Anheuser-Busch Pledges Financial Support for Wholesalers
As the Bud Light brand continues to lose sales and share amid conservative-led backlash over a one-off social media influencer partnership with a transgender woman, the company is now pledging financial support for its wholesaler partners, according to a 6K filing with the Securities and Exchange Commission.
Anheuser-Busch CEO Brendan Whitworth in a letter to the brewers and wholesalers on Thursday promised “financial assistance to our independent wholesalers to help them support their employees.” That assistance, according to the filing, includes:
- “Financial Support: Anheuser-Busch will assess prior performance impact on an individual wholesaler basis and, in accordance with legal and regulatory requirements, plans to provide a sales incentive payment to wholesalers for beer sold through the end of 2023;
- “Extended Credit: In accordance with legal and regulatory requirements, Anheuser-Busch will extend additional credit to wholesalers through the end of 2023
- “Freight/Fuel Surcharge Reimbursement: Anheuser-Busch will reimburse wholesalers for the freight/fuel surcharge through the end of 2023;
- “Incremental Local Market Investment: Anheuser-Busch will increase investments behind its brands in local markets.”
In addition to support for A-B’s wholesaler partners, Whitworth said the company would invest “to protect the jobs of our frontline employees.”
To A-B’s customers, he wrote, “we hear you.”
“Our summer advertising launches next week and you can look forward to Bud Light reinforcing what you’ve always loved about our brand – that it’s easy to drink and easy to enjoy,” he wrote, echoing the Bud Light brand’s tagline. “As we move forward, we will focus on what we do best – brewing great beer and earning our place in moments that matter.”
Michigan Brewers, Wholesalers Clash Over NA Beer
Michigan craft brewers and wholesalers are at odds over craft brewery owners’ desire to offer non-alcoholic (NA) beer in their taprooms, Crain’s Grand Rapids Business reported.
Due to the high cost of producing NA beers and the low odds of recouping a return on investment in purchasing the equipment necessary to make the products, craft brewery owners would like to offer existing offerings from other producers in their own-premise outlets.
However, the Michigan Beer and Wine Wholesalers Association is taking a hardline stance in opposition, citing state law that defines beer by its fermentation process, not its ABV, which is inconsistent with the way the state defines wine and spirits.
As such, NA beer falls under the state definition of beer, and Michigan breweries are only permitted to serve beer they manufacture. The Michigan Brewers Guild is seeking legislative reform, but they’re meeting opposition for wholesalers.
“If you don’t produce it, we don’t support you selling it in your tasting room,” Spencer Nevins, president of the Michigan Beer and Wine Wholesalers Association, told Crain’s. “We believe that the law is currently adequate and correct in the way it views this.”
However, Max Trierweiler, co-owner of Mitten Brewing in Grand Rapids, told Crain’s that his company looked into production equipment for NA beer and found the investment is large.
“We’re talking a half-million-dollar investment for a product that’s going to be less than 1% of our sales,” he told the outlet. “It’s not ever going to make sense for us to make that investment for ourselves.”
Twin Oast Brewing Acquires Catawba Island Brewing
Twin Oast Brewing has acquired Catawba Island Brewing, a fellow Port Clinton, Ohio-based craft brewery, The Brewer Magazine reported.
Twin Oast plans to use Catawba Island’s brewery for production and distribution only, but will keep the Catawba Island brand alive by continuing to brew its popular Hot Blonde ale. The acquisition will also help Catawba expedite brewing sour beers, with its first barrel-aged sours expected to be released in 2024.
The acquisition comes several months after Catawba Island filed for chapter 7 bankruptcy, with nearly $2 million in liabilities and $585,000 in assets, the Sandusky Register reported. The filing came less than a year after the brewery expanded its Port Clinton facility, adding 1,200 sq. ft. of brewing space and 800 sq. ft. of cold storage.
Mississippi Bill Blocks Blue Cloud and Similar Distributors
Mississippi Gov. Tate Reeves signed a bill into law in late April that would prevent Blue Cloud Distribution from operating in the state. The legislation (H.B. 1140) bars “manufacturers of light wines, light spirit products or beer … from acting as wholesalers or distributors.”
The key line in the bill to amend Mississippi’s alcoholic beverage regulations reads: “An entity that is the manufacturer of a product or substance that is infused into or becomes part of any beer, light wine or light spirit products regardless of whether the entity manufactures the final product. This provision also shall apply to all affiliated companies, wholly-owned subsidiaries or joint ventures.”
Beer Business Daily reported on the law change this morning. The trade publication previously reported that the Michigan Beer and Wine Wholesalers Associations is opposing Blue Cloud’s application for a distributor license and suggests that if the application is approved, Blue Cloud suppliers Boston Beer Company and FIFCO USA should lose their licenses to sell alcoholic beverages in the state due to their interests in the nascent distribution business.