The Fallacy in the ABI Buy-Out Argument
Let me start this by saying that every business owner needs an exit strategy. Most businesses will find themselves needing a cash injection from an investor and it can make great sense to partner with a strategic investor that is a larger player in your industry. It can give your business a great competitive advantage and that is just smart business.
Now onto the real reason for this blog. The founders of 10 barrel, Golden Road and Breckenridge brewing were all recently featured in Westword defending their decision to sell to ABI. (http://www.westword.com/restaurants/ab-inbevs-craft-brewery-team-fighting-back-against-charges-they-sold-out-8233345 )The crux of their argument is that it was a strategic business decision. ABI will provide better for their employees and allow them a greater budget for labs and experimentation. That all may be true, and frankly it doesn’t matter, it is not the point of dispute in this particular blog.
The article goes on to say that they are angry at guilds for voting to revoke their membership and that craft brewers “took their ball and went home” and that “you can’t convince someone their emotions are wrong”.
Here is the point of contention. Why is it that selling to ABI is a justified business decision, but protecting our independent businesses from the predatory practices of ABI is the equivalent of an emotional 5-year old running home with his ball? We too are smart savvy business founders and operators who have made a strategic business decision as well. Guilds are not clubs with a secret handshake and party going on behind closed doors. These newly acquired ABI business were not asked to leave because they weren’t “cool” anymore and it was certainly not done to gain publicity.
A brewers guild is a trade organization with a specific goal of protecting the businesses of independent brewers. It is a place where legislative and marketing strategy is discussed, formulated and executed for the protection and advancement of these businesses. Why then, would a group of smart business owners permit the membership of a wholly owned subsidiary of ABI, a company with a clear objective to subvert independent craft business in the marketplace?
You don’t have to look very hard to see that ABI is spending a lot of marketing dollars to diminish the image of craft. What’s more, behind the scenes ABI is using unfair trade practices to incentivize distributors to drop independent craft brands from their portfolios.
It is possible to purchase a craft brand without being a dick about it. Miller Coors has acquired several craft breweries but you don’t see them bashing craft beer or trying to get them kicked out of distribution portfolios.
Asking an ABI owned brewery to leave a guild is a business decision plain and simple. I would gladly sit down and drink a beer with anyone from Breckenridge and maintain a friendship with them. I respect the people and the beer. All of these companies knew the definition of independent and craft set out by the Brewers Association prior to their acquisition by ABI. You can’t agree to one set of rules and then complain about them later when they no longer suit your needs. If ABI was the right decision for them, then it was the right decision. We all have business to run and decisions to make and as founders we have to live with the impacts of those decisions.
The views expressed in this blog are as the founder of Renegade Brewing Company and are not meant in any way to represent the collective views of Craft Beer Colorado, of which the founder of Renegade is a founding member.