Country Malt Group

[Rodenlager]

For years I have ordered grain through country malt group, and now they are charging homebrewers with existing accounts an extra $10-15 a sack.

Crud on us, and crud on them.

 

[finsfan]

Why would they normally charge a 20% homebrewer charge anyway? That seems ridiculous to begin with

 

[Pappers_]

This wasn't a review so much as a rant, with profanity, so I edited it. Cleaned up, and stated more factually and less emotionally, here are the points the OP made:

Country Malt a few years changed its policy and would no longer accept new homebrew (non-commercial) customers, but existing customers who purchased in the 12 months could continue to do so. The OP says that he has now been informed that Country Malt will be charging homebrew customers more than their commercial customers. He thinks this is outrageous.

Two comments from me:

1) Country Malt was purchased by an international company recently and many of their policies have changed.

2) Many wholesale suppliers (which is what Country Malt is) refuse to sell directly to retail customers. How is that underhanded? They don't want to be in the retail business, they sell business-to-business (LHBS and breweries). Nothing unusual or wrong about that.

 

[GilaMinumBeer]

Yes, Pappers. I agree in that I do not see it as underhanded. Most of these enterprises work wholesale. Toss in retail to HomeBrewers and then you have taxation. Do it nationally and then you have to keep track of what the tax rates are at each point of sale (not sure if this is still the case but for iNet sales the POS used to be the location of the purchaser). OR, have a flat rate surcharge that is equal to or exceeds that of the highest tax rate and be done.

 

[finsfan]

I guess I didnt realize they sold wholesale, that is understandable

 

[Rodenlager]

I don't see the fact that they charge homebrewers more underhanded, what I see as underhanded is that they are phasing us out as customers altogether.

I used to have the right to buy grain at wholesale prices, and I bought alot of it, and it was good.

But then CMG realized that they have a near monopoly on the grain market, and devised a plan to make as much money as they can, while controlling the supply for nearly the entire market. Then things started to change...

CMG started charging an extra 20% to homebrewers that bought less than 400 lbs.

CMG then expanded their business to include their own in-house brand of homebrewing store centric supply chain.

They then started turning away new homebrewing customers, even though they make more money per pound off homebrewers than they do off commercial breweries.

They then started removing inactive homebrewing accounts, thus forcing (now) former customers to purchase through a LHBS, (chances are it would be a LHBS they sell product to, how fortunately coincidental for them, no?)

Then they increase the homebrewer prices yet again by more than 30% across the board, and refuse to sell certain items hops by the pound, cleaning agents, and sanitizer to homebrewers.

So now, we're essentially forced to go through another vendor (see middle man/LHBS) for our supplies and pay retail.

How does this not seem underhanded to you?

 

[GilaMinumBeer]

So now, we're essentially forced to go through another vendor (see middle man/LHBS) for our supplies and pay retail.

You mean just like everything else consumers buy? Blasphemy!

 

[GilaMinumBeer]

But then CMG realized that they have a near monopoly on the grain market, and devised a plan to make as much money as they can, while controlling the supply for nearly the entire market. Then things started to change...

CMG started charging an extra 20% to homebrewers that bought less than 400 lbs.

CMG then expanded their business to include their own in-house brand of homebrewing store centric supply chain.

They then started turning away new homebrewing customers, even though they make more money per pound off homebrewers than they do off commercial breweries.

They then started removing inactive homebrewing accounts, thus forcing (now) former customers to purchase through a LHBS, (chances are it would be a LHBS they sell product to, how fortunately coincidental for them, no?)

Then they increase the homebrewer prices yet again by more than 30% across the board, and refuse to sell certain items hops by the pound, cleaning agents, and sanitizer to homebrewers.

Seems to me they entertained the idea of providing to a smaller retail market and decided it wasn't worth the effort to cater to a whiny bunch of penny pinching know-it-alls. Because, admit it, you know those are the homebrewers they heard from the most. "I ordered my 2 pounds of grain yesterday, why hasn't it delivered yet?"

So, they increased their prices to make it more worthwhile. Also, have you seen the price of diesel? I gurantee you that factors in too.

