Kirin Group's primary motivation for partnering with Brooklyn is to "learn" about craft and build craft segment in Japan and Brazil, manager of Intl Business Development, Managing Planning Dept and Corporate Strategy, Kazuya Horimi explained to CBN. That's "first priority." Currently Kirin holds roughly 25% of Japan's craft mkt with minority stake in Japan's largest craft brewer Yo-Ho (roughly 50K hectoliters) and its own Spring Valley Brewing (much smaller). Craft segment currently has about 1 share of total beer in Japan, but in Kirin's view that will grow to 3% by 2021 and eventually reach up to 5 share. Kirin expects to have half of the craft mkt by 2021 and believes Brooklyn will be "the front runner" to "establish" craft beer mkt in Japan. Consumers in Japan already know Brooklyn brand well, said Kaz.

Down the road there are oppys for Kirin and Brooklyn to find more ways to collaborate, natch. As cos mentioned in deal announcement, Kirin will be able to "support" Brooklyn's two big projects for Brooklyn Navy Yard operation and an eventual production facility. Then too, Brooklyn's intl distribution actually more extensive than Kirin's, in more than 30 countries. That could provide "a great chance" for "collaboration," said Kaz. Also gotta note, Kirin has stake in Australian brewer, Lion, while Brooklyn is currently partnered with Coopers for distribution there. "We have not yet decided anything in Australia," and "of course we see opportunity . . . but we understand" the current partnership in place. And Kirin is partnered with ABI for distribution in US, so similarly, no discussion of further collaboration in US at this point.

Overall, craft is still a "very tiny" portion of Kirin's overall beer biz, but Kirin clearly dedicated to expanding further into the craft realm. Eventually "we might consider additional partners" from around the world, Kaz acknowledged. But "in the near future," there's "much more opportunity" to introduce "our own craft beer brands" in Japan and Brazil. "We have already started the trial brewing of Brooklyn Lager" and initial batch got "quite positive feedback." There will be a couple more trial runs and everything is "on schedule" to launch Brooklyn Lager in Japan this Jan. Brooklyn will continue to export other SKUs like East IPA and "some other seasonal items" for now, and they'll "consider" moving more to production in Japan.

Kirin in Talks with ABI, Heineken and Local Co in Brazil? Similar JV in Brazil between Kirin and Brooklyn will launch next yr thru Schincariol Brewery that Kirin acquired in 2011 for $2.6 bil. Tho recall, Kirin booked a $1 bil write-down on the biz last yr. And just before Brooklyn deal announced, Kirin reportedly "began negotiating with three peers" in late Sep "seeking an ally to help turn around its foundering Brazilian beer operations," according to Nikkei Asian Review (see Sep 20 Express). It's in talks with Heineken, ABI, and local brewer Grupo Petropolis, sez paper, and "options will likely include working together on production and distribution or making Kirin's Brazilian subsidiary a joint venture." The "first priority" here is for Kirin is to "grow again," Kaz told CBN separately.  

Touting a plan to "disrupt the Massachusetts beer wholesaler landscape by offering breweries a like-minded distribution partner," MA craft brewer Night Shift Brewing launched Night Shift Distributing. Night Shift has used self-distribution model since its inception in 2012, sold 4200 bbls in 2015, according to BA stats, and told Boston Globe it's still on sked for 10K bbls this yr and "plans to double production next year" (see Jun 23 issue). Tho 75K cases, just a little over half of production, expected to go thru Night Shift's self-dist model, per release, suggesting other ~4500 bbls all sold thru co's taproom this yr. Recall, earlier this yr Night Shift got $3 mil loan to invest in brewery expansions and in Jul signed a 10 yr lease on 30K sq-ft warehouse in Chelsea, MA. The same warehouse space co will use for its distrib operation. It's invested about $1 mil on new distrib operations, prexy Rob Burns told Globe. Night Shift hopes to pick up "as many as 25" MA and out of state brewers. Rob is also prexy of Mass Brewers Guild, which has tried to change Mass franchise law for yrs. So as he set up new distrib co, he took many shots at existing distribs and system. (A version of this article appeared earlier today in Express).

