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AB InBev cuts off craft breweries from South African hops this year

May 16, 2017Chris Crowell

AB Inbev hops
Hope you weren’t excited about any hops from this region.

When the now familiar merger of Anheuser-Busch InBev and SABMiller first popped up in September 2015, it all felt too large of a scale to comprehend. How would these global chess pieces really effect the small, U.S. craft brewer? In his initial commentary after news broke, Brewers Association Director Paul Gatza mused on the long-term impact on ingredients.

Coors, SABMiller and Anheuser-Busch each conduct barley variety development programs, and own malting capacity to varying degrees, suited to their needs. After an ABI acquisition of SABMiller, the amount of malting capacity owned by the combined largest brewer potentially goes up which could tighten availability of malting capacity and interest in diverse malting lines for every else. This year, craft brewers will consume 33-35% of all malt used by U.S. brewers, and that proportion will continue to grow in coming years. Craft brewers as a group can help themselves by simply doing the business they need to do. Larger craft brewer requests and contracts to malt different barley lines will be crucial to creating availability for all brewers for malts better suited to all-malt brewing. In this regard, the large malting companies which do business with craft brewers will play a crucial role in binning and malting these varieties. Indeed, this year large maltsters have announced plans to lay in significant new capacity. We have also talked for a few years about how craft maltsters are going to be very important to create greater diversity in malt – geographic, varietal and flavor-wise. That importance may have just grown significantly.

At first thought, the hop market may not be as affected as much, as pricing by volume of need seems to be built into the market, although the idea that one gihugic buyer will have even more pricing muscle with hop growers and dealers is something worth more thought. Hop grower and dealer cash flow has changed significantly in recent years as larger customers have pushed their payment terms out, which has resulted in the terms offered to craft brewers becoming shorter in many instances. One massive buyer could have increased leverage over growers.

Does that day draw nearer? The first big effect on ingredients comes not from the behemoth’s buying power but rather from its specific control of supply. Under Beer Voltron’s domain sits South African hop producer SAB Hop Farms and, wouldn’t you know it, reports have surfaced that the Big Beer company is cutting off all breweries outside of its umbrella from this supply.

From Food and Wine:

Greg Crum, founder of ZA Hops, the brokerage that was selling SAB Hop Farms’ excess stock in the US, believes the move is “anticompetitive.”

“The goal is to sell the hops internally to their acquired (former) craft breweries, even though they have not been able to sell all the hops as of yet,” Crum told his customers. “Regardless, they refuse to let US craft brewers buy any CY 2017 hops believing this will afford them a competitive advantage in an increasingly competitive marketplace.”

Part of Crum’s frustration is that he believes some of these hops will simply end up in cold storage, even though he says he showed AB InBev it could make more money by selling them on the open market. “They don’t want craft brewers to have them,” he claimed according to Brewbound.

AB InBev has tried assuaging fears because of the smaller global production numbers and the recent low yields that made it necessary to only feed itself the most recent harvest — and saying it could open this channel back up again with a better supply in 2018 — and hey, it might be right. But one can’t help but not provide a benefit of the doubt when it comes a seemingly anti-competitive move from a corporation that solely exists to dominate the beverage industry across the globe.

Here’s really why craft beer is better than Big Beer (A-B InBev and SABMiller merger react)

 

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Watch: BSG Hops brings Humulus U online in 2020, now dig all these free modules on hops and brewing
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Yakima Chief Hops adds solar panels atop six of its buildings

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  1. #Biergebabbel: Früchte im Bier - Muss das? - Hoptimizer says:
    June 4, 2017 at 10:13 am

    […] ein Hopfen nur ansatzweise in großen Mengen oder gar nicht schafft. In Zeiten, in denen ein Großkonzern mal eben die komplette südafrikanische Hopfenernte aufkauft, kann der Griff zu Früchten auch mal eine interessante Alternative sein, um seine […]

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