Beer

Craft Brewers Threatened by Big Beer Brands


Pouring at the 2012 Great American Beer Festival in Colorado, which represents the largest collection of U.S. beers.

Courtesy Brewers Association

Pouring at the 2012 Great American Beer Festival in Colorado, which represents the largest collection of U.S. beers.

American craft brewers love to talk about how they’re stealing market share from the big beer companies, such as MillerCoors and Anheuser-Busch InBev (BUD). In the first half of the year, craft beer sales rose 14 percent, in dollar terms, according to the trade group Brewers Association. Their larger competitors can only dream of such gains in the U.S.

Craft brewers, however, are increasingly worried about how the world’s two largest beer companies are attempting to counter their growth by making beers that appear to be craft products—like MillerCoors’s Blue Moon and AB InBev’s Shock Top—with no indication on their labels that they’re produced by large multinational corporations.

Today the craft brewing industry called out the big guys in an op-ed piece in the St. Louis Post-Dispatch, the hometown newspaper of AB InBev’s North American division. It was written by Charlie Papazian and Bob Pease, the president and chief operating officer, respectively, of the Brewers Association, and Dan Kopman, co-founder of Schlafly Beer, a small independent brewer in St. Louis.

Here’s what they had to say:

Noting the expansion of the craft brewers’ niche and also that many beer drinkers are turning away from the mass-produced light lagers that they are historically known for, the large brewers started producing their own craft-like beers. However, they don’t label these faux-craft beers as products of AB InBev and MillerCoors. So if you are drinking a Blue Moon Belgian Wheat Beer, you are not told it is an SABMiller product. If you crack open a Shock Top, you are not told this brand is 100 percent owned by AB InBev. The large brewers also have bought or own 100 percent of smaller breweries like Goose Island, Leinenkugel and Henry Weinhard. They own significant equity stakes in Red Hook, Widmer and Kona breweries. They sell these beers through their strong distribution channels, but market these faux-craft beers as if they were from independent, locally owned craft breweries.

In an interview, Kopman told Bloomberg Businessweek that all brewers should label their products so consumers aren’t mislead about a beer’s origin. “We definitely need to discuss this as an industry,” he said. “We need to have an agreed-upon standard for transparency where you are a multinational or an independent.”

This craft industry’s increasing aggressiveness comes at a sensitive time for AB InBev. The Belgium-based company that bought Anheuser-Busch in 2008 is now seeking the approval of the U.S. Department of Justice to complete the purchase of Grupo Modelo (GMODELOC:MM). The last thing it needs is the small American brewers complaining that it’s trying to undermine their growth. That doesn’t seem to have escaped the craft industry either.

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Leonard is a staff writer for Bloomberg Businessweek in New York.

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Companies Mentioned

  • BUD
    (Anheuser-Busch InBev NV)
    • $112.83 USD
    • 0.63
    • 0.56%
  • GMODELOC:MM
    (Grupo Modelo SAB de CV)
    • $124.64 MXN
    • -0.06
    • -0.05%
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