John F. Kennedy, in an address to Canada’s Parliament, once remarked of America’s relationship with the nation to our north, “Geography has made us neighbors…. Economics has made us partners. And necessity has made us allies. Those whom nature hath so joined together, let no man put asunder. What unites us is far greater than what divides us.”
The relationship between Florida’s distributors and craft brewers admittedly got off to a rocky start when small brewers didn’t get the container size they wanted – and should have had – years ago. Things escalated when the Brewers Guild abruptly cancelled two consecutive meetings and put out an attack video. But it’s more critical than ever now to stop, take a breath, relax, and focus together on what unites us – and it truly is far greater than what divides us.
Because what unites us are the aggressive efforts to preserve market share by Anheuser-Busch-InBev, the world’s biggest beer company. Last week ABI announced plans to buy Elysian, one of the top brewers in the craft-friendly state of Washington – the most recent in a “buying spree”, as the Wall Street Journal described it, of comparatively small craft brewers including 10 Barrel, Blue Point and Goose Island. (Each of these brewers manufactures about 50,000 barrels per year.) ABI CEO Luiz Edmond last month told the Journal not to be surprised if ABI buys several more craft brewers (the very same Luiz Edmond who famously stated to the WSJ that he was loyal to his wholesalers and he expected them to be loyal to him).
The lesson to craft brewers and the legislature, as many of us have been trying to communicate for several years now, should be clear: ABI is losing market share to craft brewers – with sales volumes down nearly 9% in the last decade – and will not just roll over. More specifically, ABI will not allow itself to be put at a competitive disadvantage by specialty brewers seeking to bury the three-tier system under special exceptions.
What kind of response can we expect from ABI? The beer behemoth could buy some craft brewers in Florida and then leverage its economic power and market position to exploit retail exceptions and other loopholes. Such a move would blur the lines between craft and large brewers and allow the company to elbow into the craft market in Tampa, Jacksonville and other areas. While a small percentage of hard-core craft drinkers will know which breweries are truly local and which are owned by ABI, a large percentage of the local residents will not, and hardly any tourists will either. ABI will make sure of that by dipping into its deep pockets to scoop up the coolest taprooms in every city.
Craft brewers could fight back by convincing the legislature to base special exceptions solely on size, preventing ABI from infiltrating their space. In which case, as we’ve seen it in other states where ABI wants to own distributors, the company will resort to litigation, once again leveraging a massive war chest the small companies would be hard-pressed to match.
But there’s another scenario: Florida’s craft brewers and wholesalers could wake up and realize they are indeed united not just by geography, but also economics and necessity – a common competitor in the world’s largest brewer. We could work with influential, fair-minded leaders in the legislature such as Dana Young and Jack Latvala, and design a compromise that gives everybody what they need to continue under their current business models – without devaluing anyone’s investment in millions of dollars of storage facilities, trucks, brewing equipment and jobs.
This is the right path for both parties – and one being followed in other states where craft brewers and distributors are locked arm-in-arm to stand up to ABI.
But for craft brewers to recognize their strongest potential allies in business and politics are Florida’s independent beer distributors, they will need to get past an emotional sticking point: the “Big Beer” label they have attached to us. That label falsely conflates distributors with the major brewers.
In other words, although it has served as a successful public and government relations talking point up to now, distributors hardly represent “Big Beer” – and it’s high time that craft brewers set aside the phrase and the attitude it represents, and recognize that necessity should make us partners and even friends.
I hope the good folks at ABI will forgive my characterization of their plan – which is pretty obvious in any event. I understand that the company is obligated to protect its shareholders. My message here is to our potential friends in the craft brewing sector: if you want to dig a shallow tunnel under the three-tier system, the roof – in the form of ABI – will come crashing down on top of all of us. Believe it or don’t believe it— but don’t say I didn’t warn you.
Florida’s small brewers and distributors have too many common interests to continue fighting among ourselves, and the greatest of those interests is the consumer. We can be pro-consumer, pro-public health and pro-craft beer—together. We are natural allies, and to paraphrase JFK, those whom nature hath so joined together, let not past bitterness, pointless disagreements and outdated “labels” put asunder.