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(MassLive)   Imagine if having used a news aggregator for 6 months you could never leave no matter how many site redesigns and obnoxious ads you had to suffer through. That's the life of a craft brewer in Massachusetts and some of us liked the blue sidebars, Drew   (masslive.com) divider line 33
    More: Interesting, Opa-Opa, Massachusetts, craft beer, Western Massachusetts  
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3042 clicks; posted to Business » on 03 Mar 2014 at 1:35 PM (41 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



33 Comments   (+0 »)
   
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2014-03-03 01:41:40 PM  
You'll get over it.
 
2014-03-03 01:42:27 PM  
Reported for calling out a Farker
 
2014-03-03 01:49:36 PM  
FTA:
" once a brewer has a relationship with a wholesaler lasting six months or more, the wholesaler gains distribution rights indefinitely regardless of performance. "

Yeah, that's pretty much bullshiat.
 
2014-03-03 02:20:06 PM  

cgraves67: FTA:
" once a brewer has a relationship with a wholesaler lasting six months or more, the wholesaler gains distribution rights indefinitely regardless of performance. "

Yeah, that's pretty much bullshiat.


Yeah because:

"Section 25E. It shall be an unfair trade practice and therefor unlawful for any manufacturer, winegrower, farmer-brewer, importer or wholesaler of any alcoholic beverages, to refuse to sell, except for good cause shown, any item having a brand name to any licensed wholesaler to whom such manufacturer, winegrower, farmer-brewer, importer or wholesaler has made regular sales of such brand item during a period of six months preceding any refusal to sell.

Any manufacturer, importer or wholesaler shall forward a notice in writing to the wholesaler, to whom it has sold any brand item, prior to discontinuing sales to such wholesaler of such brand item and shall forward a copy of said notice to the commission."

I would say going from 3,000 barrels to 300 is good cause, if 90% decrease isn't good cause I don't know what is.  Did these idiots even read the law and send this information to the commission?
 
2014-03-03 02:49:20 PM  

cgraves67: FTA:
" once a brewer has a relationship with a wholesaler lasting six months or more, the wholesaler gains distribution rights indefinitely regardless of performance. "

Yeah, that's pretty much bullshiat.


Could be worse:
Rizos can sell as much beer as he wants at his own two restaurants

In AZ, the brewery I worked for had 2 locations, but only 1 brewery. We never got the financing in place to build the downtown brewery...

Anyway, to sell the stuff at the downtown location that was brewed at the uptown location, we had to ship it down via our distributor. I don't know if AZ had this lifetime exclusivity clause, and I don't know what the minimum it was to charge us, but the distributor was pretty cool about it and charged us as little as they legally could. My boss was pissed, but it wasn't worth the liquor license risk, and it was much better than having to continually explain how we could be a 'Brewing Company' that cold carry 20 different craft/micros on tap but didn't have any of our own.
 
2014-03-03 02:52:06 PM  

TNel: cgraves67: FTA:
" once a brewer has a relationship with a wholesaler lasting six months or more, the wholesaler gains distribution rights indefinitely regardless of performance. "

Yeah, that's pretty much bullshiat.

Yeah because:

"Section 25E. It shall be an unfair trade practice and therefor unlawful for any manufacturer, winegrower, farmer-brewer, importer or wholesaler of any alcoholic beverages, to refuse to sell, except for good cause shown, any item having a brand name to any licensed wholesaler to whom such manufacturer, winegrower, farmer-brewer, importer or wholesaler has made regular sales of such brand item during a period of six months preceding any refusal to sell.

Any manufacturer, importer or wholesaler shall forward a notice in writing to the wholesaler, to whom it has sold any brand item, prior to discontinuing sales to such wholesaler of such brand item and shall forward a copy of said notice to the commission."

I would say going from 3,000 barrels to 300 is good cause, if 90% decrease isn't good cause I don't know what is.  Did these idiots even read the law and send this information to the commission?


FTFA: Good cause "is defined as the wholesaler making disparaging comments or hurting the reputation of the product or brewer, giving preferential treatment to competitors, failing to provide best efforts at promotion, engaging in improper trade practices or failing to comply with the terms of the agreed upon contract.
A brewer citing good cause must still give 120 days notice, and if the wholesaler appeals, the whole matter goes to the state Alcoholic Beverage Control Commission for hearings and an eventual ruling. And until a ruling is handed down, a process that can take years, the brewer is still required to continue using the same wholesaler."

