Even if individual small brewers and distribs helpin’ each others’ sales stats, state-based regulatory issues sure ain’t helping build broader inter-tier relationships in Southeast. Battle over 64-oz growlers in Florida could be officially over: the House passed Senate version of bill to legalize the package on Friday, so it heads to Gov Scott’s desk. Bill also creates new restrictions on brewery taprooms, which distrib advocates viewed as necessary and brewers guild exec director Josh Aubuchon called “not perfect but pretty darn good,” in Sarasota Herald-Tribune. But another small brewer thinks brewers “got steamrolled.” New law allows for up to 8 brewery-operated taprooms, but all must be on site with a brewery. Those brewing at multiple sites can transfer between locations, but not more beer than it can produce at receiving brewery. That limits amount of beer larger brewers could send to and sell from smaller taprooms. Beer sold at taprooms but made by other brewers must go thru distribs. So growler battle may be over, but “beer wars” in Fla may not be, Orlando Sentinel wrote. “I think there’s a change happening in the industry that is going to create potentially some more battles,” Eric Criss of Beer Industry of Florida wholesaler group told the paper. And legislator’s thirst for dealing with beer laws may be quenched. “This day has been a long time coming,” Fla Rep Dana Young, who supported small brewer efforts in House, said from that chamber’s floor Friday, according to the Miami Herald. “It was a lot harder that it should have been, and a lot of you have gone through this craziness with me.”

At same time, Alabama brewers seek new craft brewer license and franchise reform but were hit with unsupportive letter from wholesaler group Friday. Letter explains that state distribs support “evolutionary change” but charges that “the Alabama Brewers Guild has not included us in their process.” That caught brewers by “surprise,” according to guild post that contends brewer advocates did attempt to include distrib assn. Later post from guild proposes both groups “start over.” Recall, brewers in that state followed federal statutes when constructing proposed bills and followed tactics to promote “Jobs Before Politics” that neighbors in South Carolina and Georgia used. Work done by digital political strategy group Push Digital, mostly used by Republican candidates, helped SC brewers pass Stone Bill last session, as explained during recent Craft Brewers Conference seminar. Georgia brewers used same “beerjobs” website created by SC folks, but with less success. Similar site now also in use in Alabama by brewer advocates but distribs in North Carolina took same digital strategy and applied it against small brewer bills last week with their own “beerjobs” site. So across Southeast, different tiers seem to be on very different pages.

 A year after opening its joint New Carnegie Brewery complex in Stockholm, Sweden, Brooklyn Brewery announced it’ll team up with Carlsberg Group again on similar expansion in Norway. Brooklyn joins Carlsberg to expand current operations at Trondheim, Norway site of E.C. Dahl’s Brewery. Expansion calls for new brewing system as well as restaurant, meeting space and “visitor center,” like the New Carnegie project in Sweden. Carlsberg announced a 110 mil Euro investment in E.C. Dahls site last fall (almost $120 mil, at today’s conversion rate) and now Brooklyn enters as a minority stakeholder, according to Norwegian paper Adresseavisen. As with New Carnegie project, high-end restaurant will be major feature of new site, run by local restaurateur Roar Hildonen, building on existing relationship with Brooklyn Brewmaster Garrett Oliver, Brooklyn’s blog entry notes. The co hopes to wrap up the project next summer. 

“Beer distributors do not receive a tax reduction under either,” proposed Small BREW or Fair BEER Bills, “and are not asking for excise taxes to be reduced.”  That’s NBWA’s bottom line on fed excise tax issues as distribs hit Hill tomorrow in DC to talk to Congress/staffers about those bills and other issues, as we noted in current issue of beer marketer’s INSIGHTS. NBWA had previously voiced opposition to BA-supported Small BREW Act, but dialed it up in presentations, issues briefing, other materials at today’s Legislative Conference.  That’s even while new video shown this morning again stressed argument that independent 3-tier system and distribs are “Benefit to Craft Brewers” by giving them access to mkt equal to that enjoyed by huge global brewers. 

On tax issue, 99% of brewers produce less than 2 mil bbls and already get a break, NBWA reminded today.  BREW Act increases that cap to 6 mil, “a change that would benefit only a few specific brewers.”  They’re unnamed, but include Boston, Yuengling, possibly a couple others.  What’s more, BREW “seeks changes to the tax code that could impact state laws which support an open and independent beer distribution system.”  Also: “Outdated estimates of the BREW Act understate its projected cost and fail to take into account” new brewer entries in recent years and big growth.  Rub for NBWA is same as it has always been.  Six mil bbls ain’t small, NBWA prexy Craig Purser told distribs, and cap that size could work itself into state franchise laws, carve-outs, etc.  It has already popped in a few state proposals.  Just in case distribs/ Congress don’t get the point, NBWA included additional fact sheet in mtg materials to define: “What is Small in the US Brewing Industry.”  Points out that 97% of US breweries make 60K bbls or less, 93% produce 15K bbls or less, 91% at 7,143 bbls or less (break point for BEER bill under which brewers pay no fed tax) and 88% are really tiny, under 1K bbls.

