04 May 2009 @ 4:13 PM 

If you’ve got your ear anywhere near the ground around beer news, chances are you’ve heard a little about Bell’s Brewery and their fight with local distributors. Their first fallout was in the state of Illinois (a fallout that indirectly managed to get Bell’s distributed here in North Carolina) and now they’re in court in their home state of Michigan.


I bring it up because traditional business news and beer geeks sort of approach this from two incredibly disparate angles. Most beer geeks will see that Larry Bell is bringing an Anheuser-Busch InBev distributor to court and say: “YEAH! The MAN is trying to keep the good beer DOWN! GO BELL’S! DOWN WITH THE THREE TIER SYSTEM!” – which isn’t entirely true, but is an admirable sentiment and only really takes in part of the picture. Then the Wall Street Journal publishes a piece titled “Eccentric Brewmaster Takes Distribution Fight to Court” which might not be the kind of view that somebody who’s trying to win a court case wants in the Wall Street Journal. It’s informational, and it’s a good (if short) article.. it’s just.. meh.

(Yeah, yeah. The Cafe. Yeah, Eccentric Day. I know. But saying it yourself in and around your brewery for branding of your cafe and product is a lot different than having the WSJ use it in the title of their article to describe you. Don’t you think?)

To sum up, if you haven’t been keeping up: Larry Bell is taking Classic Wines Ltd. to court for attempting to transfer (sell?) the Bell’s account to M&M Distributors Inc., an Anheuser-Busch InBev distributor. Bell’s contends that M&M “lacks experience selling craft beers and didn’t articulate to Bell’s a ‘coherent’ marketing strategy for its brands.”

So, to me, the suit is really about a brewery’s right to control its distribution. In the state of Michigan. I hope our side wins.

(Aside: This is one of those instances where the whole “State’s Rights” thing is actually somewhat of a pain in the ass. Interstate commerce is pretty damned common these days, you’d think that a Federal boilerplate/guidelines for distribution laws would be a nice thing to have. C’est la vie.)

In case you’re not up on distribution laws, a lot of them are a right bitch. In some states (this is an anecdotal example – take it as such), once you, as a brewery, are contracted with a distributor you are very much stuck with them. They now have all the rights for distributing your product and you have no control whatsoever. They can put your product in a hot warehouse, they can not get you tap handles, they can put it out on warm display or whatever. Your rights are that you can keep making beer and selling it to them when they want more. If they want more. If you pull out because you think they’re doing a crappy job they can charge you an amount that they say your contract is worth. It can be upwards of millions of dollars if they’re really out to screw you.

Basically, you have to trust a distributor to do right by you. Some distribution companies are awesome beyond belief. Some are unscrupulous asshats. Thus is the way of modern corporate America. They’re not always the most awesome people to deal with.

On the other hand, at some point you, as a brewery, need a distributor. Many states won’t let brewers self-distribute, they’re required to use a third-party. But even if you can self-distribute how much of your time and income is going to get tied up in buying trucks, hiring drivers, and spending time in establishments trying to wheedle a tap handle off of some guy who doesn’t care if you make good beer can you give him an extra keg under the table, because that’s what the A-B guy does? You just can’t do it. Sure, if you’re in a state where you can do so, you can start your own distribution outlet, but it really is a whole separate business. If what you really want to do is make beer, what you really don’t want to do is be a salesman for an array of different brands 5 days a week.

So, as a beer geek, appreciate your distributors (to a point) even if (sigh, yes) they’re A-B or some such crap, because they are getting good beer in for you. Hold your retail outlets accountable for problems with it, because they’re the ones in the best position to push back against the distributors if the beer that they’re delivering has been handled poorly. They’re also the ones that are in the best position to demand different brands and standard delivery procedures.

Even more so, support your local brewers who are fighting their asses off to get good beer into your hands.

Finally, the people who are really in the position to fix distribution laws are your state senators and representatives. Teach them to like craft beer, and there will be more and better beer for you.

As for Larry Bell? I have to say that I really see him as a brewer’s rights crusader. The guy is, plain and simple, sticking to his principles and his love of good beer and making things better for all breweries everywhere, even if he is just going one state at a time. I really hope that everything turns out in his favor, because it just means good things for the rest of us.

If you have some time to read stuff take a moment to read this story from the Chicago Reader about Bell’s pulling out of Chicago because of distribution laws. It goes over the history of distribution and a lot of the problems and bullshit tricks distributors like to play. Well worth reading.

In addition! Here’s an article with a lot of great specifics on Kalamabrew: Beer making, brewing and microbrews in Southwest Michigan.


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