"After watching wholesalers squash brewery efforts for [franchise law] reform year after year, we finally decided - it's time to work within the broken system to offer ourselves and our brewery friends something different," co-founders say in release. "The current system is anti-competitive, stifles innovation in distribution and creates a large barrier to entry for new distribution companies - we're ready to change that."

Night Shift offers: 1) "complete cold-chain life-cycle" for all brews; 2) a "contract we'd sign ourselves," ignoring "archaic franchise laws," with option for brewers to part ways; 3) no pay to play, "illicit discounting" or "gray area" activities; 3) lab-testing, (including "right to lab test the quality of every beer" it sells); 4) "fair and equal treatment of every brand," no sales incentives or commissions since "high quality beer will sell itself." In final shot to status quo and current MA distribs, Night Shift sez it will give "fellow brewers total brand control, superior beer treatment and a distribution partner that's working to alter the direction of today's monopolistic MA wholesaler landscape." Bill Kelley, prexy of Beer Distribs of Mass told Globe "we expect NSD will experience the challenges of running a multi-brand distribution business effectively…. While it's peculiar to see this announcement being used as a vehicle to attack the very industry they are entering, we are hopeful that one day" Night Shift is successful enuf to "be considered for membership" in BDM.

Coincidentally, Kelley and Burns took part in Brewbound's Brew Talks mtg earlier this week at Jacks Abby brewery in Framingham. Boston alc bev atty John Connell said state getting ready to name task force of 5-7 "people of learned backgrounds" that will review MA alc bev laws "top to bottom," from licensing to franchise law and more, Brewbound reports. That process likely to take over a year, but Burns said MA Brewers Guild will continue to seek franchise reform, saying "there should be an exit" when distrib relationship not working. Kelley said he's happy to talk. "We don't build walls. The beer distributors build brands."  

As AB reported sales-to-retailers down 3.8% in 3d qtr this morn, it also estimated that total beer industry STRs down 2.6% in qtr and it mentioned "slowdown in the craft segment" as a factor. However, its Goose Island and other craft acquistions continued to be up double digits. Asked about craft slowdown on conference call, ABI CEO Brito said craft "growing for past few years" is "very profitable" and "we like that a lot." ABI "very active within the segment" and "gaining share" there which is "very encouraging." While some "customers" (i.e. retailers) thinking about "how much more of an assortment you can carry" and consumers may "get tired of so much choice," Brito said "this is all speculation" and refused to opine on craft's future, with slowdown so recent, saying "it's too early to call."

Is "Game Over"? Did AB Win? Two longterm participants and sharp observers of craft scene offered unsolicited praise for AB's craft strategy to CBN in last few days. Both said that AB's acquisitions and disruptions in craft segment are "smart" and both even went further to say "game over" for many in craft. "The game is already over," said one decades long vet of scene. AB and MC "have won the battle." Another sr level craft exec also said "game already over in a lot of ways," but his reference was to the difficulty that new entrants would have now. There was "a reckless abandon" to craft's growth of last several years, he said, but now we're in another more difficult phase, which AB in particular has played smartly, he added.

AB Craft Thru Q3: Acquisitions +37% YTD Tho Volume Down for 12 Wks w/ Shock Top What do the numbers show? ABI's craft portfolio can be looked at thru a few different lenses, but one thing's clear: acquisitions are collectively driving growth. Just lookin' at 5 acquisition cos - Goose Island (+31%), Elysian (+64%), 10 Barrel (+45%), Blue Point (+11%) and Golden Road (+71%) - $$ sales are collectively up 37% to $93.3 mil in IRI multi-outlet + convenience data thru Oct 2. So trends still rockin' even after collective 5 pt slowdown in latest 12 wks. And last we saw thru Aug 14, Devils Backbone ($10.8 mil), Four Peaks ($5.7 mil) and Breckenridge ($2.8 mil) were up 44%, 25% and 4% respectively.

Yet Shock Top brand family slippin' further into the red. Its $$ down 15% and volume -18% for 12 wks, bringing YTD trends down 11% and 13% in IRI MULC. So altogether, Shock Top dragged total AB craft volume down nearly 3% for 12 wks thru Oct 2, now up just 2% YTD. Ironically, that's actually losin' share of IRI craft for the year. Editor's note: that's without including Ziegenbock, Redbridge, and Wild Blue Lager, which IRI includes in craft segment. Ziegenbock $$ up 46% YTD while Wild Blue Lager and Redbridge down 8% and 16%. Included, they improve trends about 1 pt for 12 wks (a little less YTD), so still down for period either way. 

