Wednesday, December 12, 2007

If the Goliath Has the Distributors In His Pocket, It's Time For David's Sling

Craft brewers are small brewers who brew beer much more like homebrewers do and eschew the tricks of the mass marketed beers such as those of Anheuser-Busch, Miller, and Coors. Craft brewers have about 5% of the U.S. beer market; imported beers have about 11%. Anheuser-Busch, Miller, and Coors have over 80%. Read David Kesmodel’s article, "Small Brews Show They're Not Weak Beer: As Popularity Rises, Specialty Brewers Challenge Distributors" (Wall Street Journal, December 10, 2007; Page B1.) State beer distribution laws sound like one more "consumer protection" law that harms competition, consumer choice and consumer welfare.

3 comments:

Alex Moseley said...

Although I dont know much about state beer distribution laws, they seem a little inappropriate. Why protect large brewers from smaller competition possibly stealing shelf space on transportation opportunies from distributors? It will require AB, Miller, and Coors to (hopefully) lower their prices to adjust to areas of the country where local/small firm products are becoming more marketed, available, and demanded.

Furthermore, I dont understand why Brewers would not be allowed to "termination a distributor except under certain circumstances, such as fraudulent business dealings." Assuming a written agreement is not in affect, there is no reason for laws to keep brewers draining time and their products into companies they do not wish...especially when distributors are allowed to rid themselves of brewers and sell the rights to other distributors anytime and without the approval of the brewer.

Erin Knight said...

It seems obvious that the laws governing a brewers ability to control distribution are outdated and not appropriate based on the new types of volume small breweries are producing in local markets. Consumer protection against market giants such as the big three mentioned should stay in place, but laws based on volume would be more suitable for micro-breweries.

TaDonne' said...

sounds like consumer protection laws can be over protection against the market. As small business owners, laws that hinder the consumption or even distribution methods or rights can lead to a decrease in sales volume. Which of course can be bad for business.