CO HB1284 and SB194 bills being OPPOSED by AHA? I dont get it.

[chumprock]

Yesterday BigKahuna brought a story to my attention about the two colorado bills that will attempt to allow supermarkets and convenience stores the ability to sell beer.

Here is the link to BA's stance that BK provided me:

http://maildogmanager.com/page.html?client=aobhtml::cid=2985::drct=1


I dont understand why an industry would oppose greater availability in more stores? Thye say it would only enable the Big box & super gas stations, and limit overall choice, but I dont understand *HOW* they have drawn that conclusion?

It doesnt make sense at all to me. In NYS, we can buy beer in grocery and convenience stores, and they are ALL starting to see a market for craft beer. Sure Wal-Mart and the small corner store probably wont change much, but we have a super-chain (Wegmans) that have built entire new sections of their store to fit an aisle of craft beer. In one store, they even have TV monitors explaining/educating about different craft beers!
There's also several "corner stores" and beer stores that cater almost specifically to their craft beer market..

For example (and no, not the norm) this is a photo my wife took of the Nathaniel Square Corner Store in Rochester, NY.

http://beerlens.com/2010/06/08/nscs/

Not a bad selection for a "conveniece store?, dont you think??


I can only assume I'm either missing something, or they know something we dont (and aren't disclosing it), or they are taking a "side" with the liquor stores who claim the revenue loss will kill them.

 

[Nateo]

In CO we have a lot of little mom-and-pop liquor stores all over the place. I have three within easy walking distance, and they're all closer and more convenient than any convenience store. They all have a good selection of craft beer, but you pay a price premium for it compared to the bigger liquor stores. Six-packs tend to be $1-2 more at the little stores than the big ones.

Some of these stores are good and should stay in business, some are bad and should go out of business. They all only stay in business because you can't get anything over 3.2ABW in a grocery/convenience store.

I haven't been to many convenience stores in NY, but in MO convenience stores sell everything, including hard liquor. Their selection of everything is pretty bad. There are a few liquor stores with decent selection, but they're few and far between.

Just outside Denver county there is a super Target that sells liquor and beer. Their selection is worse than most of the mom-and-pop liquor stores. I have no reason to think that Safeway's or King Sooper's selection will be any better, and I doubt any of the convenience stores around me have the space, desires, or knowledge to carry a good selection.

 

[SpanishCastleAle]

So...if these convenience stores and grocery stores won't have a good selection then they should be no threat to the mom&pop liquor stores...so the bill should be allowed to pass. Still doesn't add up.

 

[bob1852]

I don't get it.

In AZ, places like BevMo and Total Wine have incredible selections of all beers...

I would think a place like CO with all of their micros would welcome broad distribution throughout the state at all stores (gas stations, grocery stores, convenience stores, liquor stores, etc...).

 

[Nateo]

Well, in CO New Belgium is a big seller, and they probably sell more beer than every other brewery in this state combined. They make a lot of beer I consider "middling" but a lot of people consider the height of craft beer. Let's say the grocery store started selling New Belgium's beer for less money than the liquor store. If most people who buy New Belgium start buying it at the grocery store, and Ted's liquor store loses half its revenue, or even a quarter of its revenue, Ted is going out of business.

Yes, the bill is protecting a monopoly. Yes, I'm opposed to monopolies in principal, but we have monopolies in a lot of different industries unfairly protecting huge corporations. Why not unfairly protect Ted?

Big stores will only carry the "craft" brands that are the biggest sellers. The market for all the little breweries is so much smaller it won't be profitable for the big stores to sell those, and it won't be profitable for the little stores to sell ONLY those minor brands.

 

[bob1852]

Then maybe Ted should open a grocery store?

 

[chumprock]

Big stores will only carry the "craft" brands that are the biggest sellers. The market for all the little breweries so much smaller it won't be profitable for the big stores to sell those, and it won't be profitable for the little to sell ONLY those.

How and WHY is this assumption being made??
If craft beer is as "big and exciting" in Colorado as everyone makes it out to be, don't you think stores would begin to cater to their customers?

And I still dont understand how in the world this would be bad for craft beer.

 

[bob1852]

Wasn't there something going on in CO recently as well pertaining to bars and sale of only "full strength" beers (meaning Bud and Coors could be sold, but not Guiness)? How did that play out?

 

[jkarp]

It's complicated.

Colorado does have a thriving ecosystem of independent liquor stores. Go into any strip mall liquor store and the beer selection will blow away any out-of-towner. The harsh reality is though, craft beer isn't where these liquor store owners make their money - it's BMC. If Wal-Mart and Target get to sell BMC at their discount prices, this critical source of revenue for the liquor stores will dry up and many will close, cutting off our access to the tasty craft beers.

The reality is, for the majority of beer drinkers, this bill is a good deal. They'll be able to get their daily dose of BMC more conveniently and cheaper. For the craft beer drinker though, it's disaster. CO will become like SC where only the biggest "craft" brewers can command limited Wal-Mart and Target cooler space, and the selection at the local Greens is laughable, at best.

