Craft Beer Business is Booming, Why Make Changes?
Business is booming for Massachusetts craft brewers under the current state laws.
Crafts brews now comprise nearly 15.5 percent of total beer sales volume in the Commonwealth, more than double the national average, according to craftbrewingbusiness.com. Data reveals that total beer sales in Massachusetts grew by 2.2 percent, from almost 91,000 barrels in 2012, to just under 4.17-million barrels in 2013. Nearly 82 percent of the total growth was concentrated in the craft category.
The sales numbers in Massachusetts remain high across the board. A smaller company, Cape Cod Beer reported product demand is rising, while giant billion dollar corporation, Boston Beer Company saw 2013 shipments increase 25 percent, according to Beer Business Daily.
The State of Massachusetts has some of the most successful craft brewers in the country. Boston Beer Co. (Jamaica Plain) and Harpoon Brewery (Boston) each cracked the top 10 list of top selling craft beers in 2012 and 2013.
Despite their growing success, the two large brewers want to change the state’s distribution laws.
Both companies are in favor of the proposed legislation, H. 267, which aims to allow small brewers, who produce up to 6 million barrels a year, to terminate contracts with distributors without any prior notice.
If passed, this legislation would hurt small craft brewers who are not able to utilize the strategic marketing expertise of the distributor to get their beer on the shelf. In addition, distributors will lose the incentive to bring on new craft brands and that will cost existing jobs. As a result, consumers will have a smaller selection of innovative craft beer brands.
The only companies that win from the changes are the Boston Beer Co. and Harpoon. The reality is that if passed as written it would keep new competition from entering their marketplace, and give consumers fewer choices.
The bill is trying to solve problems that don’t exist. Cutting contracts with distributors would interfere with a system that has helped small crafters flourish. The distributors play a vital part in the sales and marketing process for craft brewers. They provide the merchandising, advertising, promotions and warehouse and equipment for these companies who otherwise would not be able to manage it. They want to see small craft breweries succeed.
The current process strikes a balanced partnership between brewer and distributor that inures to their mutual success and fosters quality choices being made available to the Massachusetts consumer. We shouldn’t let unnecessary legislation prevent the craft brewery industry from thriving.