Goose Island in Chicago, 10 Barrel in Oregon, Devils Backbone in Virginia – it’s hard to tell by looking at their labels, sitting bold and beautiful in the liquor store, that they’re no longer craft beers.
Anheuser-Busch, the Belgium super-brewer that sells a fourth of the world’s beer, has been busy buying up popular American craft breweries, producing them alongside Budweiser, Corona, and Michelob. The company’s about to get even bigger with an impending merger with SABMiller, the world's second largest brewer and the maker of Miller, Coors, and Blue Moon.
That could have big implications for the true craft breweries still alive, says Indeed Brewing Company co-founder Tom Whisenand, who is also the president of the Minnesota Craft Brewers Guild.
Anheuser-Busch can out-market and outsell craft brewers in bars, grocery stores, and big-box liquor shops, all while giving the illusion that their products are craft. Everyday beer drinkers may not realize that true craft beers – brewed locally using painstakingly picked ingredients – would become harder and harder to find.
It all boils down to corporate brewers’ edge over craft brewers on distribution and promotion.
Traditionally, beer gets from brewery to fridge through a distributor who sells to stores. Anheuser-Busch has the ability to offer lucrative marketing bonuses to distributors that sell a certain number of their products a year, motivating them to turn their backs on craft brewers.
Big retail stores like Total Wine are set up to work with as few vendors as possible, so they’re unlikely to go out of their way to do business with every independent brewery. Distributors can also entice mom-and-pop liquor shops and local bars to buy Anheuser-Busch products by giving them coasters, posters, napkin holders, and most anything else that a small business needs to maximize profits.
“It’s hard for us to compete with that,” Whisenand says. “With craft brewers, our customers are best served when we compete on quality, and quality alone. That’s what’s scary about big mergers like this, and that’s what’s scary about distribution getting to do too much. All of a sudden, craft brewers are competing on price and marketing, and not what the quality of the liquid is.”
Plus, it’s just not honest to promote a beer as craft when it’s not, Whisenand says. Craft beer isn’t cheap. People pay $10 a six-pack because craft breweries are businesses that employ local people who make their products with love and creativity, he says.
“When Anheuser-Busch charges 10 bucks for a six-pack of beer, it’s like, well … what kind of profit margins are they making? They’re putting that money back into basically manipulating the market.”
And when consolidation reaches a certain threshold, the few brewers who control the market would have little incentive to push for excellence, Whisenand says.
The U.S. Justice Department put Anheuser-Busch through a lengthy antitrust review in January. Now it's pretty much a done deal, industry insiders believe.
The Justice Department is one of many agencies around the world that have to approve the $107 billion merger before it's official. The European Union and Australia have already signed off. The resulting beer conglomerate would control nearly a third of the world market.