 

[Wayne1]

Here are a few more thoughts on this bill:

http://www.beerdrinkersguidetocolorado.com

Denver Post: Bill Johnson column

Mike Bristol (Bristol Brewing) editorial in C.Springs Gazette

 

[bob1852]

Here are a few more thoughts on this bill:

http://www.beerdrinkersguidetocolorado.com

Denver Post: Bill Johnson column

Mike Bristol (Bristol Brewing) editorial in C.Springs Gazette

Thanks Wayne.

Do you know why "the system" wouldn't allow it? Is this more three-tiered crap?

Here's why: Based on conversations I've had with four major grocery and convenience store representatives, their system simply doesn't allow for selling a variety of local choices

 

[Nateo]

Wow Wayne, thanks for the links. Very informative.

 

[Nateo]

It seems to me that grocery and convenience stores are profitable because they squeeze their wholesalers for lower prices, and they have leverage to do so because they're buying hundreds or thousands of units at a time.

I work at a mid-sized retail chain here (4 stores, but owned by a big corp), and we have buyers at the corporate level. I've tried to get them to bring in local products, but the buyer's jobs are based on what kind of "deals" they can get. If their margins aren't good, or if the stuff they buy doesn't sell quickly enough, they lose their bonus, and if they do poorly enough, their jobs too.

The buyers are all too concerned with losing their income to take any chances, so they buy the cheapest crap they can, that they know they can sell quickly.

 

[weirdboy]

I don't get it. We don't have protectionist laws for craft beer in California and we still seem to have a pretty good selection of local breweries.

 

[Wayne1]

Thanks Wayne.

Do you know why "the system" wouldn't allow it? Is this more three-tiered crap?

Not really. The three tiered system in Colorado is in existence, but doesn't come into play for most craft brewers, unless they want it to.

A goodly amount of the larger craft breweries are distributed by Coors Distributing Company. A couple of years ago, CDC bought up a few smaller distributors. I believe they are the largest distributor of Colorado craft beers. Beers that are distributed by CDC get good exposure and are looked after rather well. The stock gets rotated on a regular basis. Other distributors are not as attentive. I do see quite a bit of old stock in my local liquor stores.

The smaller production breweries self distribute. Depending on their resources, it can be a strain to deliver to multiple accounts throughout the state. That is why some, like Bristol, self distribute close by the brewery and hire a distributor for accounts farther away.

What "system" is being referred to is the way the national chains purchase. One buyer makes a decision on what ALL the stores in a region will stock. If you cannot supply ALL the stores at a price they want, you will not get in.

That limits the selection to those breweries that can supply the quantities the nationals want. This could also limit the variety that a particular brewer can produce. If most of their capacity is being taken up making an American Pale Ale, they cannot make their specialty brews.

There are currently 146 breweries in Colorado. At least six more will open in the next couple of months. Most of those are planning to operate as a draft house and sell kegs to bars. This course of action should work for them. For those that package for retail, the future is pretty hazy.

 

[olllllo]

Just to be clear, the BA and AHA are not taking a position. They are notifying BA / AHA members that the Colorado Brewers Guild opposes this legislation.

March 28, 2011
Dear AHA, BA and Support Your Local Brewery Members,
The Colorado Brewers Guild has requested that beer enthusiasts take action to oppose legislation detrimental to the state's small brewers and beer consumers.
Please read the following information provided by the Colorado Brewers Guild:
...

Thanks for your continued support of Colorado small brewers,

Carefully worded. Just like last year.

You could look for and probably not find an official BA/AHA position on this. Last year this issue came up and I pressed BA and they responded that they are only asking for people to be involved and informed on the issue and communicating the CO Brew Guild's wishes.

It might be small point in the debate, but i thought I would make sure you aware.

 

[SpanishCastleAle]

Much more clear now thanks to the links/explanations. I think I still have some issues but those are probably fodder for the debate forum.

But the 146+6 (or 9 per one of those linked articles) craft breweries in CO seems like a LOT. At what point are there too many breweries in one state? They are all competing for a small-ish (yet growing) market as it is. We like to think we like a bazillion choices but studies have shown just the opposite. Give people 30 choices and they get overwhelmed and don't buy anything at all...give them 4 solid choices and they can't get enough.

 

[Nateo]

Castle - I think you underestimate the craft beer market here in CO. I haven't been everywhere in this country, but from my experience, CO has a hugely disproportionate number of people with strong opinions on beer. Most people I talk to are convinced they know a lot about beer (whether or not they do). It's cliched to say so, but beer is really "a way of life" here.

I don't see that going away, even if this bill passes, but as the articles said, many independent liquor stores will go under, some breweries will go under or retool their strategy, people will lose their jobs, all so what, you can buy Fat Tire at Safeway? Doesn't seem like a good deal to me.

 

[bob1852]

I can buy Fat Tire at Circle K in Arizona...(usually for more than what it costs at Safeway, or Beverage House, or BevMo, or Total Wine).

I can't recall any liquor stores closing because of this issue in Arizona. Again, that's probably because Arizona never really had the mom & pop type stores and always had the mega-marts...

 

[jkarp]

I don't get it. We don't have protectionist laws for craft beer in California and we still seem to have a pretty good selection of local breweries.

