This afternoon, I ran across this YouTube posting from the Mackinac Center for Public Policy, a Michigan-based think tank with a decidedly free-market, somewhat Libertarian bent. Using New Holland Brewing Co. President Brett VanderKamp as its main source, it attempts to make a case against the so-called “Three-Tier System” of alcohol distribution, particularly as it is exercised in the state of Michigan.
As a Virginia retailer and a proud seller of New Holland’s products from Michigan, I’m not sure this explains the problems of the three-tier system very adequately, nor does it address how individual breweries would distribute their products if they were free of the three-tier system. OK, we get the problem of the brewery that wants to sell its products to the store across the street but has to feed them through a system that requires the beer to travel 100 miles to make the across-the-street trip. But that’s apocryphal. Or at least the exception.
For every store “across the street” from the brewery, there are literally hundreds that aren’t. Yes, “literally.” I don’t mean “figuratively” here. How would New Holland propose getting its beers to stores that aren’t across the street? How would they get to Grand Rapids or Detroit or Cleveland or Philadelphia or my store in Alexandria, Va.? Would New Holland and every other brewery each take orders from the hundreds of stores across the country that want their products? Would they employ their own fleet of trucks to deliver directly to each store?
Great. That means that instead of having to place and receive an already-unwieldy 7-10 orders and deliveries a week, I’d be looking at dozens, if not scores, of orders and deliveries from each individual brewery that I carry. Would cost be any cheaper? Would breweries be any more profitable? Would retailers make more money? Would the consumer pay less or get more variety? My guess is that if the three-tier system was smashed, it would quickly re-form like the amorphous blob it is. Like-minded breweries would for distribution systems, or they would hire new (or old) distributors whose expertise is … distribution.
I’m no great fan of the current three-tier system and the 51-or-so different iterations of it that exist in the U.S. I’m open to hearing alternatives. But just trashing the system without offering alternatives isn’t helpful. It makes as much sense as suggesting that taxes are too high and if we just cut them everything would be great. Pay no attention to that elephant in the corner telling us that fewer taxes means less funding, which means fewer government programs and necessary cuts. It’s just dishonest.
Perhaps the big argument with the three-tier system (at least as I understand it) is that most states require breweries to shackle themselves to one distributor in a given jurisdiction, then giving the distributors total control over distribution of that brewery’s products with little or no recourse for the brewery if the distributor doesn’t hold up its end of the bargain. Witness what Larry Bell and the Kalamazoo Brewing Co./Bell’s Brewery went through a few years ago when they had a disagreement with their Chicagoland distributor. His solution was unique, to say the least. But while it’s probably not feasible for every wronged brewery to do what Bell did, it points out the flaws that need to be fixed.
Non-alcoholic food stuffs can have multiple distributors in a given area. Different distributors give different levels of service, different pricing structures and other issues that give both suppliers and retailers options. Suppliers can (I assume) move from distributor to distributor more freely than can breweries under current rules. Retailer can choose which distributors give them the best deals for their circumstances. Understandably, distributors would want more stable relationships than to allow breweries to break allegiances on a whim, but that could be handled contractually rather than allowing local law to give distributors an iron-clad upper hand.
The endgame, I would hope, is to provide breweries, retailers and, ultimately, consumers, more choices as better prices, while still having robust avenues of distribution. The three-tier system doesn’t need to be eradicated, but it needs to be made fairer for everyone involved.









The Appeal of Fat Tire
Posted: August 22, 2011 in Commentary, Stuff about beerTags: Bell's, Fat Tire, Flat Tire, founders, New Belgium, North Peak, Oberon
Today’s the day that New Belgium Brewing Co. releases its Fat Tire Amber and six other beers in the VA/DC/MD market. To say that this has been one of the most-hyped beer introductions in recent memory would be a disservice to the efforts put forth by New Belgium and their distribution partners. “Hype” only scratches the surface.
Despite a few bumps along the way (I particularly enjoyed placards distributed throughout Northern Virginia imploring aficionados to visit www.newbelbium.com), the release of Fat Tire and friends has been a wonder to behold. And yet …
Whither the NBBC products themselves? I count myself among the puzzled few who just don’t “get” the flagship Fat Tire brew. For years, I’ve had people ask me where they can get this golden elixir that they first had while living out West or skiing at Vail or had smuggled in by a friend. (This reminds me of stories I heard from my dad about Coors Banquet Beer back in the early 1970s.) When, oh when, would this precious brew find it’s way East?
When I’ve found it available during my travels, I would partake of a pint of Fat Tire just to see if its appeal would finally reveal itself to me. But, if anything, I’ve found this slightly too-sweet, somewhat too-lagery-tasting brew to be less interesting with each subsequent tasting. Yet people continue to tell me that Fat (or as many would say, “Flat”) Tire is the Best. Beer. Ever.
Well, OK, if you think so, then I guess it is for you. Ever the Beermudgeon, I still try not to be a Beer Snob or a Beer Nerd. I’m fascinated to try to understand why many feel Fat Tire is the Holy Grail. Perhaps these are the people who are weaning from Miller Lite, Bud Light Lime and Yeungling. If so, it’s a step forward, I’ll grant you that. But I wouldn’t even place it among the best US craft ambers, such as North Coast Red Seal, New Holland Sundog and Breckenridge Avalanche, to name a few.
Despite all this, there are many NBBC brews I have enjoyed, including their ambitious La Folie sour ale. When trying a sample of their first batch (I believe)at a Smithsonian Associates tasting at DC’s RFD in 2002, I told New Belgium’s husband/wife brewing team that it would be a great component of a unique vinaigrette dressing to rather cold stares. I meant it as a compliment, though I doubt it was received as such.
Anyway, here we are nearly a decade later. Fat Tire and friends have arrived in the DC area, while I am sitting on the beach of an inland Michigan lake sipping a Bell’s Oberon, to be followed by a Founders Centennial IPA, a Two Hearted Ale or a North Peak Diabolical IPA.
Am I missing anything?