Photo courtesy of NBWA.
The National Beer Wholesalers Association (NBWA) kicked off the first full day of its 78th Annual Convention and Trade Show this week at Caesars Palace in Las Vegas.
NBWA’s outgoing Chairman of the Board Eric Best started by describing what he sees as the virtues of the beer distribution system: “The three-tier system offers opportunity for American consumers to enjoy the largest selection of beer anywhere in the world. It provides to have all of this robust competition and business growth while balancing it with public safety and consumer protection.”
NBWA President and CEO Craig Purser highlighted how distributors can prepare for the future, especially in a dynamic industry operating in a marketplace “evolving right before our eyes.”
Purser pointed to the successes of the open and independent distribution system, citing that, in the 1980s, there were fewer than 50 breweries operating in the United States. And there are now 4,000 breweries in operation across the country.
“This system is giving the consumer choice and adding value to the retailer. And that value is getting the right beer to the right consumer,” he said. “This system is working well, and it’s up to us to protect and strengthen it.”
Purser also mentioned issues he believes are challenging the system. He noted some of the recent environmental changes in the industry, including brewers and importers operating under new leadership, the incredible amount of new capital flowing into craft beer and big acquisitions.
In reference to the potential acquisition of SABMiller by Anheuser-Busch InBev, he said: “The global market power that results from this new entity could be like nothing this industry has ever seen. The impact worldwide related to raw materials, market share and overall influence is staggering. That is why antitrust regulators and antitrust officials must give this acquisition thorough scrutiny and exhaustive review. We want to ensure that the American marketplace – an orderly marketplace – isn’t negatively impacted by an increase in global power.”
“At the same time, this proposed global deal reinforces the value of the open and independent American distribution system,” Purser continued. “What better way to demonstrate the value of having three separate tiers – a system that gets new brands to market, generates robust competition and delivers the best selection and value to retailers and consumers?”
Purser touched on the importance of limiting the expansion of large brewer ownership of distributors, noting, “Competition is weakened and consumer choice is reduced when one tier can own or unduly influence the others.”
But he also said that three-tier exemptions designed to help new brewers get established should not be expanded to give larger brewers additional advantage in the marketplace.
“We need to be mindful of marketplace pressures from suppliers of all sizes related to companion brands or competing brands,” Purser said. “The open and independent distribution system works best when distributors are free to focus on growing their entire portfolio – and getting the right beer to the right consumer.”
In the spirit of the NBWA annual conference, here is a bunch of distribution features:
Distribution contracts: What to know before you sign
Distribution advice from five top craft beer distributors
Craft beer distribution: Study the market, distributors and your own operations
NBWA: ‘Competition is weakened when one tier owns others’ https://t.co/G580oySUhG via @craftbrewingbiz