Blumenthal: Is Big Beer getting too headstrong?

Published on Monday, 14 August 2017 22:25
Written by Angie DeRosa

Staff Writer

HARTFORD - U.S. Sen. Richard Blumenthal met with representatives of craft breweries across the state Monday afternoon at Thomas Hooker Brewery’s Colt Taproom to discuss the battle between craft breweries and their much larger competitors.

Blumenthal has urged scrutiny of consolidation in the beer industry, calling on the Department of Justice to ensure mergers of brewing giants do not get in the way of America’s craft brewers - a growing industry in Connecticut.

The discussion comes in the wake of Anheuser-Busch InBev’s acquisition of SABMiller in 2016. Anheuser-Busch InBev, which brews Budweiser, Bud Lite and other top-selling beers, was already the largest brewing and beverage company worldwide before the merger and remains so.

The company has been under scrutiny since being investigated by the Justice Department in October 2015 for allegedly buying beer distributors and preventing them from distributing competitors’ beers.

This May, the brewing conglomerate was criticized for participating in anti-competitive behavior after buying the entire supply of South African hops from SAB Hop Farms, which made the hops unavailable to craft brewers in the United States.

Similar claims were also made more recently when the company purchased Minnesota-based Northern Brew - the biggest homebrewing supply chain in the country - and bought a stake in the website RateBeer.

Mike Larson, co-founder of the Alvarium Beer Co. in New Britain, said the distribution side doesn’t affect his brewery. He said what he is concerned about is the raw materials, like equipment and hops, and how moves by the big companies will drive up prices.

Blumenthal has worked on antitrust legislation and other policies overseeing mergers.

Larson said that, in Hartford, Blumenthal asked representatives of state breweries about their problems.

New craft brewers are bringing new varieties of beer to the market. To keep up, big beer companies have attempted to create their own beers in those new styles, but their difficulty in marketing them has made them rethink their strategies.

Now, big beer companies are buying up craft breweries, which add to the distribution problem for some of the state’s small brewers.

For example, today AB InBev owns 10 brands that were once independently owned.

Many times, this affects smaller, craft breweries because big beers are able to get beer distributors and retailers to drop local products and put their bottles on the shelves and in the coolers instead.

As a result, many craft brewers sell mainly out of their tap rooms, because the competition for retail space is too much for them to afford.

This can be used to their advantage by putting an emphasis on hyperlocal brewing, and it also can be part of the solution to the challenge of Big Beer.

Each year, the number of breweries in Connecticut has steadily increased, now with almost 50 craft breweries in the state when just six years ago the number was the single digits.

“It comes down to the local consumer, if people are buying more and more (local product),” said Larson. From his experience, he thinks more and more people are looking to buy local and support small businesses.

The Brewers Association - a nonprofit organization for small and independent craft brewers - recently implemented an “independent craft brewer seal” to help buyers distinguish beer made by craft brewers from brands bought up by the major brewers.

To obtain the seal, craft brewers must meet a number of required criteria, including that a brewery must be small - producing less than six million barrels a year -and independently owned.

Larson said Alvarium will soon have the seal on all their bottles.

According to the latest data from the Brewers Association, the craft beer industry in Connecticut had a $569 million economic impact in 2014.

Overall, craft beer generated $23.5 billion in sales in 2016, growing by 10 percent.

Angie DeRosa can be reached at 860-801-5063 or aderosa@centralctcommunications.com.



Posted in New Britain Herald, Business, General News, New Britain on Monday, 14 August 2017 22:25. Updated: Monday, 14 August 2017 22:28.