UPDATE: Anheuser-Busch’s official response.
(St. Louis, MO) – Beer columnist/journalist, Jack Curtin, shared some juicy follow-up to last week’s Beer Business Daily report claiming that some distributors are refusing shipments from Anheuser-Busch. Curtin has BBD’s full write-up on Liquid Diet. Here is the excerpt, in particular, that resonated with one craft brewer that contacted BeerPulse this morning:
“As all wholesalers continue to expand their portfolios it is inevitable that most ABI houses will continue to pick up non-ABI brands. Since ABI can’t stop their wholesalers from obtaining the licensing rights to other brands the best thing they can do is overwhelm them with ABI inventory. This accomplishes two things. One, it eats up space in the warehouse forcing the wholesaler to control what it can control and cut inventory levels from other suppliers which leads to recurring OOS situations in the market and less competition at retail for ABI. That also makes it easy to say to Mr. Retailer ‘those guys can’t keep their product on your shelves, why keep them in your store?’ Two, it takes the wholesaler focus away from competing brands as they struggle to find ways to get all that ABI product to market before running into code date issues.”
What did the aforementioned craft brewer say?
I have seen this firsthand. I am in several ABI houses where they are stacked to the gills with AB product. These houses also handle Yuengling which has similarily high inventory levels so where does this leave brands like mine? Luckily, I am being sold by different sales forces but with common warehouse space. Now, they have to maintain focus on my brands but, at the same time, if the wholesaler only has room for 200 cases of one of my products but sell 300 cases a month that leaves a deficit. Since our brewery is a good distance away, we can’t get beer there fast enough. It just rubs me the wrong way.
Many craft breweries choose to go with the ABI network when expanding, as I did in parts of my area, because of their access to market. They are the big boy on the street and their wholesalers can get you to market faster than many other wholesalers because of this. This is not the case now as much as it was five years ago because of the power of craft but in rural markets, it still is the case.
So, by them forcing inventory they are effectively shutting out craft in any similarily shared warehouses whether or not they use the same sales force. They may deny it and may not be doing this intentionally but it is happening. If it was not their intention, then they succeeded in screwing the little guy without even trying.
And to think so much focus has been placed on declining shelf space availability at retail. Maybe the bigger story is declining space in those warehouses…
Anheuser-Busch has not yet responded with comment.