The Big Bad Beer Lobby

The Big Bad Beer Lobby

Self confessed beer snob Brian Fitzpatrick looks into the global implications of the beer lobby in the USA

In the US the beer market is dominated by two companies, AB which in owned by the Belgium brewing giant Inbev and Molson Coors, which make up 93 percent of the beer sales in the US. AB controls about 50 percent of their market, with their two bid sellers being Budweiser and Bud-Light. Molson Coors is a joint venture by Molson who owns the Miller line and Coors, which owns the Coors line. Molson and Coors are separate outside the US but cooperate in the in order to be able to be competitive with AB. The remaining 7 percent of the market is held by the craft beer industry and imports. The craft beer industry in the US has been growing at a rapid rate from non-existent in the 1980s to growing at least 5 percent a year during the last twenty years.
For those who do not mind bland lagers served at exceedingly cold temperatures in order to mask the poor flavor that they do have beer lobbying is unimportant as the giants in the US have many times the funds and are therefore able to control much of the legislation regarding beer. However for those who enjoy a bit of variety beer lobbying is a serious issue that can restrict their choice or if craft brewers are successful provide almost limitless options. There are currently 1,800 craft brewers in the US and considering there was zero a the beginning of the 1980s this is astonishing, however there are still many laws that are restricting their growth and distribution.
Most significant is the three tier systems which means that breweries cannot sell directly to retail outlets but rather must go through a distributors. The AB and Molson Coors lobbing group’s (look up) main focus is to keep the three tier system in place. Practically this means that distributors will distribute either for AB or Molson Coors or will distribute as many other beers as possible. Further more AB and Molson Coors have another advantage in that they are able to control a large amount of self space and their for are able to offer their products in varying sizes of packaging and volumes and when they roll out a new product they are able to have it put on shelves across the country.
All this has the affect of limiting the expansion of craft beer of which the majority of the breweries are considered small businesses and therefore provide more of a direct benefit to the local economy as opposed to larger breweries. The American craft brewers association is their chief lobbying group with the main objective of having restrictions lifted. Most notably this is the three tier system but it also includes have states up the alcohol limit which they allow in beer, allowing for breweries to have a tasting room, and lobbing for small business tax breaks. The benefits of lifting restrictions is obvious while keeping them is detrimental as can be seen with the cases of the city of Asheville in the state of North Carolina and the case of Mississippi.
Asheville is a city located in the mountains of North Carolina with a population of 100,000 people, yet it has seven locally own and operated craft breweries. Mississippi however has a total of one craft brewery in the entire state. This difference results from the laws. In 2005 North Carolina change the amount of alcohol allowed in beer from 5.9 percent to 15 percent and Ashville lifted restrictions on breweries allowing them more direct access to customers and simplifying the licensing process. The result was a growth in number and size of breweries in Asheville which boosted the local economy through local sales and increasing exports to other parts of the state, other states, and outside the country. Mississippi on the other hand has kept its restriction on the amount of alcohol allowed in beer to 5.9 percent, which is largely a result of AB being on of the largest campaign contributors in the state therefore giving it significant lobbying power in the legislature.
The implications for the US is easy to see either selection is restricted of is able to expand. This is also the global implication. The US has become the country at the center of the rapid expansion of craft beer and the creation of new and innovative styles that push the boundaries of what beer can be. However is craft breweries are restricted in the US the number of American beers available globally will also be limited. The larger US craft breweries are able to make their beer available in other nations, including the Boston Beer Company (brewers of Sam Adams) Dogfish Head and Stone are all able to make their beers available at somewhat a global level. However the smaller a brewery is and the more they are limited in what they can export and therefore most craft breweries in the US are not able to expand to a point where they are able to export to other nations.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s