A Rebuttal to Molson Coors’ Reactionary Letter to Brewers Association

A Rebuttal to Molson Coors’ Reactionary Letter to Brewers Association

by Mark E. Lasbury for Indiana On Tap

Thinking people can look at the same situation and come to different conclusions. Everyone brings their own baggage to the table, and it colors how they see things. That’s why I try not to judge anyone too harshly for their opinions – I don’t know how they got there and I don’t know everything, so there could be a point I’m missing or misinterpreting. As the philosopher Bertrand Russell once said, “The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”

Even with that preface, I was still amazed at the “open letter” that Pete Coors of Molson Coors wrote to the Brewers Association after the Craft Brewers Conference in Nashville last week. In a speech to the crowd, BA Chairman of the Board Eric Wallace said, “The many faux craft, crafty, captive, capitulated and acquired brands are weapons in the arsenal of the big breweries and used to control as much of the market as possible.” He added, “These guys are out to eat our collective lunch and take your kids’ lunch money as well.”

In response to this, Pete Coors, one of the wealthiest people win the world, tried to shame the BA for pointing out the differences between mega-beer and independent craft beer. It was meant to be an open letter, but Mr. Coors only published it on one website, Beer Business Daily, which requires people to pay to see the content. Never mind that he didn’t actually send the letter to BA, the letter has a few problems – from my point of view.

image credit: Craft Brewers Conference

Here is the text of Coors’ letter, taken (as was the Wallace quote above) from a Brewbound article by Chris Furnari, published on May 07, 2018:

A Letter to the BA From Pete Coors
Congratulations on the remarkable attendance at this year’s Craft Brewers Conference in Nashville. The high turnout speaks to the interest and passion that brewers, suppliers, and the general public have for beer and the brewing industry.
As a paying member of the Brewers Association, I enjoy my subscription to The New Brewer. It is the reason I have taken the time to write a point of view concerning the ongoing vitriol expressed in its pages and most recently reaffirmed by BA Chairman Eric Wallace and President Bob Pease toward the large, non-independent brewers.
The brewing industry is not exclusively made up of “large, multinational brewers” or “big brewers” or “faux craft brewers.” It is not exclusively made up of “mass produced” beer, craft brewers or home brewers. Rather, the beer industry is a combination of large and small brewers, retailers, distributors, and suppliers who are passionate about their craft and committed to their businesses. And, they are passionate about competing for the millions of American consumers who love beer.
The leadership of the Brewers Association does a great disservice to the entire beer value chain by attempting to pit one part of the industry against another.
You must know that it is insulting to those of us who don’t meet the clever criteria of your self-proclaimed definition of “craft brewer.” This approach prioritizes insults and division over unity for a beverage that has been used to unify and celebrate together for generations.
Should the highly educated and trained brewers who work for large brewers or the breweries that have been purchased by them be included in the disdain you seem to have for them? Should the quality of beers produced by them, including hundreds of quality medals be insulted by the Brewers Association simply because the parent company isn’t part of your ever-changing “club?” Didn’t all large brewers start as craft brewers? Don’t all craft brewers wish to grow and be prosperous?
We share distributors, many of whom would not be able to distribute Brewers Association beers without the scale provided by the large brewers. You claim that your members are precluded from distribution at retail, while I visit account after account that do not carry any “big brewer” products.
Competition in our industry should be honored and cherished. I agree with you that craft brewers are “exemplars of the American Dream, of entrepreneurial spirit”.
However, you must realize that big brewers are as well. There should be no room for cheap shots and insults (“faux”, “crafty”, “capitulated” beers) for each other.
That is a slippery slope that does not end well for our industry. We have enough competition inside the beer business and outside it with wine, spirits and, increasingly, marijuana.
You undermine your credibility by pitting us against one another to the ultimate detriment of the entire beer industry.
Keep your independent seal, your pride and your zeal for brewing, but let’s be united as an industry. There are other enemies that we all must fight together

 

image credit: First We Feast

There isn’t just one beer industry. It seems to me that Mr. Coors’ letter is an attempt to drive on both sides of the street. Molson Coors wants to be big beer and throw it’s weight around against craft beer, but also to lump itself with craft beer as part of a single industry. Several times in his letter, Coors refers to “the” beer industry, uses “us” to imply that all beer business models are equal, and says he’s part of craft because he personally bought a BA membership and reads the magazine.

Look, there’s a reason people refer to it as BMC (Bud, Miller, Coors); it separates those businesses and drinkers from craft beer. You can argue about Boulevard or Lagunitas, etc. as being or not being craft because they are owned by a family brewer that makes more than 6 million barrels a year, but does anyone really equate Brewery Ommegang with Coors?

