IBS releases statement on distribution

Modern Brewery Age, August 23, 1999

The Institute for Brewing Studies, an arm of the Association of Brewers of Boulder, CO, has released a brief statement on the distribution of beer. The group stated: "The Institute for Brewing Studies supports access to distribution for all brewers unimpeded by any supplier or distributor."

The statement was issued after members of the IBS, speaking through the board of advisors, expressed a need for the Institute to issue a public statement in favor of fair access to the beer market.

"We are simply trying the bring more attention to the ever-increasing challenge faced by small brewers and microbrewers, the decline in distribution choices," said David Edgar, director of the IBS. "Regardless whether it's a major brewer, importer, craft brewer, or distributor, IBS feels that no company should be able to control any brewer's right to adequate distribution. The Institute for Brewing Studies will continue to push for an open distribution system in order to promote distribution of independent brands."

Edgar noted that many brewers have encountered difficulties when another brewer or importer influences a wholesaler's decision to carry--or not carry- their brand of beer. The IBS statement went on to say:

"Some brewers also face a difficult scenario when a wholesaler who owns the rights to a given brand in a particular state decides to "sit" on the brand, giving it little, if any, attention, while refusing to sell the brand rights to another wholesaler. This action eliminates any chance the beer may have to succeed in that state and prevents other wholesalers from building the brands' business. The net result is that state franchise laws originally intended to protect small wholesalers from large breweries are now harming small breweries as they allow large wholesalers to the privilege of establishing an oligopoly or near-monopoly type of environment. Given these problems, many craft brewers are exploring other distribution channels. While many brewers have enjoyed success with distributors of wine and spirits, some feel these non-beer distributors don't fully appreciate the proper care and handling of beer like a beer wholesaler does. And while many new wholesalers specializing in craft beers are appearing t hroughout the country they can be either too small or too few in number to be effective for many microbreweries. The future may offer new distribution opportunities--new regional or national craft beer distribution networks that enter the market"

Edgar stated, however, that "until these possibilities become realities, we must find a way to work with, and achieve sufficient access to, the existing beer distribution system."