Craft volume slowdown in IRI/Nielsen scans and Guestmetrics/Nielsen on-premise reports got a lot of attention in recent mos, here and elsewhere. At same time, everyone knows, and TTB data shows, that taproom biz and other unreported craft volume much stronger. Pondering extent of Q3 "slowdown," BA economist Bart Watson did deep dive into current trends and suggested BA-defined craft growth near 7.6% this yr, just slightly off the 8% 1st-half growth pace Bart reported earlier in Jul, tho well below 13% growth last yr.

How did Bart get there? He broke out estimates for 2015 off-premise, on-premise, TTB's "premises-use" number (which would capture taprooms), "other" brewery sales and export volumes. He then looked at latest reported trends in IRI (for BA-defined craft), GuestMetrics and TTB and "penciled in" a few estimates. Turns out that even with scan data slowing to mid-single digit gain (and slowing further in most recent scans) and reported on-premise trend going negative, 60% jump in taproom biz and 40% jump in other brewery sales mean "craft appears to be on a roughly similar growth pace after Q3," as it was in first half, +7.6%. Bart's calculations suggest that sales at breweries could provide close to 1 mil bbls of growth, for well over half of segment growth this yr. Coincidentally, we did informal, back 'o the envelope calculation based on Nielsen data thru early Oct, revised to exclude Blue Moon/Shock Top/Leinie losses and came up with 7% or so gain. We figured BA-defined craft trend lower than that, given BA includes Yuengling (down slightly) and excludes several fast growers (Lagunitas, Founders and Ballast Pt). Yet, solid pop from taprooms, newbies suggested to us that "8% may still gut out."

Bart on Seasonal Softness, On-Premise Challenge Bart's review of Q3/YTD also included some notable comments on geographic trends, seasonals and on-premise. State data from IRI suggests "we may finally be seeing the catch-up between leaders and laggards [in craft's share of total beer] that has long been in the making." Net-net: craft growth slowing in high-share states but still strong in lower-share states. "Future craft growth," Bart suggests, may entail "lots of hard work building markets in parts of the country that have lower craft share." Regarding seasonal softness, "it's pretty clear that the bloom is off the pumpkin." IRI shows BA craft seasonal volume -8.5% for 8 wks thru Oct 2. Ain't just pumpkin effect tho. "Seasonals overall appear to have been harmed by the tremendous variety available to craft purchasers," Bart suggests. So much new news in craft now that latest seasonal not as new as it used to be.

Lookin' at on-premise, Bart cited govt data that suggests consumers are in fact still going out and spending is up, tho possible there's been shift to food, away from drinks. Could also be that reported data not capturing some of the growth. But even if on-premise "doing better" than reported figures suggest, "that really hasn't helped beer," Bart believes. "Remaining culprit" is familiar: "competition from wine and spirits." Cocktails have built-in "innovation advantage" as bartenders can always whip up something a consumer's never had. Put that together with millennials' craving for "variety and new experience" and that's big beer challenge. What's the answer? Possibly food-beer parings, possibly "beer cocktails," possibly something else. No simple answer, sez Bart, "but it's more clearly a problem than it has been." And since craft is largest on-premise beer segment, "craft brewers will need to lead the charge."  

Just a week after Dogfish Head announced its CEO Nick Benz would depart, another CEO from an even larger craft co made similar move. New Belgium's Christine Perich "will depart" by "end of November," to "pursue new opportunities and in the interim enjoy additional time with her family," co announced late today. In Christine's 16 yrs with NBB, she served as co's CFO, COO, prexy and most recently CEO after being appointed just last Oct.

Recall, after NBB finished 2015 with a tuff 3% decline, co improved thruout Christine's first year as CEO, both thru new mkt expansions and with new hit brand Citradelic IPA. As recently as late Aug, co said depletions were up 7% YTD and up mid-20's in Aug (see Aug 26 issue). "We appreciate - and will miss - her many contributions," said co-founder and exec chair of the board Kim Jordan, but in the meantime, "we are fortunate to have a strong executive team that will keep us focused on our immediate plans. The team has sown the seeds for some really exciting projects in 2017 and we are excited to see those bear fruit." So "day to day planning and operations will be handled by the executive team while New Belgium considers candidates for the position," per release.

