One Beer Article You Need To Read And Why, 2/21/17

In my job as a bar manager, I get to interact with distributors and brewers equally.  So, I’ve gotten to watch the fight to raise the distribution cap in North Carolina from an interesting position.  I’ll start off saying I support the fight.  The limit is unfair and arbitrary at 25,000 barrels.  Breweries should be able to decide on their own without state coercion whether to use a third party to distribute their beer.

However, until recently the rhetoric used by those pushing for the change has been…strident.  Most distributors do good work for their breweries and the way in which the arguments were made was off-putting.  The last few weeks has seen a media push by the Craft Freedom group and its supporters and this guest column is part of that.  It is forceful in its ideas however, it is slightly tempered from similar columns written a year ago.

If we are honest, the distributors who create the most anger and consternation within the brewing community are the ones who distribute ABI (AB-Inbev) and MillerCoors products.  Those distributors do things at the behest of the two big houses that are…shady.  The most obvious example is ABI’s incentive program.  They give cash incentives to distributors whose sales are 90% ABI products at the end of the year.  Sometimes in the last quarter of the month, your rep from that distributor will almost forget what is in their portfolio and tell you all about the wonderful ABI craft products that have gone on a little bit of discount.

Actions like that and the stultifying political climate in NC are why Craft Freedom and the breweries that spearhead raising the cap were so strident in the beginning.  What I believe happened is they heard from the other distributors in the state the political allies craft brewing has were told to tone it down a little and play up unfairness of having to sign with a distributor at the state’s behest while not slagging every distributor in the state.  Many of those distributors do good work on behalf of local breweries whose products may not deserve it.

If you talk to a distributor representative in NC who doesn’t have ABI or MillerCoors individually, they support raising the cap.  However, they don’t like the tone used towards all distributors.  They don’t feel it is fair to the work they do.  That and their, somewhat justifiable, worry that breweries will leave their portfolio without the specter of the cap make them hesitant towards supporting Craft Freedom openly.

When this cap is passed (it will be eventually), I don’t believe much will change as far as the number of breweries going with a distributor.  The change will be strongest in the negotiations over the distribution contracts.  This balances the power in those negotiations by making sure both sides are coming to the table of their own free will and not with one side having a legal sword of Damocles hanging over their head.