone $20 whether they wanted the to-go beer or not (losing customers in the process). If any brewery was cited for charging variable prices based on the beer provided, the brewery would lose its taproom license for one year! And that is just for your first offense!

Of course GA breweries were upset over that new ruling. Many of us had spent lots of money building out tasting rooms and getting ready to work within the law that we thought had passed. The DOR had given us WRITTEN assurances the variable pricing model was approved and allowed. Then out of nowhere – BAM, they changed their minds.

Here is where the corruption comment comes in. One of the most sacred principles of governmental ethics is that everyone has equal access to government officials. That’s a no-brainer. Maybe the government rules in a way that goes against your interests but at least you had the same opportunity to be heard as did the opposing side.

But not in this case. An open records request was filed with the DOR and it was shown that while they were creating rules that affected how breweries could operate their businesses, the DOR was in discussions about it with the GA Beer Wholesalers Association while at the same time refusing to tell the GA Craft Brewers Guild the potential new rules were even being considered. Let me repeat. When debating rules that affected breweries, the DOR refused to interact with the association representing the breweries that were affected by the new rules. Instead the DOR was in constant communication with the association representing the wholesalers, whom the revised rules did not affect.

Here is the link to the entire AJC article about the Open Records request and its findings.

Here is a link to your GA State Senator and Representative to give them your feedback.

What do you think. Can unequal access be equated to corruption?

 

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Does Craft Beer still Exist?

After reading about Ballast Point being acquired for $1 BILLION, I wondered, “Does Craft beer as we know it still exist?” My second thought was, “Should anyone even care?”

My answer to whether craft beer still exists? Hell yes, craft beer still exists. But not in the way everyone thinks. Craft Beer is not defined properly. Which is why several well known brewery owners around the country have recently said the term “craft beer” is becoming meaningless. Look at the comments Saint Arnold’s Brock Wagner made last month. Similar statements are happening daily and they are spot on.

Why the confusion? Because the American beer geek considers craft to be anything that is not AB or MillerCoors. Having good beer does not seem to matter. Being truly small and local doesn’t really matter. Just don’t be associated with the largest American brewers and you are craft. Easy-peasy. But recently, as more and more craft breweries are enjoying huge successes, some are choosing to join with the larger, non-craft brewers. So breweries like Goose Island, Blue Point, Elysian, 10 Barrel, Golden Road, and St Archer were craft one day and then POOF, the next day they are not. Even though these breweries are still the same people making the same beer with the same equipment in the same location.

But wait. It gets even more complicated. There are also many international brewers that are not AB or MillerCoors. So when companies like Boulevard and Firestone-Walker sell to Duvel Moortgat, when Founders sells a portion of equity to Mahou San Miguel, when Lagunitas sells a stake to Heineken, and when Ballast Point sells to Constellation Brands, are all these brewers still craft? Even though they are not associated with Bud/Miller/Coors? Again, it is still the same people making the same beer with the same equipment in the same location.

No wonder the term “craft beer” is losing its meaning. It’s a very loose definition to begin with. So how would the gospel according to John (Cochran) define craft beer? To me it’s about volume.

The Brewers Association defines a craft brewer as being small if they produce under six million barrels per year. For perspective, six million barrels is 1.9 billion bottles of beer!  A brewery can make 7.6 million bottles of beer per day and still be called craft? Seriously?

Here is my request of the Brewers Association. Let’s quit talking about craft beer and go back to encouraging everyone to support their local microbrewery. And let’s redefine microbrewery to mean up to 50,000 barrels per year. I say if craft is defined by being small then it should refer to those who are really small. The guys and gals who are still struggling to get from 500 barrels to 5,000 barrels. Or 10,000 barrels to 25,000 barrels. The ones who are not yet getting a paycheck and have their life savings and their homes at risk if anything goes wrong. The brewers who don’t know whether they can meet payroll, pay the power bill, or even if they will be open next month. These are the true craft brewers of today. The microbrewers.

And once you grow past 50,000 barrels like Terrapin is doing this year, then what? What about DogFish Head, Bells, Sweetwater, Harpoon, Sierra Nevada etc, etc. I could list 100+ more that are no longer microbrewers. And good for us. We have the battle scars and the memories of what it’s like to be on the front line of growing a new business. We used to be those guys. And we found a way to survive. Am I saying it is easy now? No, we are still busting our asses every day. More so than we used to in lots of ways. But guess what. We are no longer in the same business as the much smaller brewers. Sure we all make beer. But we don’t have to fight to get distributor’s attention any more. Now the distributors are calling us wanting to carry our beers. The retailers are finding space to fit our beers on the shelves. We know we will be in business next year. We are succeeding.  So does it really matter whether one or the other of us is still a craft brewer?