Christine marks the 9th ceo change among top 20 craft brewers since last summer, including NBB 2x. Both Christine and Nick Benz left to spend more time with their families, according to the companies. Perhaps that's just another way that craft companies are becoming more like other companies. Christine was co-founder Kim Jordan's handpicked successor, so her departure strikes a somewhat discordant note, especially since NBB biz improved in 2016. They worked very closely together for many years. Earlier this yr, NBB considered strategic options including a sale, with several bidders, including Spanish brewer Estrella Damm, apparently the last one left at the end. But ultimately NBB decided to continue as 100% employee-owned. Co-founder Kim still very involved in co she co-founded.  

Plenty of folks still see oppys in craft, if they've got the capital. That's no worry for AB-owned Devils Backbone, natch, which continued with existing plans to expand its Outpost production facility. Recall, it was rarin' to start project when deal announced (see April 12 issue), tho DoJ didn't close review of deal until early Sep (see Sep 6 issue). That expansion involves doubling size of nearby building to "house all our shipping and receiving," director of ops Josh West told local WDBJ. "We're putting expansions on top of expansions at this point," he said, expressing hope that current project "is going to be big enough to satisfy our needs," as it looks toward eventual 250K bbls of capacity. DBB eyein' 75K bbls total in 2016, Josh told paper, about 21% over 62K bbls DBB shipped last yr. Tho gotta note, that's a fair amount behind ~95K bbls Steve Crandall and co expected earlier this yr.

Out in California, couple of experienced craft personalities laying down plans with new folks, betting that Calif drinkers will take 'em as they are, not connected to bigger, well-known outfits. Co-founder of Golden Road and longtime craft-focused restaurateur Tony Yanow takin' next steps to use "some of his hard-earned Anheuser Busch money" and open new brewpub north of LA, as Eater wrote. Unnamed project targets a late-spring, early-summer 2017 opening. Around the same time, "Dr." Bill Sysak will open up Wild Barrel Brewing further down Calif coast in San Marcos. Outfitted with 15-bbl system, brewery promises extensive barrel program, a line of fruited "San Diego Weisse" sours, plus plenty of IPAs, rotating local-roaster coffee stouts and "a 'crushable' Belgian Wit," according to release. "Dr." Bill most recently spent 7 years as a brand ambassador for Stone, often promoting and educating about beer and food pairings. But he's been in biz almost 4 decades now, and "excited to officially announce this project I have been working on over the last couple of years."

Inns, Taverns and Barns, Oh My: Stoneyard, Gun Hill, Bushnell Outside of Rochester, NY, lots of plans moving forward at same time for young Stoneyard Brewing. It recently opened brunch-spot Stoneyard Breakfast Co while building out 20K sq-ft production brewery and just finalized plans to turn just-purchased site "into a small inn with a patio on the [Erie Canal]" in Brockport, owner Jay Nichols told the Democrat & Chronicle. He picked up the building from local economic development agency that "spent in excess of $100,000 buying and renovating" site, paper reported. Downstate, Bronx-based Gun Hill Brewing opened its second retail location in Bronx borough of NYC. New Gun Hill Tavern full-service restaurant builds on existing brewery/taproom in new neighborhood. Fourteen of 20 taps serve Gun Hill beer at site also outfitted with operational still, part of partnership with Port Morris Distillery, according to release. In Washington, small brewpub Bushnell Craft Brewing of Redmond announced plans to move brewing ops to bigger "Craft Brew Barn" spot nearby. That'll open up some space at brewery/restaurant downtown, while offering room to upgrade from 3-bbl to 10-bbl system, as well as become "main hub for all of our distribution" and expand some farm operations, like raising pigs for annual pig roast, per release shared by Washington Beer  

