How could AB InBev do business ethically in order to earn your respect in the industry?

Reads 3702 • Replies 45 • Started Sunday, June 4, 2017 10:14:46 PM CT

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SpringsLicker
beers 3846 º places 156 º 07:21 Mon 6/5/2017

Come to the understanding that there are people out there who will never be "loyal" to one brand. I think if you put it to the community here that they could have a different beer every time but never get any of them again, or the best beer you ever tasted but only that beer for the rest of your life, most of us here will choose the former. They do not understand that way of drinking.

 
rlgk
beers 18840 º places 614 º 07:37 Mon 6/5/2017

I think this is a good read in order to understand how they work.
Its not like they love craft beer.
http://www.marketwatch.com/story/anheuser-busch-doles-out-beer-money-as-regulators-scrutiny-increases-2017-05-18

 
TheHOFF43
beers 2045 º places 169 º 07:40 Mon 6/5/2017

Originally posted by b3shine
MJ, if a man tried to kill your mother, what could he do to earn your respect? Because that’s akin to what AB-InBev has done to the craft beer industry. Over and over and over again.


I’d rather have my mother be alive then have access to craft beer. Call me crazy.

 
b3shine
beers 10579 º places 354 º 07:44 Mon 6/5/2017

Originally posted by TheHOFF43
Originally posted by b3shine
MJ, if a man tried to kill your mother, what could he do to earn your respect? Because that’s akin to what AB-InBev has done to the craft beer industry. Over and over and over again.

I’d rather have my mother be alive then have access to craft beer. Call me crazy.


Glad to see the analogy wasn’t lost on you, MJ.

 
obguthr
beers 8682 º places 22 º 07:47 Mon 6/5/2017

Stop practices that suppress and eliminate competition. They can’t and won’t because it goes against their core value: to make money by any means necessary. Some of you won’t want to hear this, but ABInBev is only part of the problem. The problem is capitalism. Its champions like to say how the free market keeps prices low and encourages innovation. Neither is true and never has been. Do you want better quality beer as well as other goods? Support regulations that ensure fair business practices and support true innovators. Sorry to bring politics into it, but that’s the true culprit, as I see it.

 
jlwalker20
08:52 Mon 6/5/2017

It’s always funny to me to read threads like these, because people have a genuine distaste for ABI and cannot effectively communicate why. There’s no love lost on my end for ABI - I played in the beer world and competed directly with them every day for shelf space. However, I cringe at the poorly-articulated arguments because they illustrate one really important issue in the "craft beer community": Beer nerds don’t understand ABI or their business practices, and they’re taking the moves at face value. Chris Herron (Creature Comforts, formerly of Miller and Diageo), lays it out very well, as he actually has macro experience: http://goodbeerhunting.com/blog/2017/5/5/watch-the-hands-not-the-cards-the-magic-of-megabrew

There are a few repetitive arguments that always get regurgitated, as I’ll outline below.

1. "ABI hates craft beer and the craft industry and wants to destroy it!" - This could not be further from the truth. ABI sees an insane opportunity to take back some market share (stifling losses) while dipping into those sweet, sweet margins. It’s important to recognize that the MARGINS on craft are much better than on American Light Lagers (a market in which packaging is more important to pricing strategy than the actual liquid), so having a strong portfolio of craft brands means they have a better shot at preserving profits in the competition with wine and spirits (this is where ABI’s brass has their eyes set, thanks to numbers like these: https://www.ft.com/content/5b7fab74-47a2-11e7-8d27-59b4dd6296b8). ABI doesn’t want to destroy craft, they want to be a player in craft.

2. "ABI has anti-competitive practices." - Well, you’re not TOTALLY wrong - they have played in a dirty sandbox in the past, with unsavory distributor incentive programs and distributor buyouts. However, they are not alone - craft brands have played similar games in the past - it’s more a bi-product of the competitive sales environment than anything else. Additionally, ABI is now the most regulated beer company on the planet and get their own special set of rules as a result - stuff like not being able to distribute more than 10% of their own product and needing federal approval for every brewery purchase they make moving forward. They are under the microscope, and you can expect them to look squeaky clean as a result, at least while that scrutiny is on. In the meantime, don’t confuse competitive practices (pricing strategy, for example) as "anti-competitive".