Should we care if the term “craft beer” still exists? Maybe/maybe not. Maybe it will all become beer. But no matter what it is called, here is what matters. Everyone should like the beer they are drinking and drink the beer they like. AND everyone should support the local brewery that is contributing to worthwhile causes in their community.

Personally I don’t really care whether Constellation Brands owns Ballast Point. There is a Sculpin in my fridge now and I will still drink it because I like Sculpin. But at the same time you can be damn sure I am going to buy beer from the local guys that are producing it here in town and are helping to raise funds for the local shelter. We do good by supporting good.

Is craft beer as a term still relevant to you? Let me know what you think.

Cheers, John

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Take beer home from the Brewery!?!

Some cool events are happening at Terrapin this week. They even include the opportunity to take some special beer home with you when you leave. Which unfortunately has become a very rare thing in GA, even though it was supposedly made legal in July (sort of – wait, they were just kidding). If you read through Joel’s account of the history of SB63 in the “just kidding” link and want to know what you can do to help, Step 1 is to:

Celebrate GA Beer Day (visit your local GA brewery!!!) later this week. Lots of GA breweries doing events and raising money for the GA Craft Brewers Guild. For Terrapin’s part we are doing a special tour on Thursday November 12th and filling growlers of many of our delicious beers.

Help celebrate our first Ales from the Wood release. The Richland Reserve Release Party will be November 15th from 1:30pm to 3:30pm. We’re doing a tour for $30 that will include a special glass and a 22oz bottle of Richland Reserve on top of the tour and tastings you’ll enjoy while at the brewery! For anyone missing our Hopzilla, get excited, because this beer is Hopzilla aged in Richland Rum barrels! Terrapin Brewmaster Spike Buckowski and Erik Vonk from Richland Rum will be here talking about the beer, the Terrapin & Richland Rum partnership, and the barrel aging process.

 

Wake ‘n Bake Release Party will be on November 17th from 5 to 7pm! The $25 release tour will include a custom snifter glass with both the Terrapin and Jittery Joe’s logos, 36oz of beer in the tasting room, a 12oz can of Wake-n-Bake coffee, AND a 12oz Wake-n-Bake beer to go! To add to all of that there will be Wake-n-Bake on tap, last year’s French Toasted Wake-n-Bake on tap, live music, sweets provided by Jittery Joe’s, and ice cream for making tasty Wake-n-Bake floats.

So whether it’s November 12th, 15th or 17th, come out to Terrapin and take some tasty beer home with you!

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Could the AB/SAB merger actually help Craft Beer?

Since the potential merger between AB-Inbev and SABMiller was announced, several pundits have given their opinion on how this is going to affect craft beer in the US.  There is a lot of doom and gloom so I figured it’s time I add my voice to the mix. Here goes: I don’t believe the demand for craft beer in the US will be affected. At all. In a weird twist, the merger could even be a good thing by increasing demand for craft beer. More on that strange reasoning in a moment.

The true definition of “Big Beer”.

First, here is how the merger is expected to play out. Stats show that AB-Inbev controls around 45% of the total US beer market. Since there is no conceivable way the Department of Justice will allow the US business of SABMiller to be added to that 45% due to anti-trust laws, AB-Inbev will likely be forced to sell off the US portion of their new acquisition.

Currently all SABMiller products in the US are sold through MillerCoors, a joint venture that exists only in the US between SABMiller and Molsen Coors. Since they are already invested heavily in this joint venture, many assume Molsen Coors will be the likely purchaser of all SABMiller products in the US. Which effectively means that it will be business as usual for MillerCoors. They will simply become 100% owned by Molsen Coors instead of half owned by Molsen Coors. They will sell the same products to the same distributors through the same retailers to the same consumers. Nothing changes on that front.

Except for one thing. And this is where the strange reasoning about the merger being good for craft beer comes in. “People take beer very personally,” Brewers Association director Paul Gatza told Melissa Stanger of Business Insider. “When something happens to their favorite beer or their ability to get it, or something helps or hurts a brewer they care about, they internalize it and want to do something about it. People may see [the merger] as a time to rally around their local brewery.”

Here’s the thing. There are now over 4,000 craft breweries in the US with another 1,800 or so planning to open in the next year. Craft beer is growing at 16% per year and is expected to continue to increase market share for at least another decade. Maybe two. So the genie is already out of the bottle. People are moving in droves toward supporting their local brewery. A change in who owns half of Miller Brewing in the US is not going to stop that trend.

What do you think? Will the merger actually drive more demand for craft beer?

 

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