North American Breweries and parent co FIFCO remain committed "to restore our craft business," and "to investing for growth in all of our brands," stated vp of sales Doug Smith and vp of marketing Glen Tibbits as part of kick off message at co's annual distrib mtg last week in Pittsburgh. Recall, NAB's craft portfolio has markedly declined in recent yrs. Magic Hat dropped nearly 26% since 2012 to 153K bbls in 2015, including over half of drop just in last yr. And Pyramid down sharper 42% to approx 76K bbls in same time. While Pyramid was able to shore up a bit in core PacNW mkts, this was Magic Hat's "toughest year" yet, general manager for brand, Mark Hegedus acknowledged. "We've lost a bunch of accounts," as flagship Magic Hat #9 is down and seasonal biz "down more." Yet while depletion declines are "concerning," and "I know you all don't see it," there are "outstanding pieces that are coming together," said NAB CEO Kris Sirchio.

Magic Hat "Can Grow" This (Fiscal) Yr; Back to 100% VT-Made; Library of Innovation; Investing Right and Telling Story "Not only can we stop the decline," but "this year we can see [Magic Hat] grow," said Kris. Keep in mind, Mark's referring to fiscal 2017 ending Sep 30, to stay in line with parent co FIFCO's reporting cycle. Main priorities for Magic Hat in 2017 are to: "remove the barriers to growth," "invest" in "right brands for growth and innovation" and bring the "Magic Hat story and culture . . . back to life." So co will move 100% of production back to VT, adding a new canning line and a new box line so co can make "everything we want" outta VT facility. And co's getting rid of 5 pallet minimum orders, offering as low as 1/2 pallet orders to give distribs an "opportunity to play with us" and "get mixed draft pallets" for more variety and innovation. "Those are big changes for us," and "Ramón and the board have stepped up to show their support," said Mark.

Then too, Magic Hat lookin' to dip back into its 22-year library of innovation "that most people don't even know about." "When Magic Hat was Magic Hat, we were all over" the style and ABV spectrum. But currently "not enough" of its portfolio is "playing in the high ABV specialty" styles and some of Magic Hat's "most requested" beers have been out of the lineup. So next yr co bringing back Heart of Darkness stout year round, as well as Elder Betty, Wacko (brewed with beets) and Fat Angel Ale, thruout 2017. Seasonals "will be used differently" since they no longer can "sustain a four month window." Co will continue to push IPA Playlist variety pk, up 219% this yr ("this is a package we need to get all in on next year," said Mark). Newer Low Key Session IPA "has done very well" on its own too. It'll add a 4th flavor to go in "Cantastic" pack that's "doing very well for us." And it'll brew Humdinger specialty series "on a bigger scale," offering new 4pk 12oz bottles.

Lastly, Magic Hat lookin' to "deliver the Magic Hat story and culture" to show that "the spirit" of founders Alan Newman and Bob Johnson still "exist[s]." Co hired 22 new salespeople across the east coast, "mostly" in northeast, including "account specialists" that will drive "monthly focus." Media spending will get a 600% increase in 2017. And packaging refresh for flagship #9, Electric Peel Grapefruit IPA and Circus Boy will "really pop." All in, getting Magic Hat back to growth is "probably our biggest challenge but I know we'll do it," since co "did it" with both Genny and Labatt, said Kris.

Pyramid Holding Ground in Core PacNW; Pushing Cans and New Citrus IPA; Boosting Media Spend 20% Kris and co "love what Robert [Rentsch] is doing with his team" and "already see the difference" as "core business is far more healthy and growing." Shipments grew 1% and depletions up slight 0.1% in core PacNW states, thru NAB/FIFCO's fiscal year thru Sep, shared general manager for Pyramid/Portland brands, Rob Rentsch. That's "tremendous progress," as co doubled sales team in PacNW and added PacNW-based mktg team and cross functioning leadership team for extra focus. Tho gotta note, steeper declines outside of core mkts are still driving trends down overall. At least in scans, Pyramid brand family $$ down 6%, volume down 12% in natl IRI multi-outlet + convenience data YTD thru Aug 14. And a couple Portland Brewing brands were collectively down 29-35%.

