In the Doghouse

In the Doghouse

Big Alcohol Buys Out Craft On Its Way to Monopoly

AB InBev has dead eyes, like a doll's eyes.In late July, international beer giant Sapporo announced it was acquiring Anchor Brewing, a large-but-limited, inconic San Francisco "craft" brewery. The news was met with dismay in craft brewing circles, but it falls well in line with a disturbing trend among megabrewers: buying out small brewers but continuing their labels, with an eye to flooding the shelves with faux-independent breweries. In the short run, this badgers smaller brewers off the shelves. In the long run, this is a recipe for monopoly.

Sapporo's acquisition was just the latest aggressive move by Big Alcohol. In May, Heineken ate Petaluma's Lagunitas. In 2015, Constellation (the parent company of Corona) bought San Diego's Ballast Point. The list goes on.

This is not merely a disappointing development for small brewers. These buyouts form the basis for Big Alcohol's current strategy to own the shelves. As NPR reports, megabrewers use these subsidiary brands in two ways: first, the multitude of captive brands allow them to flood distributors' shelves and local taps; and second, they create confusion among consumers who are trying to avoid these destructive and predatory global brands.

By grabbing for a greater market share, Big Alcohol threatens to further disintegrate an already-threatened "three tier" system. The system mandates that brewers not own distributors, but who cares about the integrity of that distinction if the distributors can't distribute anything but a megabrewer's many brands? In an era of more and more consolidation and its concomitantly growing lobbying power, the United States needs every systemic brake it can get.

Even if consumers wish to be part of that braking system, Big Alcohol has multiple tricks up its sleeve to fool the discerning eye. According to NPR, the "shelf-crowding" has the additional effect of making consumers think that certain beers--such as Goose Island, Sculpin, or Lagunitas--are more "authentic" or "ethical" than mass-market labels, even though the profits land in the coffers or Bud, Corona, or Heineken. Efforts to bend the market and manipulate this perception of "authenticity" do not stop at the tap; AB InBev bought into beer reviewing site RateBeer describes itself as "an active forum for beer lovers to come together and share opinions of beers, and beer retailers in a free environment. ... [T]he premier resource for consumer-driven beer ratings, features on beer culture and industry events, weekly beer-related editorials, and an internationally recognized, annual RateBeer Best competition." The potential to manipulate the market is evident. Imagine if Applebee's bought Yelp.

And while the industry pulls the wool over consumers' and regulators' eyes, Washington D.C. prepares to cut them an enormous check. The Craft Beer Modernization Act (S. 236/H.R. 747) offers billions of dollars of tax breaks over the coming decade to "craft" brewers, wineries, and distillers making up to 6 million barrels per year. For context, the entire craft brew industry grew by 1.4 million barrels last year; 6-million-barrel breweries are themselves Big Alcohol companies. With international monster brands waiting to gobble up these fake-craft labels, then gobble up each other, the only logical endpoint is a single company with a stranglehold on a lucrative, addictive, and dangerous product. If they are allowed to, big fish always eat smaller fish. Whatever friendly, rustic authenticity sub-brands like Lagunitas, Anchor, Sculpin, etc. project, they are not your buddies--they're just chum.

READ MORE on the giveaways written into S. 236/H.R. 747.

READ MORE about Big Alcohol's pulling of government strings.

Rhode Island Legislators Not Just Drunk On Power

Reports of rampant alcohol use in the chamber surface amidst efforts to repeal sales tax on beer.

Duck boats driving right into bays full of beerThe Rhode Island legislature is as likely to engage in libations as deliberations, according to an interview given by freshman representative Moira Walsh to WPRO News. "You cannot operate a motor vehicle when you've had two beers," she said, "but you can make laws that affect people's lives forever when you're half in the bag?"

