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The Great Beer Challenge

How Two Companies Control Your Options

At a time when you’ve never had more beer-drinking options, major brewing companies and some beer distributors are taking steps that limit your access. Among other things, they want to maintain restrictions on how beer gets from brewers to liquor stores and bars.

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A guy walks into a bar.
“You guys got any craft beers?”
One bartender shrugs.
“How ’bout a Bud Light?”
Another bartender raises an eyebrow.
“We got Bass Ale.”
The guy walks out of the bar.

That’s not a punch line to a joke. That’s the sobering reality that too many beer drinkers face today.

For example, beer distributors are fighting to maintain restrictions on how beer gets from brewers to consumers. And many consumer advocates allege that distributors are encouraged by big beer companies to circumvent laws that are designed to limit what distributors can offer to retailers (think free beer and other perks) as an incentive to stock their business partners’ products. Big beer companies are creating packaging gimmicks and products—including their own craft-brew brands—to flood store shelves and bar taps with their own labels, so there is little or no space left for beer that is made by smaller competitors. Even some of the largest craft brewers take the same rival-killing approach to bolster their profits.At a time when there are 1,600 craft-beer manufacturers in the United States, your selection of beers at local pubs, supermarkets and liquor stores is likely to consist primarily of brands that are owned by Anheuser-Busch/InBev or MillerCoors, a few imports and a couple of brands that are made by larger craft brewers. The largest companies that make beer and many of the companies that distribute it have done everything that they can to squeeze out the brands that are made by the skyrocketing number of craft breweries across the country.

In short, the most powerful forces that are in the beer industry are trying to limit your access to new and unique brands. Anheuser-Busch/InBev and MillerCoors still account for nearly 80 percent of all sales, according to consumer-research group Mintel. But craft-brew beers increasingly are tapping into the market and now account for 5 percent of the $101 billion in annual U.S. beer sales. From 2005 to 2010, the number of adults who drink craft beer increased to 28.8 million from 18.8 million—a more than 50 percent increase—even as the number of total beer drinkers decreased slightly.

Although it’s good news that some distributors finally are adding a few craft-brew brands to their menus, smaller breweries typically still face an uphill battle in getting their beer to market. And that means that beer drinkers pay the price in terms of a limited selection.

TIER IN YOUR BEER. If beer-distribution laws were changed to allow craft brewers to sell their products on the Internet and to more widely sell their products directly to bars and retail stores, consumers would have much better access to different beers, experts tell Consumers Digest.

But many of the 3,300 companies that deliver beer to stores from brewers are determined to preserve the distribution system that’s been in place since the end of Prohibition. Distributors see any attempts to reform the so-called three-tier distribution system as a threat to their existence. National Beer Wholesalers Association (NBWA) President Craig Purser tells Consumers Digest that the three-tier distribution system helps consumers, because it allows more craft brewers to survive. NBWA’s argument is that an independent distribution system prevents the deep-pocketed major beer companies from creating their own distribution system, which would make it even harder for craft brewers to get their beer to consumers. Even some craft brewers, particularly the larger ones that have been able to break into the three-tier system, agree with this point.

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