Pyramid's key brand continues to be Outburst IPA; up 14% last yr, holding onto its rank as #1 imperial IPA within extremely competitive IPA mkt. But Pyramid still under-indexes in two important growth segments within craft that it plans to address: cans and fruit IPAs. Mid-year, Pyramid launched its first cans starting off with a mobile canning unit, and recently installed its own canning line to "control our destiny," said Rob. Cans quickly became 3% of Pyramid's volume overall, but compared to 11% of total craft segment, it's still way under-indexed. So Pyramid will launch Outburst Citrus IPA in Mar 2017, with 6pk 12oz cans as its "lead pack," along with 22oz bottles and draft. And co adding 16oz cans for Thunderhead and Hefeweizen too. Ultimately, co increased mkt penetration from 68% to over 80% of craft occasions in PacNW this yr, Rob shared. Closing out 2016, Pyramid will also brew a barrel-aged version of its Snow Cap winter seasonal for the brand's 30th anniversary and ramp up its new Portland Trailblazers themed "1977 Lager" as the NBA season begins.

Next year Pyramid will boost media spending 20% to better tell brand story. Like Magic Hat, it's also getting a packaging refresh with "bigger, bolder pyramids," better utilization of space on the package in general and a brief brand story description on the base of the package. That'll get tested in Oct and Nov, and targeted to hit the shelves in April. Co developed a local TV spot with "Back to the Future" theme that features its coveted "Stan the Van" and will increase paid social media ad spending.

Genny Craft Building Thru Innovation and Pilot Brewhouse; Tap It Forward Festival with Other Local Brewers Genesee continues to expand its line of craft brews thru use of its Pilot brewhouse. It's "transformed into a thriving restaurant and brewpub" that's welcomed over 1.1 mil guests since opening doors in 2012, and acts as co's "customer insights lab," said Genny brand manager. So co will continue to ramp up innovation starting with new Smash Pale Ale (with citrus notes) launching in Jan, popular taproom brew Orange Honey Cream Ale launching in Apr, and a Munich Dunkel for fall season. Its Signature Series with "typically bigger beers" and "unique styles" available in 4pk bottles, starting with popular Salted Caramel Chocolate Porter that launched last year. Additionally, co will launch new Winter Warmer as "companion" for Salted Caramel that's being packaged this week. In Spring, co will launch new Helles Bock. It's created new 585 India Pale Lager brewed with all local ingredients. And lastly, co launching new Brewers Reserve specialty brew series, starting with new Bourbon Barrel-Aged Imperial Black IPA (in "extremely limited" quantity). Gotta note, "since we launched last May, Genesee Brewhouse Pilot Batch has been featured in four out of five" Wegmans magazines that are cross merchandized in-store and delivered to 1.2 mil households thruout 6 states. "So that's "a hell of a media buy that we actually don't have to pay a cent for."

All in, regardless of whether Genny is considered a craft brewer, it's taken action to become staple figure within local Rochester community thru its brewhouse and local innovations, its big project to build out production facility and add jobs, and thru community engagement. On Sep 9, it hosted "Tap It Forward" festival including 21 local craft breweries after closing down the brewery for the day to do volunteer work, which Kris Sirchio called "the best thing we've ever done." Mayor of Rochester actually declared Sep 9 "Tap It Forward" day for the city. "Pride in our brewery is back" said Kris, and "pride equals engagement" which "equals results."  

Let's not get too far ahead of ourselves, but craft segment did return to overall short-term growth for 4-wk periods ending Oct 8 and Oct 15 in Nielsen all outlet off-premise data. But craft volume still up less than 1% by volume, +0.8% for 4 wks thru 10/15. And that's not as strong as 2+% growth during previous 4-wk period. Recall, craft had been down a little less than 1% for short periods in Sep. Yet none of recent trends as good as segment put up earlier in year. Craft volume now up 3.1% yr-to-date in Nielsen data, $$ +6.3%.

As always, Nielsen includes some of big brewer entries in its craft stats. So likely that segment helped slightly by better trends for MC's Blue Moon franchise, tho volume still down 5-6% for 4 wks and YTD, and Leinenkugel Shandy franchise, which actually gained a little by volume recently and now up again by $$ YTD. But Shock Top story not improving for AB. That franchise volume still down by a quarter for 4 wks, -15.3% YTD.

