Posted on 07/28/2008 12:40:53 PM PDT by NormsRevenge
California's smallest beer makers, including Stockton's Valley Brew, have become engaged in a political fight against industry giant Anheuser-Busch Co.
The battle is being waged over souvenirs - specifically, the amount of money California law allows beer companies to spend on the trinkets they give away at bars and festivals. Anheuser-Busch is backing Assembly Bill 1245, authored by Rep. Alberto Torrico, D-Fremont, which would allow beer companies to spend as much as $5 each on the promotional items they give away.
The current law puts a 25-cent cap on the items, known in the industry as swag.
A statewide coalition of microbrewers says the bill will allow Anheuser-Busch - which owns Budweiser, Bud Light, and Michelob - to buy back a percentage of the marketplace it has lost in recent years to craft-beer makers. The coalition is urging Gov. Arnold Schwarzenegger to veto the bill, calling it an attempt by the beer giant to "provide ... a competitive advantage over other beer manufacturers in the marketplace."
"We don't think California should give big companies the ability to grab even more of the market share, (when) they have most of the market anyway," said Kellie Jacobs, president of Stockton's Valley Brew, saying most microbreweries can't afford to give away 25-cent items, let alone $5 swag.
Anheuser-Busch spokesman Andrew Baldonado said the beer giant is backing the bill in order to create "a level playing field with spirit (liquor) manufacturers," not to annoy the sales ability of craft-beer makers. Liquor manufacturers are allowed to give away items up to $5, he said.
"The idea that this would cut off access to the marketplace for craft beer is not reality," Baldonado said. "You can walk into a lot of bars and see Sierra Nevada tap handles. Retailers are not going to be swayed because we are offering T-shirts or hats."
He added that beer drinkers would likely not be persuaded to choose Bud Light over a microbrew for trinkets, either.
Jacobs agrees. She said it's not beer drinkers who will be targeted with the novelty items. She claims Budweiser will ultimately use the swag to help gain more prominent displays and advertising in bars, grocery shelves and liquor stores. Product placement is a big part of marketing, and those beers in the prominent spots are more likely to get additional sales.
"It's not the consumer, it's the business owners that will be getting things," she said, using the examples of golf balls, T-shirts, hats and even patio umbrellas that a large company can afford to buy in bulk at $5 or less per item.
"Compare what I can buy in volume to what Anheuser-Busch can buy in volume. There's no contest. I buy patio umbrellas for $95 each. Bud can buy them in bulk for $5 each," Jacobs said.
Another worry for small companies is Anheuser-Busch's ownership of some craft beers, such as Red Hook Ale and Widmer Hefeweizen. The ability to spend money to market those beer brands fans the competitive flame further.
"People think those are microbrews," Lodi Beer Co. manager Sam Rehmke said. "But they're owned by the biggest beer manufacturer in the world. It's the fact that it's the big guys that have everybody worried."
Baldonado said that the bill, in reaction to opposition, has already been changed. He said the bill calls for a staggered increase in the giveaway spending cap from 25 cents to $5 over a three-year period instead of all at once.
Its the micro brewers versus the Belgian owned, Brazilian run Anheuser Busch.
What business is it of State government to dictate how much free stuff a corporation can give away? Sheesh.
Much ado about nothing.
Those of us (yes I am one) beer snobs who drink microbrews are NOT gonna start drinking bud for the swag they give away.
I’ll put vodka in a diet coke before drinking a Bud.
Precisely!
Better yet, make a better beer, and true beer drinkers will find you. So will their money!
WTF would I want a Bud keychain for anyway ?
I'd rather have free swigs.
There's a law preventing companies from giving away free stuff? How stupid.
Even if AB gave away very expensive swag, those who drink the good beer and ales would NEVER be swayed to switch to AB's lineup of malt beverages.
I know I wouldn't. I might be forced to buy one....but I'd very quickly find a plastic plant to water it with. That's all it's good for.
