Why Budweiser’s practices are under federal investigation.
There is no doubt there has been an explosion in the craft beer industry. It seems the market grows exponentially every year from 354 breweries in 2005 to nearly 4000 in 2014. While this growth is a good thing for those of us who love these imaginative creative gems, it appears that the big kid on the block is more than a little nervous. So nervous in fact they seem to be resorting to one of the oldest tactics known to man, bullying.
That’s right, Budweiser and its parent company AB InBev are apparently spooked enough by the numbers that The Feds have taken interest in some of their alleged business practices. The overall beer market grew an estimated .5% last year with craft beers increasing 17.6% and capturing 11% of the U.S. market. Budweiser has bought out several craft breweries including Goose Island, Golden Road and Blue Point as they smartly should. They have absolutely every right to ETHICALLY grab their piece of the craft beer pie, and why shouldn’t they?
AB InBev has also incorporated some alleged questionable tactics to push craft breweries out of the market
If that’s how they went about trying to put a stranglehold on the beer market so be it, there wouldn’t be a problem. But, there is a problem. AB InBev has also incorporated some alleged questionable tactics to push craft breweries out of the market. In a vast majority of the country breweries are not allowed to sell their beers directly to grocery stores, bars and beer stores. They must go through a distributor to get their product out the public. There are roughly 500 distributors nationwide and of these AB InBev has begun to snatch these companies up, owning 17 at the most recent count. With the distributors they own allegedly they have either outright started to cut craft brews they don’t own out of the picture or are not offering these products on a level playing field with their products. There are also reports that with the distributors they do not yet own, they have threatened to pull their products if these companies do not stop offering craft brews.
If this is in fact the case, aren’t these tactics, minus the bloodshed of course, not all that dissimilar to the Prohibition era which Anheuser Busch should be all too familiar with? They sat handcuffed by the Federal Government and watched Al Capone almost exclusively take over the Chicago beer market using similar strategies. Fear. Intimidation. Bullying. In the modern era we go by the more politically correct name of anti-trust, but the theory is the same. While this is still very much under investigation it would appear AB InBev is trying to put a chokehold on small breweries by force rather than having a superior product to stand on.
The fact is this industry will continue to grow because of the passion that is behind it regardless of how the big kids push. I say to all the craft breweries out there, whether you are well established or just trying to get your foot in the door in this expanding industry, keep brewing good beer my friends, keep brewing.