Year-to-date trends improving slightly for Sam Adams franchise, but still down 9% and 7% by volume and $$, respectively. Short-term trends a couple points better. Short-term Sierra Nevada trends also improving somewhat. But not quite enough: it's up just barely YTD by $$, volume off 2%. New Belgium continues to straddle flat, with volume down a little bit, $$ up a little bit. "Remaining Domestic Brewers" gained 2.5-3% by volume and $$ for 4 wks thru Oct 15. This big group (which includes more than just small craft brewers, but driven by them) putting up 8% volume gain for the yr, $$ +11%. So once again note that declines of 6 big craft brand families (Blue Moon, Sam Adams, Sierra, NBB, Leinie and Shock Top, over 40% of 4-wk Nielsen craft volume) cutting into growth of segment. Nielsen stats suggest volume of these 6 brand families down a collective 7%, while rest of craft up about 7%.  

Thanks to NBWA's Alcohol Law Review blog, we got Idaho District Ct ruling last month that cleared AB ownership of a brewpub in Boise that 10 Barrel owned/ran when AB bought it in late 2014. Idaho Beer and Wine Distrib Assn had petitioned state ABC to rule AB ownership meant 10 Barrel exceeds 30K-bbl cap on retail rights and could not own brewpub. When ABC cleared AB ownership, distribs went to court. They lost.

Judge ruled that ABC's conclusion that AB "not prohibited from having a financial interest in 10 Barrel, including its retail business, is reasonable." Legislature could have "expressly" barred such a relationship, judge noted, as it barred other relationships, but "it did not." Distribs wanted the court to declare that "the location of production of [a brewer's volume] is immaterial to the exemption" to allow retail rights. In other words, to interpret law so that any brewer in any state producing over 30K bbls can't get exemption for brewpub in ID. But the judge ruled "nothing in the statutes purports to regulate beer manufactured outside the state." Again, he agreed with ABC that "brewer" in ID law is entity licensed to manufacture beer in Idaho. AB holds "certificate of approval" to sell beer in ID, not a brewer's license. "Whatever the legislature intended," the judge wrote, "it did not preclude an international giant in the industry from buying out the local competition of small brewers so long as the local entity operates within the statutory parameters for its own product. If this is not the result intended by the legislature, the solution falls to the legislature."

Distribs also tried to argue a dormant commerce clause issue, that if ID allows in-state brewers under 30K-bbl cap to have brewpub but bars similar-sized out-of-state brewers from having one, then there's a Granholm discrimination problem. But judge refused to ponder that "hypothetical." Finally, distribs charged that 10 Barrel no longer came under cap, citing new release from brewer that it "expected" to hit 40K bbls in 2014. Again, judge would not go there and did not allow distribs to go there. "Expecting to sell 40,000 barrels is not the same as producing 40,000 barrels annually," he wrote. Key to judge was "stipulated fact" that 10 Barrel Idaho never exceeded 30K bbls. "If in fact 10 Barrel is exceeding the limitation the remedy is with the regulator," he concluded. Looks like if distribs (or brewers) want to "clarify" retail rights and application of ID cap, it will be up to the ABC and/or legislature to do so.  

Join us Monday, Nov 14 at the classic Waldorf Astoria hotel in NYC for the premiere beer biz of the year, our Beer Insights Seminar. A reception Sunday eve, Nov 13 gives you a chance to run elbows with top industry execs. But the main event kicks off Monday morning with one of our widest ranging lineups ever. It includes a slate of programming that speak directly to some of biggest issues facing the craft segment. Constantly shifting 3-tier dynamics will be tackled by panel of experienced industry attys, Marc Sorini, Mike Moses and Michael Halfacre. Founder of Bell's Brewery Larry Bell and his daughter and vp Laura Bell will dig into their indie craft biz and the segment generally. And consultant Bump Williams will discuss fast-changing retail landscape. You'll also hear from leaders at top global and US brewers too, all of which have interesting, and shifting, positions in craft: AB InBev CEO Carlos Brito, MillerCoors CEO Gavin Hattersley, Constellation Brands Beer Division prexy Paul Hetterich and FIFCO (NAB owner) CEO Ramón Mendiola Sánchez. Seating's getting tight, so get some more info and register today. Our discounted room block at historic Waldorf Astoria ends Oct 28