Letters from Belgium - Oct 23, 2003

Letter of an importer of BB to Zythos

Features October 22, 2003
Written by JorisPPattyn

Wilrijk, BELGIUM -

The following is a letter to the Belgian organization Zythos from an importer of Belgian beers...

As an importer of a number of Belgian beers, with contacts at numerous Belgian breweries, I want to raise an alarm specifically at your door, because I am convinced that your organisation (Zythos, ntransl.) could do a great deal in raising awareness, maybe even manage to stem the tide. What am I talking about?

I hear that many small Belgian breweries will be facing huge problems in the near future, which might well prove fatal to a great number of them. The reason for the constant thinning of the beerchoice in Belgium is called Interbrew. I noticed you have had already a streetmanifestation against their policy instigated at Aalst, so I assume you are aware of the problem.

The recent strategy used by Interbrew, to try to control the distribution, in order to establish a full vertical control of the Belgian market, kills off all possibilities of distribution of the products of independent familybrewers. Once the takeover of a major distributor realised, the smaller brewers are shown the door. In this way, Interbrew not only controls their breweries (1st level), but also the distribution (2nd level), as well as the more or less 20.000 pubs and restaurants tied to them (3rd level). This policy of acquiring the distribution has been hastened by the intervention of the European Commission, making the ties on pubs more difficult. It follows evidently that the second player on the Belgian market, Alken-Maes (=Scottish & Newcastle, ntransl.), immediately adopts the same strategy as the N°1, and hence is quite occupied buying up wholesalers.

This kind of vertical integration is illegal in the USA, the fact that large national breweries there have other means of favoritism notwithstanding. But the explosion of new breweries with an inimaginable power of imagination, in the creation of superb special brews, is perfectly possible in the USA, thanks to the ban on vertical integration.

After the multiple takeovers and following closures of many’s the brewery, with the disappearance of their special beers during the period from 1960 to 1980, Interbrew then conciously went on the path of contracting and tying the maximum number of pubs and restaurants. The acquiring of the tied pubs of all these small breweries was the only reason for the takeovers. Some breweries, as Van Honsebrouck and Huyghe (just to name those, but plenty of others besides), fell for the deceit of Interbrew by selling their pubs, in order to be able to concentrate on the brewing of their specialities, and leaving the sale of them in the hands of Interbrew, or by independent channels.

Abroad, as in the USA, Interbrew has concieved a policy by dumping their Belgian beers on the market at minimal to no profit. As an example, in the USA the price of the Interbrew beers haven’t been raised at all during the last five years - this in contrast to the fact that transportation costs have trippeled, and the US$ lost 20% of its value during the same period. In Belgium, OTOH, all beerprices have been raised annually.

In the USA, but also in other countries, as f.i. New Zealand, Interbrew tries to get hold of the monopoly on "Belgian Beer", by attempts to trademark the name of "Belgian beer café". Seen the fact that a brewer cannot own a pub in the USA, they have not succeeded so far, even after many tries, and still trying it on the moment of writing. Interbrew tries with all its power to have "Belgian Beer" identified with Stella, Hoegaarden and Leffe, and their ultimate goal is that other breweries, however Belgian, would be banned of using this denomination!
If your organisation makes a clear, steady and loud point against Interbrew, as well as relays the message to its sisterorganisations, as CAMRA in the UK, this thing will be known quite fast all over the world by beerlovers and beerpress alike. If Interbrew fears a negative reaction on their beers, both in Belgium as elsewhere, they might treat their fellow Belgian brewers and other Belgian beers with more respect. Maybe.

The Confederation of Belgian Brewers (BB) is, alas, not the right forum to fight this flood, because the contribution brewers have to pay is in accordance to their output! You will immediately understand that the BB organisation is dependent for more than half of its revenues on Interbrew. Because of this, number of small brewers have already renounced membership of BB, or try to organise events without any support from BB.

It is my opinion that Interbrew is the worst that ever happened to the Belgian brewing world (mine too, ntransl.!), because of the following reasons:

* starts with the takeover of small Belgian breweries, in order to close them and take over their portfolio of pubs;

* continues with the exclusive tying of as many outlets as possible;

* buying and subsequent closure of maltings, in order to prevent or to enhance the difficulties of getting special malts by independent breweries;

* acquiring the different distributionchannels to block the way for other Belgian breweries;

* selling their own products abroad at dumpingprices, again to make concurrencing by independents more difficult to acquire marketshare, let alone to grow;

* and finally, to try to acquire effective monopoly on the term "Belgian Beer".

I would very much appreciate to discuss these thoughts with you - I will never claim to have the full and only truth at my disposal - and I am open to other ideas. But the scenarios of doom I hear in Belgium, are of such a magnitude, that the Belgian beerculture is under direct threat of disappearing on the short term! The fame of our Belgian Beers abroad threatens to be annihilated by the continuing efforts of Interbrew.

The Zythos redaction knows the name of the author.

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