NBWA does not support BREW or BEER, but if Congress were to “pursue” excise tax reform, BEER bill’s “balanced” approach “reflects current industry structure and reduces excise taxes for brewers of all sizes,”  And that’s approach Congress should take if it’s going to move, NBWA believes.

A coupla other signs of increasing tension between distribs and BA/small brewers:  1) BA did not host its annual reception before NBWA opening party in DC last evening. Instead, Beer Inst had reception for NBWA leadership on roof of its new digs; 2) NBWA has been disinvited, we hear, from annual joint Craft Distrib of Year award, presented by NBWA and BA; 3) state tensions abound over retail ops, self-distribution, carve outs sought by small brewers, etc (see below).

Diplomatic debate in DC this morn at NBWA Legislative Conference among industry assn leaders on tax and other topics.  Question of whether compromise fed tax bill can be reached came up, natch. NAABI’s (assn of importers) Bill Earle said flat out “whenever there’s two [competing] pieces of legislation, nothing gets done.”  Outgoing MC CEO Tom Long expressed same opinion in separate talk with NBWA’s Craig Purser.  Beer Inst’s Jim McGreevy said debate continues and he’d “like to see a resolution.”  But BI “comfortable” with BEER as “fair, equitable and comprehensive.”  At same time, Jim suggested several times that beer leaders need to “talk more about what we have in common” than disagreements. 

Brewers Assn’s CEO Bob Pease reminded that competing Small BREW “is not BA legislation,” but legislation proposed by its sponsors in House and Senate. “When they say it’s time to deal, we’re going to be right there with them.”  Bob also stressed that BREW has allowed BA to “engage membership in government affairs” and “establish a political identity in Washington.”  Bill circled back to tax issue, advising that neither BEER nor BREW will “go anywhere without giving something to imports.”  (BEER gives importers tax break; BREW does not.)  Current situation is “non-tariff trade barrier,” in his view, and tax policy needs to “recognize the original craft brewers in the rest of the world” and create “level playing field.”  If not, issue will arise in trade negotiations and/or case at World Trade Org, Bill said, tho Fair BEER is “more elegant way” of getting to level playing field. 

Tax bills aside, assns (including retail assn ABL whose John Bodnovich was on panel too) share plenty of common ground, leaders said.  That includes: fully funding TTB and state agencies (BA “in lockstep” with others on TTB, said Bob), self-regulation of ads (BA ad code “based on” BI’s) and fighting any tax equalization.  Jim specifically voiced concern that soon-to-emerge DISCUS-supported tax bill will “potentially be a vehicle for equalization.” Craig seconded Bob on importance of state enforcement agencies being fully funded with “proper resources, referees” and “whistles that work,” especially on trade practice area.  Bill reminded that TTB did “extensive investigation” of Category Management, tho no “final assessment” yet and everyone’s “waiting to see what’s going to happen” with it.

Craig brought up question of retail rights, an issue of interest to small brewers and retailers, of course.  Both John and Bob applauded outcome in Fla that “freed” the 64-oz growler and clarified taproom rights for state’s craft brewers (see below).  Some discussion too about challenge of legalized pot.  Industry leaders, like everyone else, trying to get their arms around debate, not taking official position but clearly concerned about charges that alcohol “more dangerous” than pot, given limited research info.  But pot debate gives oppy to remind legislators and public how “alcohol is regulated,” Craig reminded and “reinforce why we have the state laws we do.”Bill noted that since 1988 every alc bev label in US includes warning label, but “I don’t see that anywhere” in the pot debates.

What keeps these industry leaders up at night?  Bob: managing craft growth and events (70K people will have gone to CBC, SAVOR and GABF this yr) and trying to keep 3400 brewers “in the same book” if not necessarily on same page.  Jim: “Disunity” in beer.  “We have to continue to find things we agree on and present those as positives….  I worry that the competitiveness in the industry bleeds into the policy space.”  John: not much talk now about proposal to reduce legal BAC for driving to .05, but he thinks that discussion “is coming.”

Departing MillerCoors CEO Tom Long gave unusually heartfelt and revealing interview to NBWA prexy Craig Purser and distribs gave him a standing o, for his understanding of and ability to work with middle tier.  Along way, Tom gave one of most succinct descriptions we’ve seen of why owning branches “doesn’t work for us”:  1) “We can’t afford it”; 2) “We’re not too good at it”; 3) “It’s not practical.”  Historically, MillerCoors “hasn’t been particularly good” at running branches, “evidence was very mixed” and “ability to handle” MC’s large, diverse portfolio in a local market, well, it was “very difficult.... We’re not going to own distributorships because it doesn’t work for us.” While Tom said “we like that ok” about the one branch MC does own in Denver, he quickly added: “I wouldn’t seek to” add more. “Breaking the industry is a problem right now,” Tom concluded.  “We appreciate that,” commented Craig.