So to fire the distributor would take 4 months at best, and several years at worst, during which time the distributor has next to zero incentive to sell their beer. This is one of the major failings of the three-tier system (producer-distributor-retailer), especially for in-state producers. If Opa could go to retailers directly, they'd have a much better ability to control their own product and sales (and, despite the inevitable distributor arguments, they could still choose to go into distribution with a third party,  if that party offered some advantage, rather than being simply regulated into that relationship).

We've noticed a similar issue with a distributor we work with (I'm in the retail side of things); they give a flying crap about craft products, instead preferring to spend all their energy on macrobrew. Of course, there's no alternative for us, either -- they're the only distributor that carries those specific beers in our area, although another distributor carries the same products 10 miles south of us; the franchise line is in the way.
 
2014-03-03 02:53:57 PM  
Trade protectionism at its worst.

The distributors have a strong lobby, apparently.
 
2014-03-03 03:01:41 PM  
Why not simply fork a second corporation, transfer assets to the second corporation, and have the second corporation sign a contract with someone else?
 
2014-03-03 03:02:09 PM  
How is this law even constitutional?
 
2014-03-03 03:12:57 PM  

Warlordtrooper: How is this law even constitutional?


West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937), a.k.a. "The switch in time that saved nine"
 
2014-03-03 03:17:28 PM  
Im tired of the Buzzfeed crap.
 
2014-03-03 03:17:56 PM  

Teiritzamna: Warlordtrooper: How is this law even constitutional?

West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937), a.k.a. "The switch in time that saved nine"


Are you a lawyer?
 
2014-03-03 04:14:13 PM  
Smells like a Featured Partner.
 
2014-03-03 04:15:49 PM  

Warlordtrooper: How is this law even constitutional?


Because without regulations bad things will happen.  A lack of regulations once raped my dingo
 
2014-03-03 04:16:26 PM  

Tallman: This is one of the major failings of the three-tier system (producer-distributor-retailer), especially for in-state producers. If Opa could go to retailers directly, they'd have a much better ability to control their own product and sales (and, despite the inevitable distributor arguments, they could still choose to go into distribution with a third party,  if that party offered some advantage, rather than being simply regulated into that relationship).


But remember, it was created so that the big breweries couldn't open up mega-bars and stifle all possible competition. Can you imagine how crappy a bar OWNED and OPERATED by Anheuser Busch would be? Not that this is a good example of how the law is working for us, either...
 
2014-03-03 04:22:02 PM  
All I know is that distributors are preventing me from getting Pyramid in Wichita these days. So yeah, fark 'em.

www.underconsideration.com
 
2014-03-03 04:29:58 PM  
What are these "ads" one speaks of?
 
2014-03-03 04:55:08 PM  

Mikey1969: Tallman: This is one of the major failings of the three-tier system (producer-distributor-retailer), especially for in-state producers. If Opa could go to retailers directly, they'd have a much better ability to control their own product and sales (and, despite the inevitable distributor arguments, they could still choose to go into distribution with a third party,  if that party offered some advantage, rather than being simply regulated into that relationship).

But remember, it was created so that the big breweries couldn't open up mega-bars and stifle all possible competition. Can you imagine how crappy a bar OWNED and OPERATED by Anheuser Busch would be? Not that this is a good example of how the law is working for us, either...


I dunno, if it's owned and operated by ABInBev, you'd have the macros (Bud, Michelob), Goose Island, Beck's, Bass, Boddington's, Hoegarten, and Stella, among others. Yeah, it's macro and crafty brew, but there's a pretty broad spectrum of beers. And, in fairness, they'd probably undercut the competition, which would mean that the local bar around the corner from me would have to carry non ABInBev beers -- which means better beer for me when I go there for wings (they make excellent hot wings).

Ultimately, as someone who works in the alcohol retail world, I'll say that the three-tier system serves very little purpose any more; the distributor tier is pretty well consolidated (we've got 4 major wine/liquor distributors, 1 of whom carries beer, and 2 major beer distributors. There's probably another 10 minor ones total among both categories.), so there's not much competition amongst them. That means that prices to the retailer are higher, and that's not going to be absorbed by my company, so the consumer pays. If there were no legally-protected distributor level, there might still be distributors (for breweries that lack the inclination or ability to self-market), but since they'd actually have incentives to do a decent job (as the brewery could fire them easily), there would be better service to the brewery and retailer (and ergo the customer).
 