Despite dismissive comments from House Majority Leader K. Joseph Shekarchi, the reports jibe with patterns among other lawmakers. California briefly had to provide free transportation to its legislators after a rash of DUI arrests. In Washington, D.C., nearly half of all congressional staff drink at social events as part of the job. As one respondent put it, "Parties are work." Only two states—Idaho and Oklahoma—forbid lawmakers to drink on the job.

This culture of wetting beaks and signing bills may help explain why Rhode Island is considering repealing its beer tax, citing business lost to neighboring Massachusetts. Massachusetts has no beer sales tax, making Representative Blake Filippi have nightmares of people running to the border to stock up on cases. But it seems Rep. Filippi is not having the right nightmares—according to SAMHSA, Rhode Island has the fourth highest rate of underage binge drinking in the country, far in excess of the national rate (though much-envied Massachusetts isn't far behind). Meanwhile, 92.6% of Rhode Islanders in need of alcohol abuse treatment never receive it.

Research has shown time and time again that a very simple and straightforward way to both reduce consumption and fund treatment is to levy greater alcohol taxes. "Beating Massachusetts," on the other hand, has little demonstrable effect on public health. The need to raise, not lower, alcohol taxes should be evident to Rep. Filippi and his colleagues. We here at Alcohol Justice cannot imagine what could be clouding their judgment.

READ MORE about the power of smart alcohol tax policy.

Kid-Centered Snapchat Douses Memories With Rum

Bacardi brings rum to children what funThe cellphone app/social networking service Snapchat is known for two things: (1) a revolution in facial detection software that allows users to creatively tweak photos to turn friends into puppies, royalty, or astronauts to creatively tweak user photos, and (2) an almost miraculous ability to acquire and keep a teenage audience. Bacardi, on the other hand, is known for one thing: rum. Being neither a software developer nor a product that can legally be consumed by teenagers, Bacardi should have no business partnering with Snapchat.

But that’s exactly what they did, introducing a promotion with electronic music group Major Lazer that allowed Snapchat users to, as according to Adweek, “appear with flashing lights and Bacardi bottles around their head or put parts of their face into an orange vortex.” There is no question to whom this promotion is aimed. Snapchat is often considered the premier social network for adolescents. Fully 23%--almost a quarter—of their users are under 18, and another 37% are 18-24, according to research compiled at Statista. By launching this sponsorship, Bacardi knew they would bypass the already ineffective voluntary measures meant to limit alcohol marketing to underage audiences.

Bacardi is not alone in this knowledge. Texas A&M researchers found that the social media accounts of underage users receive hundreds of advertisements for alcoholic beverages. “Age gates” requiring voluntary admission of date-of-birth are comically and transparently ineffective; even when companies employ them properly, the very idea of age-restricted content becoming available incentivizes teens to put in false dates of birth. Among the ineffective handshake agreements used by the industry, ads are only supposed to be placed on platforms on which over 71.6% of the audience is above legal drinking age. It seems arguable that Snapchat has hit this threshold, which hasn’t scared off AB InBev (Bud), Pernod Ricard (Jameson), Constellation (Modelo and Svedka), and now Bacardi from launching campaigns.

Two things make Bacardi’s blitz even more pernicious. First, the Major Lazer partnership means that simply being a music fan may turn underage Snapchat users into amplifiers for liquor marketing. (Come for the music, stay for the message that you can’t enjoy the music without getting wrecked.) Second, the filter was only available directly on Snapchat for a limited time, after which users had to get the QR code from Facebook—meaning Bacardi would be able to scrape a second, information-rich site for data on visitors.

Voluntary marketing restrictions have long proven a joke in limiting predatory marketing tactics. But Bacardi, in its cross-marketing, cross-platform efforts that blatantly disregard the demographic being exposed to its product, has upped the ante in exploitation and predation. It is long, long past time for Big Alcohol to be reigned in, because they are constantly seeking new customers, and they know perfectly well where to find them.

READ MORE about how social media helps Big Alcohol network with kids.

READ MORE about the joke that is industry self-regulation.