Having just got back from a business trip in LA, I'll volunteer that BevMo was quite unimpressive. Even my local liquor store (which is really average for CO) has 12+ coolers for beer alone, plus a walk-in with nearly 300 bombers.

 

[weirdboy]

On the other hand it is unfairly restricting the rights of convenience store and grocery store owners, not all of which are Safeway or 7-11.

Maybe there's some independent convenience store or gas station owner that really wants to offer a nice bottle selection for people stopping to fuel up, but they can't.

 

[Wayne1]

Much more clear now thanks to the links/explanations. I think I still have some issues but those are probably fodder for the debate forum.

But the 146+6 (or 9 per one of those linked articles) craft breweries in CO seems like a LOT. At what point are there too many breweries in one state? They are all competing for a small-ish (yet growing) market as it is. We like to think we like a bazillion choices but studies have shown just the opposite. Give people 30 choices and they get overwhelmed and don't buy anything at all...give them 4 solid choices and they can't get enough.

A very large portion of the craft breweries in the state are brewpubs that choose not to package their beer. Some offer growlers, Party Pigs or bottles to go. The smaller micros pretty much just serve beer through their "tasting rooms" some may offer kegs to a close by bar.

This law may hurt the small to mid level micro or brewpub that is trying to offer their products to a larger market. If the local liquor store goes under, then there will be no place to get these small batch beers.

I do think there is a niche in the Colorado market that has not been explored. That would be a Colorado ONLY liquor store. Try to gather all the products offered by all the breweries, wineries and distillers under one roof. This would be an area the chain stores couldn't touch.

Patty Calhoun, the editor of Westword, local free "alternative" weekly newspaper, has been pushing for such a store at DIA for years. Just the thing for a traveler to bring back as a souvenir of their Colorado trip.

 

[weirdboy]

This law may hurt the small to mid level micro or brewpub that is trying to offer their products to a larger market. If the local liquor store goes under, then there will be no place to get these small batch beers

Really? They'll just stop selling them in bars and restaurants, then?

 

[Wayne1]

Really? They'll just stop selling them in bars and restaurants, then?

Perhaps not, but I am not aware of very many bars or restaurants selling the Woodcut or Lips of Faith releases.

I do not get out very much, however.

 

[weirdboy]

I get Lips of Faith releases here in my local haunts. Plus I can pick them up in various bottles shops around my area.

I just think this is a debate between liquor store owners and grocery/convenience store owners, and the brewers are upset because their existing distribution relationships will have to change. It is not clear to me that automatically this means that all of a sudden Safeway and 7-11 will have a stranglehold on the craft beer industry. There are local convenience stores that have great beer selections around here. How many are there in CO right now?

 

[chumprock]

Thanks for all the links and information! I have some reading to do.

I still think any legislation that would increase the outlets for sales would be a good thing..

 

[Pilgarlic]

this occurs to me: if someone had posted the proposed legislation here and invited debate and opinions, one might have wisely said "I know, let's ask the Colorado Brewers Guild what they think? Surely they have more at stake, more information and have thought and talked about it alot more than we EVER could!" And that would be right, I think. So who are these people?

Officers and Terms: Eric Wallace - Left Hand Brewing President, Dave Thibodeau - SKA Brewing, Vice President, Kris Oyler - Steamworks, Secretary, Mike Bristol - Bristol Brewing, Treasurer, Adam Avery - Avery Brewing, Dwight Hall - Coopersmith's, Doug Odell - Odell Brewing, Chris Lennert - Left hand Brewing, Marty Jones - Oskar Blues, Eric Wallace - Left Hand Brewing, JB Shireman - New Belgium Brewing.

I offer this because, as to the question of whether the measure is good for Colorado's craft brewers, I would think the deliberate position of the CO Brewer's Guild would be considered authoritative in the absence of some real reason to believe it's flawed.

This wouldn't apply to whether it's good for consumers, good for the entire beer industry, good for the economy or fair, of course, but in my mind I'd consider the "Is is good for CO craft brewing?" settled.

 

[BARBQ]

i thought the Texas beer laws were bad.

You cant buy beer at a Gas Station? wow. In Louisiana they sell liquor at the gas station.

 

[SpanishCastleAle]

I still think any legislation that would increase the outlets for sales would be a good thing..

I think their contention is that the net result of this legislation would be a decrease in the outlets for craft beer sales. The grocery/convenience stores won't stock them and there would be fewer liquor stores around that would (because a bunch of them went out-of-business).

 

[SpanishCastleAle]

i thought the Texas beer laws were bad.

You cant buy beer at a Gas Station? wow. In Louisiana they sell liquor at the gas station.

You can but it must be <3.2% ABW beer...and the liquor stores can't sell the <3.2-stuff (I think I got that right). If you want a six of Guinness and a six of Oskar Blues I guess you have to go to two different stores.

 

[jkarp]

You can but it must be <3.2% ABW beer...and the liquor stores can't sell the <3.2-stuff (I think I got that right). If you want a six of Guinness and a six of Oskar Blues I guess you have to go to two different stores.

Guinness is 4.2%, so no.