Do you have any idea how much of a PITA it is to a wholesaler to have to break open a case of a product for individual sale? The extra effort to track stock? Most commercial accounts are buying product by the sack, by the pallet, by the full case. Not by the gallon, pound, or ounce. Keeping small stock is a HUGE PITA for a wholesaler. And frankly, produces more overhead.

 

[TyTanium]

Dude, let it go. You had it good for a while, now things have changed. They're trying to run a business and are free to make whatever decisions they choose.

But then CMG realized that they have a near monopoly on the grain market, and devised a plan to make as much money as they can...

...yes. Wouldn't you?

 

[hunter_le five]

I don't see how phasing out small customers can possibly be construed as "underhanded". It's a sound business decision. Small customers are a lot more costly to service than large ones. They've determined that it's best for them as a company to focus on the wholesale side of their business, and let their customers handle the retail market. It just makes sense.

...and devised a plan to make as much money as they can....

....That's generally the purpose of a business, yes.

 

[Rodenlager]

I don't see how phasing out small customers can possibly be construed as "underhanded". It's a sound business decision. Small customers are a lot more costly to service than large ones. They've determined that it's best for them as a company to focus on the wholesale side of their business, and let their customers handle the retail market. It just makes sense.



....That's generally the purpose of a business, yes.

So, just to be clear...to all that are part of this conversation.

This grain we're talking about comes to their warehouse on a train, it is then transferred into 50-55 pound sacks and never sold to anyone in any increment less than 50-55 lbs sacks.

In order for a micro brewery to order 800 lbs. of grain they call up and place an order, which is then entered into their computer system by the lady on the other end of the line, sacks are then pulled off of a pallet in the warehouse and placed on a pallet in the loading dock for said brewery to arrange pickup themselves.

In order for me to order 800 lbs. of grain I go through the same process as a microbrewery, and they do the same amount of work they would do to fill an order for a microbrewery, but make an extra $150 - 200 off of my identical order just because I'm an individual. I don't see how that's fair, and I definitely don't see how it costs them any more money to fulfill my purchse order. Someone, please explain how it costs them more to service an individual account they make 30-40% more profit on, for the same amount of work.


Makes total business sense to me., and doesn't seem like they're shafting the little guys at all.

 

[TyTanium]

They owe you no explanation. They are business free to do as they will.


However, I have two comments:
They need to draw the line somewhere. They aren't a retail operation, so drawing the line at homebrewer vs pro instead of an arbitrary number like X sacks seems more reasonable
And I would venture a guess pro breweries place orders more often. So on the margin, the cost may be the same, but in total (i.e., total cost of a customer) may not be.

Also, you may be right, and they may be missing out on a profitable customer, and it may not make business sense. But that's entirely their call. Not yours. It's on you to convince them otherwise.


Edit: If you're just coming here to vent, that's cool. In which case, man, what a bummer. That stinks dude. Not cool. Wish they'd be more open to helping the little guys.

 

[bmason1623]

There are alternatives and options...

 

[Weezy]

They're a business and can do what they want. They'll still sell at the lower rate to anyone with a registered business and a loading dock capable of receiving palatalized truck shipments. When they decide they'll only offer the lowest prices to LHBS or breweries, then I'd be upset.

 

[JJL]

I have to agree with CMG on this one. If they want to be a B2B operation only, that's completely their choice. Speaking from experience, for a B2B company to have to service B2C customers is a huge PITA, and it costs substantially more to process a small customer order than a large customer order as a percentage of the sale. And I know you keep throwing around this 800lb order you place, but that's probably not even a full pallet of product. And if it's mixed product that's a real pain. It's just not worth it in most cases once the business has grown to a certain level. Servicing small customers actually hurts the company's profitability. The other reason B2B's don't sell B2C is because they don't want to undercut the pricing of their wholesale customers. What reason does an HBS have for buying malt from CMG if the HBS's customers can go straight to CMG and get a better price. CMG is likely expanding their business and operating more profitably but cutting out the B2C sales. It's unfortunate for you and others who have benefitted in the past from wholesale pricing, but that's the way it goes.

Besides, there are other ways to get around this. HBS's do group buys all the time where they offer the wholesale or near wholesale pricing direct to their customers. You could also start an LLC. Depending on your state, it might cost a few hundred dollars, but then you can buy all you want at wholesale pricing.