Friday, April 17, 2009

Beer Wars Live Review

So we got about seven of the homebrew crew out for Beer Wars Live out at AMC Sunset Place in South Miami last night. All in all a pretty good time, stopped off at the Titanic before the show for dinner and, appropriately enough, mugs of Arrogant Bastard and Dogfish 90 Minute.

The entire Beer Blogosphere, such as it is, will no doubt be buzzing about this so I'll keep my thoughts short.

The Good.

It was reasonably well produced and, come on, for a movie about beer and corporate competition it was pretty darn entertaining. There were some good moments of humor interspersed throughout, usually by creative use of old advertising and industry videos. It was also fun to see various beer personalities get riled up. Greg Koch and Sam Caglione are further cemented in my Hall of Beer Heroes. The 25 or so people in the theatre seemed to be having a good time. (Yeah it sold out in Boston, but hey, 25 people who care about beer in South Miami is an incredible showing!) Also the live simulcast was great, purely because it was a bit spotty and unpolished. It made the whole thing seem more personal somehow, even though there were 400 theatres involved.

The Bad.

Ok. Anat grated on me a little bit, nothing serious but at times she's a bit like a shrill Michael Moore. That didn't bother me too much, though I'm sure many reviews will be less kind. And sometimes I felt the history behind all this was treated a bit too lightly, I'd like to have seen a bit more about the forming of the Three-Tier system after Prohibition.

But my biggest problem BY A MILE is with her premise: that we need to ditch, or at least seriously rethink, the Three-Tier system. No one doubts that there are some serious problems with the current wholesaler tier. Yes, the large breweries (and distilleries/wineries as well! This isn't just a beer problem!) have gained more control over distribution than they were ever intended to. Yes, the small number of powerful distributors often limit choice and create barriers to entry. Yes, they sometimes break the law by offering all kinds of illegal perks, such as bulk discounts, free merchandise, advertising freebies, and sometimes outright bribes. But the distributors are creatures of statute. The monopolies distributors enjoy are granted by the states under the 21st Amendment. And there are perfectly good reasons that the system was structured this way. Distributors are the choke point between retail and production, which makes monitoring all three easier for the state. Because there are relatively few distributors, and they are often geographically limited, there is little incentive to compete, meaning that there is little incentive to make alcohol dangerously cheap and plentiful. Because their licenses are expensive, and profitable, distributors are incentivized to stick to the rules. Usually they get a single warning, then their license is revoked. In practice, even a warning would make investors nervous enough to pull out, spelling danger (possibly doom) to the company.

State legislatures and LCBs could change/actually enforce the restrictions placed on the middle tier, if there was enough political will to overcome the mountain of money in the way. Hopefully this movie will help educate and inspire craft beer fans to start pressuring their legislatures to do just that.

I guess my biggest problem is that while she suggests some alternatives, she doesn't really address the reasons why we have a Three-Tier system and the problems and consequences of tinkering with it. For example, she suggests allowing self-distribution for small brewers. Ok fine, but it's not so simple. Just take a look at the current mess regarding wine shipping and self-distribution. Appart from the cost to the breweries of licensing and bonding, compliance with the complicated regulations concering distribution would take some serious effort. And it would create that much more work for TTB agents and state liquor control officers to monitor that many more distributorships.

Finally, in ignoring the problems that created the Three-Tier system she ignores the inevitability that removing the system will only cause those problems to resurface. If the tied house and antitrust problems that arose before prohibition were bad then, when there were a thousand regional breweries, none with clear market dominance, imagine what it would be like if AB In-Bev and SABMiller could start buying into retail and distribution chains now. That little sliver of grocery store shelf space devoted to craft beer would be gone forever.

I gather that some of the Fresh Beer crew (our local distributors of Shipyard, Avery, Stone, Dogfish, Rogue, etc. i.e. The Font of All that is Good and Holy) were out at South Beach Cinemas for this. I'd like to get their opinion on it, I'll see if I can.

No comments:

Creative Commons License
The Twentyfirst Amendment Meets the 21st Century by Russell Hews Everett is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. The opinions expressed on this page are purely my own, and should not be taken to constitute legal representation or advice.