Sunday, November 12, 2017

The Illusion of Choice in the Taproom


-by Austin Frerick,
candidate for Congress, IA-03

We’re living in a golden age for craft breweries. Data collected by the U.S. Census Bureau show the number of U.S. breweries grew from 398 in 2007 to 5,766 in 2015.

Craft breweries are a great example of innovative new small businesses challenging monopolistic incumbents. More than 98% of all breweries are locally owned small businesses. These are the type of businesses that grow our local economies.

But the beer monopolies are clever. Anheuser-Busch InBev and MolsonCoors sell 71% of all beer in the USA, which leaves very little room for craft breweries. Yet mega-brewer Anheuser-Busch InBev still finds new and more innovative ways to take independence away from these small businesses. It recently created ZV Ventures, a wholly owned venture capital firm that has been quietly investing in beer ratings websites and delivery services and using them as mechanisms to stifle competition.

Since 2011, Anheuser-Busch InBev has bought 10 craft breweries, including Goose Island and Elysian, to compete with local craft brewers. Anheuser-Busch InBev’s ownership stake in rating websites could allow it to manipulate the ratings to push the craft breweries it owns rather than its smaller competitors. Paul Gatza, director of the Brewers Association, a trade association for craft brewers, expressed concern that Anheuser-Busch InBev’s ratings websites could confuse consumers and would be used to try to influence sales. Sam Calagione, founder of Delaware’s Dogfish Head brewery, echoed this sentiment because of the illusion of independence that these sites project.

Goal ThermometerWhat is happening in the beer industry is a microcosm for our economy at the moment. Economists across the political spectrum agree that monopolies harm small businesses and communities and also lead to higher costs and lower quality for consumers. Yet huge corporations are gaining monopolies in many industries. For example, one company has a 73% market share in baby food. One company has 47% market share in pet food. It happens to be the same company: Nestle.

When the robber barons of the gilded age grew too powerful, visionaries like Teddy Roosevelt stepped in to restore competition. Let’s allow craft breweries to thrive. If we want local small businesses to have a chance in the modern economy, we have to enforce our antitrust laws and stop barons like Anheuser-Busch InBev from robbing us.

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At 3:17 PM, Anonymous Anonymous said...

I quit drinking all inbev/bud products years ago. Not only are they crap, but there are several good brewers in my tri-state area. Costs more but the quality and selection far exceed the garbage from the big multinat corporate piss brewers.

Whenever possible, I go to the brewery for their latest house brews. Don't care for the IPA and Stout fetishes these days, but a good Pilsner can still be found.

At 6:26 PM, Anonymous Anonymous said...

Who in their right minds would pay for beer-flavored water and think they were drinking the real thing?

At 8:09 PM, Anonymous Anonymous said...

Hurt so much when Iowa native and University of Northern Iowa graduate John Hall sold a majority stake of Goose Island to In-Bev.

Living in the Twin Cities, we have a number of breweries and taprooms, with what seems to be a new one opening every month. There will be a shake out (frankly, some offer inferior product that even the most homerish of Minnesotans will avoid) but we are not close to a peak here.

And I see my hometown of Cedar Falls, Iowa, has two taprooms and a third on the way, including SingleSpeed. SingleSpeed not only opened on the Parkade in Cedar Falls (still running that one) but then decided to invest further and renovate the closed Wonder Bread Bakery in Waterloo into a larger operation. It was a great old building and they kept a ton of the original character while adding jobs and another dining/taproom option in Waterloo. It is great to see the next generation of business people succeed.


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