One Beer Article You Need To Read And Why, 3/8/17

I thought this would be shorter since I got home late from closing the bar.  I was wrong.

This article is interesting not because the information is surprising. It isn’t and it has been out in the public for a week now.  What interests me is how the Craft Freedom group has changed its approach over the last two years.

When the group first started, it was a lot like Mr. Smith Goes To Washington.  There seemed to be a naïve belief that if they brought their case to the state legislator they would win hearts and minds with the power of their argument.  What they found was, yes, many legislators agree with them.  However, many of those same legislators get donations from the distributor/wholesale lobby and individual distributors.  Those legislators could not make the leap to pissing off major contributors.

What Craft Freedom has done this time is continue to lobby to the legislators, but they have also taken a more proactive media approach. They are attempting to go around the money to the people and appealing to them with a fairness argument.  They are arguing that breweries should have this freedom and to deny them that goes against our basic principles.  Of course, people vote against the principles and best interests every day. I think they can win enough votes to raise the cap to 100,000 barrels.

The unspoken part of this is what interests me most.  If and when this bill passes, how does that change the contract negotiations between breweries and distributors?  For breweries with large ambitions, this artificial cap at 25,000 makes it imperative that they sign with a distributor.  Unless you come into the negotiations with the buzz of a Wicked Weed, you are at a disadvantage.  You must sign with a distributor.  By raising the cap, you give breweries a little more leverage to make the distribution deals a little fairer.

NC beer distributors are not equal.  I suspect the opposition by the wholesaler’s lobby group is driven by a small number of large distributors and not the majority of their sales force or the smaller distributors that dot the state.  That is why I think their real opposition to the law isn’t the possibility of losing potential breweries, but to losing that contract leverage and opening the door for their big national beer companies to strike out on their own and open their own distributorships.

In the end, I don’t think the big distributors give much of a damn about whether Olde Mecklenburg, Red Oak, or any of the big self-distributing breweries who have shown no inclination to ever sign with them do once they hit 25,000 barrels. It is about keeping hold of that unfettered 20%-40% they can milk from every brewery that signs with them and keeping the “incentives” from the big beer companies flowing.

Now, I’m going to go read some of this.  I’m in heaven already.