Bob Pease

BA Fires Back at Carlos Brito

Anheuser-Busch InBev CEO Carlos Brito stirred up a hornets’ nest by saying that “consumers are a bit tired of choice.” Bob Pease, the president of the Brewers Association, was quick to respond.

Pease pointed out that the 2016 Great American Beer Festival attracted a sellout crowd of 60,000, who sampled more than 3,800 from 780 breweries; and that the ability to choose from that many alternatives is “a central value of our democracy and a core tenet of ‘being American’.”

The BA head also asserted that Brito’s comment smacked of self-aggrandizement. He said that A-B InBev entered the craft beer market by acquiring a portfolio of craft breweries, and is about to use its economic power to push its brands onto store shelves and tap handles—and push out truly independent brands. Pease observed, “That’s reducing choice all right—but not based on beer lover demand.”

Peace also suggested that consumers will rebel against A-B InBev’s attempt to limit their choices. A recent Nielsen survey found 58 percent of American craft beer drinkers want even more flavors to choose from, and about 65 percent said they drink more craft beer specifically because craft offers more variety.

More About That Big Beer Merger

Bob Pease of the Brewers Association has sobering news for craft beer lovers. In a New York Times op-ed earlier this month, Pease warned that the coming merger between Anheuser-Busch InBev and SABMiller will have an impact on your local beer selection that you hadn’t expected.

The problem is rooted in the three-tier system of liquor regulation, which forces craft breweries to sell their beer through distributors. In some states, the law allows big breweries to own distributors. Making matters worse, the distribution industry has undergone consolidation, and many areas of the country are served by a handful of distributors.

A-B, which controls 45 percent of the U.S. beer industry, has been particularly aggressive, buying five independent distributors—a move that has led to a Justice Department investigation. The brewery also compensates its distributors using a formula that in effect penalizes them for handling craft brands rather than A-B brands. That, too, is being investigated.

Pease hopes that the when the Justice Department gives final approval to the InBev-SAB merger, it will take steps to keep the beer market competitive. He points out that in 2013, it prohibited A-B InBev from interfering with independent distributors that sold Mexico’s Modelo beer. Pease urges Justice to give craft brand distributors similar protection, require A-B to reduce its stake in distributors, and bar compensation systems that favor A-B’s own brands.

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