Trying to group all of these beer companies together is like lumping McDonalds with that gastropub that everyone is visiting regularly. They both make things that are based on carbon and meant to ingested, but that’s where the similarity ends. It’s true, McDonalds can make a lot of food that is identical and cheap no matter where you purchase it, but the quality and innovation are infinitely higher at the gastropub and the local restaurant is undoubtedly more connected to the community.

By stating that BA does a disservice to all of beer by pitting one part of “the” industry against another fails to acknowledge this basic difference between craft and mega-beer. BA is not pitting craft against craft, they are merely bringing awareness to the words and actions of big beer that work to suppress craft beer. It would be more correct to discuss the disservice that AB-InBev and other mass producers have done to the craft beer industry.

Actions Speak Louder. Indeed, the Brewers Association didn’t create this problem. Coors claims to be part of an inclusive beer industry, but it is actually much closer to AB-InBev than it is 3 Floyds. Like it or not, they are part of BMC, and their actions have proven as much. Was it just a misunderstanding when Minhas Craft Brewery had to sue AB-InBev and Molson Coors for having a secret deal with the Canadian liquor board in which big beer limited American and other small beer sales in Ontario? Seventy percent of beer sales in Ontario are AB-InBev and Molson Coors, and the two monster corporations own 450 beer stores that limit sales of craft beer. I guess trying to suppress craft is just a way of being one of the guys?

Stone is suing Miller Coors over another subtle attempt to co-opt craft beer. image credit: Stone Brewing

Furthermore, if the two different beer industries were really one in the same, why would AB-InBev and Molson Coors need to buy craft breweries? Why don’t they just produce their own truly craft products – they’re all the same, right? There should be no need to purchase craft breweries unless what they are really trying to buy is reputation, brand loyalty, and some sort of entry into the portion of the business that Mr. Coors states that they are already a part of.

Remember, it isn’t just AB-InBev that is buying up craft breweries; Molson Coors purchased Trou du Diable in Quebec last November, and their newish CEO readily states that Molson Coors is in the market to purchase craft breweries.

Perhaps another motivation for the letter is that is can be seen as a response to the huge loss Molson Coors just took in the form of reduced beer sales for first quarter (Money Magazine, May 02, 2018). There has been a large drop in stock prices, so the letter might be an attempt to get in front of their own problem and blame someone else. The stock has fallen 25% since the beginning of the year, for which they first blamed a new ordering system, then blamed the weather. Now it looks like it’s time to blame their losses on the idea that craft beer is being mean to them.

Own Your Choices. I also disagree with several points Coors tries to make in his effort to make Molson Coors look like a brother of craft beer:

– He asked whether people who brew for mega-brewers and breweries that sell out to big beer should bear the brunt of bad feelings. The answer is yes; they made a decision, good or bad, for their company and families. They knew what mega-beer does to craft when they sold, so just own the decision and take what comes with it.

– Coors states that all large brewers started as craft brewers, which is incorrect. Craft beer was a response to mega-beer. BEFORE the consolidations of the 1960s and 70s, yes, brewers might have been more like craft, but after the consolidations, craftsmanship had little or nothing to do with their business model.

Bud Light’s commercial mocking craft beer. image credit: You Tube

– Coors asks, “Don’t all craft brewers wish to grow and be prosperous?” It depends on how you grow. There are some lines that craft people aren’t willing to cross in the name of financial gain. Unfortunately, it’s hard to know who those people are. How do you know if you are resistant to cancer? Only by living a long life without cancer. Likewise, you know brewers are wedded to craft only AFTER they grow organically for many years and still don’t sell out despite success.

– Coors says competition should be honored. Yes, HONEST competition should be honored, but you can’t put yourself in bed with AB-InBev (the divestiture was really about making the deal work, not about a difference in business philosophy) and then want to cry that you’re not like them.

Conclusion. On the whole, the “open” letter seems a bit self-serving and emotional rather than well thought out. But, that’s where Pete Coors is coming from. His view of the world is from the position of a large beer company; the idea that his beer corporation is different from any other just doesn’t enter his mind. To him, all beer is the same. Therefore, he equates himself with craft and harsh words from them would seem like a personal attack.

On the other side of the argument, craft beer fans see great differences between mega-beer and independent (even not-quite-independent) craft beer. The quality is one important issue, and big beer knows this to be true, which is why they buy craft breweries instead of creating them, (they want the good will and the better product), but there’s more. We see that craft and mega are different based on the actions of big beer toward craft.

Molson Coors might try to distance themselves from these actions, but they’re in the same mud pit with AB-InBev and SABMiller when it comes to their actions. And one might even argue that this open letter is just another action that will lead to more ill will. This MIGHT not have been Pete Coors’ intention, but it will probably be the result. At least that’s how it plays out from my perspective.


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