Case in point:
When I was at a pub in Ireland, Murphy's hired a VERY good looking and personable young lady to hand out vouchers for a free glass of their stout in an effort to sway Guinness drinkers. I had m'free Murphy's and ordered up a Guinness to chase wash it down with.
Hammer, meet nail.
Bud's commercials usually are pretty good, but their beer... Not so much.
Micro breweries are bastions of small enterprise and free markets. The Micros are much more sensitive to their customer’s tastes and they just make a better product than the big guys.
I want to know why the government has any business deciding how much any business can’t spend on anything? Where is the constitution does it give them the right to do this? Leave industry alone and get the government out of our face, until we do we will be slaves to the government!
WTF would I want a Bud keychain for anyway ?
____
If it has a bottle opener it at least has some utility?
If I lose my Falstaff opener, then yeah, I’ll need a replacement.
i take the fob with their advertising off it and keep the free ring. tshirts make great shop rags. the beads.. again take off the logo part and keep the beads. my kids love ‘em. bottle openers are good, just scratch the painted logo off.
even those stupid blinking lights are good to pull the batteries out of.
Exactly. Sure I’ll take a $5 bottle/can/zipper opener for free, but I’m still not going to drink their swill.
Dear Cali,
I know we’ve been in this pretty intense citizen-state relationship for more than three decades, but I feel like we’re growing apart. Honey, it’s the alcohol.
First you made it illegal to give away free booze. I know you were conscerned about people, bless your little (fascist) heart. You were saying that free beers would encourage underage drinking and that having to pay for your drinks would slow down raging drunks. I know you meant well.
I went along with that, but maybe I should have spoken up then. I was young and naive. I didn’t make it an issue when you said nobody could take booze out of a store unless it was in an opaque bag, either. You said it was because you didn’t want the children to think that it was okay to drink. You worried that they would become alcoholics if they saw someone with a sixer of barleypop. You’re always thinking of the children, you cute little nanny-state.
Now I find out that you’re keeping beer companies from spending money on advertisements. I really think that you’ve gone too far.
Honey, you know I love you. You know how wild those Sierra Nevadas drive me, and I don’t want to get started about that little beach down by San Simeon. I think you need help. Real, professional help. I don’t want to have to leave you, but you’re pushing me away.
Your dearest Citizen,
KingTurnip
Me either. Now, I might buy a case of Bud if they'd give me one of the Clydesdales that pissed it out.
These rules are generally part of the California Alcoholic Beverage Control rules, and though many on FR think this is restrictive, they should check into their own state’s liquor laws lest they assume CA is the most oppressive.
CA is a state selling beer, liquor, wine all at grocery stores, not “package stores,” and not “special stores.” We sell it on Sundays. There’s plenty of advertising and trinkets to go around. Bars are still getting free coasters (there’s a cap on that though last I read ABC rules). We don’t have any problematic ABV restrictions on beers/malt beverages, etc. CA is a great state for microbrewing in part because the legal climate here is so good relative to other states.
Many of these CA laws were built-in to bust up distribution monopolies and graft in the industry. In this case, CA legislated against a brewery giving away free beer to customers and also tossing out tshirts or other big incentives to customers to sell their brand. It can be viewed as a barrier to entry to a small brewer because the clueless owner of Joe’s Bar will put new-macrobrew on tap to get the tshirt night instead of choosing a beer that is unique or different. Just another lager in a bar w/10 lagers + Guinness.
I’m not convinced these rules really work effectively, and my favoring of the free market makes me skeptical of these laws. Because there are still people working around these laws because enforcement is so lax. And the ABV rules can be pretty complex to understand on the giveaway front. For example — those neon lights that look cool? We’ll unless the bar owner paid for them, they are still actually the property of the distrubutor, and they must keep paperwork around to that effect. Same with tap handles, etc.
Restaurants are still getting free tap line installation and equipment, getting free beer, etc. The big distributors and brewers can handle this and even survive a fine if levied. Small brewers can’t afford the risk, and many small brewers still have ethical rules in-house that prevent them from circumventing the law to win business.
Just some thoughts from someone who was briefly in the industry a few years back...
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