2014-03-03 04:59:05 PM  
 
2014-03-03 05:06:13 PM  

Tallman: Ultimately, as someone who works in the alcohol retail world, I'll say that the three-tier system serves very little purpose any more; the distributor tier is pretty well consolidated (we've got 4 major wine/liquor distributors, 1 of whom carries beer, and 2 major beer distributors. There's probably another 10 minor ones total among both categories.), so there's not much competition amongst them. That means that prices to the retailer are higher, and that's not going to be absorbed by my company, so the consumer pays. If there were no legally-protected distributor level, there might still be distributors (for breweries that lack the inclination or ability to self-market), but since they'd actually have incentives to do a decent job (as the brewery could fire them easily), there would be better service to the brewery and retailer (and ergo the customer).


I see why it was put in place, but this really sounds like an abuse of that system to me for sure.

And I guess that theoretical bar would probably be less horrendous than going to somewhere like an Applebee's... I avoid those places like the plague when I can, but sometimes it's the only place available when you are in a strange town...
 
2014-03-03 05:24:45 PM  
A lot of state regulations for the liquor industry in particular are antiquated and mostly still exist due to powerful interests "rent seeking" to prevent their change.

Rules regarding car dealerships are similiar.
 
2014-03-03 05:24:56 PM  

Fonaibung: You'll get over it.


Never.

/bring back the blue uprights
 
2014-03-03 05:47:16 PM  

Sim Tree: Why not simply fork a second corporation, transfer assets to the second corporation, and have the second corporation sign a contract with someone else?


Bingo!!
 
2014-03-03 05:50:24 PM  
I think that this is exactly what Republicans tried to enact in Wisconsin. They wanted to lock brewers into wholesalers and also prevent them from distributing their own product.  The big brands were wholly in favor of it since it would put a lot of the craft brewers out of business.
 
2014-03-03 06:09:24 PM  
Keep in mind that beer "distributors" are really salesmen.They don't sit on their backside waiting for people to order alcohol, they go out and convince stores/restaurants etc. to buy from them.  This is not an easy job, it takes  a lot of hard work and time to convince people to buy particular brands.


That is why they have such contracts - they don't want to put thousands of dollars into convincing a bar to stock Local Beer #1 and then lose the contract, never getting any of the profit, while the new distributor takes all the profit from their hard work.

What they really should do is permanently retain the right to sell the brand to any existing customer even though the new distributor gets an otherwise 'exclusive' contract for new customers.
 
2014-03-03 06:28:07 PM  

Mikey1969: But remember, it was created so that the big breweries couldn't open up mega-bars and stifle all possible competition. Can you imagine how crappy a bar OWNED and OPERATED by Anheuser Busch would be? Not that this is a good example of how the law is working for us, either...


That doesn't make sense.  (Not saying you're wrong- the reasoning behind many laws doesn't make sense.)

If that were an issue, just have a law that says breweries of a certain size cannot have their own bars.

Also, even if the reasoning did make sense... what's the deal with being locked into one distributor for essentially life?  Even if I give you that breweries need to go through the three-tier-system... why can't this dude switch from one to another?
 
2014-03-03 06:34:23 PM  

downstairs: Mikey1969: But remember, it was created so that the big breweries couldn't open up mega-bars and stifle all possible competition. Can you imagine how crappy a bar OWNED and OPERATED by Anheuser Busch would be? Not that this is a good example of how the law is working for us, either...

That doesn't make sense.  (Not saying you're wrong- the reasoning behind many laws doesn't make sense.)

If that were an issue, just have a law that says breweries of a certain size cannot have their own bars.

Also, even if the reasoning did make sense... what's the deal with being locked into one distributor for essentially life?  Even if I give you that breweries need to go through the three-tier-system... why can't this dude switch from one to another?


Apparently the craft brewers are allowed to sell their beer in their own restaurants.
 
2014-03-03 06:59:00 PM  

downstairs: Mikey1969: But remember, it was created so that the big breweries couldn't open up mega-bars and stifle all possible competition. Can you imagine how crappy a bar OWNED and OPERATED by Anheuser Busch would be? Not that this is a good example of how the law is working for us, either...

That doesn't make sense.  (Not saying you're wrong- the reasoning behind many laws doesn't make sense.)

If that were an issue, just have a law that says breweries of a certain size cannot have their own bars.