What’re Tom’s biggest sources of pride and frustration during his tenure at MC?  While MC able to “grow net revenue and earnings, we haven’t been able to grow volume.  That’s decidedly the biggest frustration,” Tom emphasized.  He also “would have liked to have seen our breweries conversion to one system.”  That finally begins with Shenandoah this fall, followed by Golden next spring.  What’s Tom most proud of?  “Most proud of the team at Miller Coors” which has “survived a long march with me” and been “terrifically loyal.” Also, MillerCoors has “invested over $2 billion in our breweries, advancing the capabilities of our breweries to make better products at a higher quality, and smaller batches with less waste.”   He quickly added that “neither one of the breweries would have had that capability without the joint venture.”  Tom also mentioned premiumization of the portfolio as a source of pride. 

Tom praised how well the 3-tier system works.  “The fragmentation that has gone on in beer is only able to occur because of the framework we have,” he said.  “Go in any aisle and look at the fragmentation of the last decade.  There’s none that resemble beer” and that’s “only enabled by the 3-tier network.” While “we like focus just like everybody else,” Tom said, “you’ve got to be philosophical and pragmatic. Consumers need choice.  Customers want choice.” And when distribs have broad book (beyond MC), they “can invest more,” “become more efficient,” “invest more in responsibility” and ultimately “enable MillerCoors to become more successful.”  MC found “correlation between of our distributors gross percentage of the profit pool in the market and our brand growth was very very tight.”  When Tom intro’d his comments on benefits of companion brands, Craig chimed in: “I’m not sure your competitor sees that.” 

The 2015 Beer INSIGHTS Spring Conference is coming up in 2 1/2 weeks, so make your reservations now.  You won’t want to miss this unique conference that focuses exclusively on the high end of the beer biz, May 11-12 at the Ritz Carlton in Chicago.  We just added First Bev Group’s founder/ceo Bill Anderson to review current surge in craft deals, how private equity $$ change the landscape and more.  The conference program features many of the leaders of the high end; representing imports, craft, FMBs and cider, plus lotsa keen analysis and great data, and plenty of networking time.  Click here for more information and click here to reserve your spot.

While beer biz likely down a bit in Q1 after all puts and takes, spirits hangin’ in at +2% pace so far this yr, at least in 17 control states.  Thru Mar, volume up 2.1%, reports control state assn NABCA.  And running 12-mo trend +2.6%.  That matches annual avg gain for total spirits biz in US last 5 yrs, according to DISCUS figures.

Coupon aggregator website Krazy Coupon Lady found a really crazy coupon situation in leading drug chain Walgreen’s, which it advertised as “Moneymaker Shock Top Six Pack at Walgreen’s!”   There you could buy a 6-pack of Shock Top for $8.99, redeem a $5.00 offer from Ibotta and at same time redeem another $5.00 Shopmium offer, for a final price of $1.01 back to the buyer.  “Combine the two rebate app offers and the deal is a moneymaker!” crowed the Krazy Coupon Lady.  Krazy!

AB just broke with discounts on most of its big packages in nation’s largest beer mkt for part or all of May.  And in some cases it’s going below any price seen in recent yrs. Pricing sheet INSIGHTS saw has term “Deeper Discount” or “New Deeper Discount” a couple dozen times in 2 pages, splashed in several bright colors. 

To give 1 of more extreme examples, tho just for 1 week, AB has 20-pack pricing on Bud and Bud Light of $11.83; best price back in 2012 was $12.50, sez source.  The 20-pack has lower per unit price (59.2 cents per can) than 36-packs, unchanged at last yr’s best pricing of $21.45 (59.6 cents per can) from May 4-Jun 30.  The 30-pack will also be reduced for 2-mo period 5/4-6/30.  The new 30-pack price is $17.90, lower than last yr’s best price of $18.30.  Eighteen packs and 12-packs are also getting deep discounts below any seen in recent yrs, tho just for 1 week.   “They are getting very aggressive in California. Very aggressive,” said industry source. “It’s going to put us in a tough position to match.” 

The 2015 Beer INSIGHTS Spring Conference is coming up in a few short weeks, so make your reservations now.  You won’t want to miss this unique conference that focuses exclusively on the high end of the beer biz, May 11-12 at the Ritz Carlton in Chicago.  The conference program features many of the leaders of the high end; representing imports, craft, FMBs and cider, plus lotsa keen analysis and great data, and plenty of networking time.  Click here for more information and click here to reserve your spot.