3. "But they spend all their money to legislate against craft!" - Again, not totally wrong, but there’s an asterisk here, too. First, craft brewers have been playing by separate rules for a while (everything from the way consumers are age-gated on the way into a brewer’s website to the ability to self-distribute and sell direct to consumer). There’s nothing inherently wrong with that, but it is unreasonable to expect ABI not to try and keep the playing field as level as possible with the resources at their disposal. Secondly, craft brewers legislate ALL THE TIME, and sometimes, they team up with ABI and other macros to do so! Hell, even the definition of "craft" has changed numerous times over the past decade to make sure the likes of Boston Beer can stay in the club. Again, there’s nothing really wrong with this, but it’s hard to take this argument seriously once these two little caveats are considered (and illustrates the worth - or lack thereof - of the term "craft", but that’s a separate discussion for another day).

The hop farm thing comes up occasionally, too, as that’s the hottest issue from the past month, however, it’s a bit overblown, too: https://www.beervanablog.com/beervana/2017/5/12/can-ab-inbev-restrict-the-flow-of-hops

If you’re going to hate on ABI, at least understand their situation, position and strategy.

 
SpringsLicker
beers 3846 º places 156 º 10:41 Mon 6/5/2017

They don’t mind you buying craft beer as long as it’s one of their brands. You want Wicked
Weed Sours -We’ll buy it! They still don’t understand the lack of loyalty to one beer for ever in craft beer drinkers. At best they can be the local go to beer when nothing else is available much the way Sam Adams has become at restaurants in many places today.

 
jlwalker20
10:54 Mon 6/5/2017

Originally posted by SpringsLicker
They don’t mind you buying craft beer as long as it’s one of their brands. You want Wicked
Weed Sours -We’ll buy it! They still don’t understand the lack of loyalty to one beer for ever in craft beer drinkers. At best they can be the local go to beer when nothing else is available much the way Sam Adams has become at restaurants in many places today.


They don’t need to compete for hardcore beer drinkers, though. that’s a drop in a drop compared to the money they’re trying to make. Sam Adams slays most craft beer producers, so I’m sure they’d be more than happy to be the go-to standby in most markets. In fact, that’s probably the point.

 
after4ever
admin
beers 8025 º places 322 º 11:37 Mon 6/5/2017

The objections aren’t entirely about ethics.

ABI wants to maximize market share. This is ethical.

ABI will do this by making life tough for the competition, by erecting barriers to entry and barriers to expansion. At the most basic level, this is ethical.

ABI does lots of things that are designed to "win" at the expense of their competition (including many of our favorite breweries), most of whom do not expect to ever have anything remotely like a commanding market share. Still ethical.

ABI lobbies legislatures and other governing bodies locally, nationally, and internationally, which is ethical.

All these things are prudent business. They’re also more expensive than virtually any independent brewery can afford to attempt.

They do unethical things--pay to play, price gouging, mandatory order quotas, monopolizing accounts, distros, suppliers, etc.

These things are NOT relative, nor a matter of opinion, with regard to ethics. Anti-trust/anti-monopoly laws exist for good reason. ABI routinely pays fines for just the things they get caught doing that violate these laws.

Bottom line, they treat market share like a competition, rather than the place at the table that a small brewery seeks. Think of it like sports teams you like--the teams that play fair and square are trying to get a win at the expense of your team, and the teams that cheat are doing the same thing, only in an evil way. You don’t root for any of them, regardless, if it affects the fortunes of your team.

Most small brewers aren’t trying to "win," because they expect they’ll never get big enough to dominate anything. So many independent brewers are more worried about trying to fill all their orders, and they can’t keep up. It’s a completely different scale, so the existential threat might sound silly--how could they be threatened? They have more orders than they can fill! But the threat is still real in the big picture.

There’s just no prospect of common ground here.

 
b3shine
beers 10579 º places 354 º 12:02 Mon 6/5/2017

^^^Great post. "Devour" is probably a better word than "destroy" when it comes to AB-InBev’s intentions with the craft beer community enterprise.