Also, even if the reasoning did make sense... what's the deal with being locked into one distributor for essentially life?  Even if I give you that breweries need to go through the three-tier-system... why can't this dude switch from one to another?


I've pointed out that this is a definite abuse of the original law, but it was definitely started to keep the big brewers from stifling competition. They could brew it(I think they could technically even own a bar), but they couldn't transport it. Like I said, in AZ, we discovered that driving the kegs from one location to another party was illegal, we had to have distributor pick it up at our Uptown location and bring it to our downtown one. We could sell in the location that brewed it, and we only had to pay a shipping fee to the distributor, but we had been breaking the law for a few months before we realized it.

I think this contracted for life thing is bullshiat if it's really like the brewery owner is representing it though. That really screws everybody but the distributor, and most of those farkers are rich already.
 
2014-03-03 07:57:27 PM  
Mikey1969:

I've pointed out that this is a definite abuse of the original law, but it was definitely started to keep the big brewers from stifling competition. They could brew it(I think they could technically even own a bar), but they couldn't transport it. Like I said, in AZ, we discovered that driving the kegs from one location to another party was illegal, we had to have distributor pick it up at our Uptown location and bring it to our downtown one. We could sell in the location that brewed it, and we only had to pay a shipping fee to the distributor, but we had been breaking the law for a few months before we realized it.

I think this contracted for life thing is bullshiat if it's really like the brewery owner is representing it though. That really screws everybody but the distributor, and most of those farkers are rich already.


A few years ago here one of the breweries created a batch to celebrate the anniversary of the repeal of prohibition and they sent the kegs to some other bars by a horse-drawn carriage for old time's sake...that was an odd thing to see.
 
2014-03-03 07:57:33 PM  
To be fair, Opa Opa is awful.
 
2014-03-03 08:21:35 PM  

Sim Tree: Why not simply fork a second corporation, transfer assets to the second corporation, and have the second corporation sign a contract with someone else?


That was my thought. The guy should get used to the idea of Apo-Apo beer.
 
2014-03-03 10:27:20 PM  

tarkin1: Keep in mind that beer "distributors" are really salesmen.They don't sit on their backside waiting for people to order alcohol, they go out and convince stores/restaurants etc. to buy from them.  This is not an easy job, it takes  a lot of hard work and time to convince people to buy particular brands.


That is why they have such contracts - they don't want to put thousands of dollars into convincing a bar to stock Local Beer #1 and then lose the contract, never getting any of the profit, while the new distributor takes all the profit from their hard work.

What they really should do is permanently retain the right to sell the brand to any existing customer even though the new distributor gets an otherwise 'exclusive' contract for new customers.


Sure. In exchange for their efforts I can see then getting a limited period of exclusive rights. That they have your brand *forever* is a bit much don't cha think?
 
2014-03-03 11:23:19 PM  

orangehat: Mikey1969:

I've pointed out that this is a definite abuse of the original law, but it was definitely started to keep the big brewers from stifling competition. They could brew it(I think they could technically even own a bar), but they couldn't transport it. Like I said, in AZ, we discovered that driving the kegs from one location to another party was illegal, we had to have distributor pick it up at our Uptown location and bring it to our downtown one. We could sell in the location that brewed it, and we only had to pay a shipping fee to the distributor, but we had been breaking the law for a few months before we realized it.

I think this contracted for life thing is bullshiat if it's really like the brewery owner is representing it though. That really screws everybody but the distributor, and most of those farkers are rich already.

A few years ago here one of the breweries created a batch to celebrate the anniversary of the repeal of prohibition and they sent the kegs to some other bars by a horse-drawn carriage for old time's sake...that was an odd thing to see.


That would be cool...

CSB time:
Every year for the Fiesta Bowl Parade, the Budweiser Clydesdales come to town, and they have team and handlers/support staff stay in downtown Phoenix. The Sunday before the parade, they hook the horses up to the wagon and go thru downtown, stopping at every bar for 10 or 15 minutes before moving on to the next one.

It's really cool. You actually get to go out, meet the horses, take pictures, talk to the driver, pet the horses, all kinds of fun stuff. The CSB part though is that I brought out carrots and celery for the Clydesdale team and got to feed them. Not only have I not run into anyone who has gotten this up close and personal (save the other people who worked downtown or were lucky enough to be there on one of those Sundays), I've never run into someone who's gotten to feed these horses a treat. It was really cool. God those horses are amazingly large up close...
 
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