BrewDog Labels Surrendered Amid Allegations of Falsified Info Sent to TTB
Days after the BBC reported that Scottish beer maker BrewDog allegedly submitted false information to the U.S. Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB), keg labels for the two beers in question were surrendered, according to industry blog MyBeerBuzz.
The keg labels for Elvis Juice and Jet Black Heart were surrendered on January 19, according to MyBeerBuzz. These beers “have not been imported to the U.S. for many years likely going back to 2017 or 2018,” BrewDog USA told Brewbound.
BrewDog USA told Brewbound that its importer would have surrendered the labels, a step taken through the TTB to indicate that the labels involved would no longer be used.
In the images posted to MyBeerBuzz, the importer listed is Manhasset, New York-based MHW Ltd. Multiple requests for comment to MHW have not been answered, but the imported provided the following statement to the BBC:
“Our focus is to comply with all federal and state laws and we rely on all our suppliers for whom we import to provide truthful and accurate information as to all the ingredients in their products so we can determine the required federal compliance processes to be executed. Regarding the two products in question, we executed the federal compliance based on the information provided by the supplier at the time, which we believed to be truthful and accurate.”
The applications were submitted in 2016 and 2017, when BrewDog’s U.S. operations were delayed coming online and the brewer had to import beer from its Ellon, Scotland-based facility. BrewDog said it self-reported the issue to the TTB “as soon as we became aware,” but declined to specify the exact date when the self-reporting occurred.
BrewDog USA pointed to comments from former TTB senior counsel Tom Niekamp that “the facts at-hand would not risk an importer’s license.”
BBC reported the news ahead of its upcoming expose “Disclosure: The Truth About BrewDog,” which is set to air on January 24 on BBC One Scotland. In its reporting, BrewDog employees told the BBC that they were “under pressure in 2016 and 2017 to ship beer with ingredients that had not been legally approved.” As a result, applications to import BrewDog’s Elvis Juice and Jet Black Heart offerings excluded some ingredients that could have potentially delayed the TTB’s approval.
BrewDog co-founder and CEO James Watt admitted the missteps in a LinkedIn post and the company “did not realise we needed to get things like the Elvis Juice recipe and ingredients approved in advance.”
In a post on BrewDog’s forum for its Equity for Punks crowdfunding investors, Watt allegedly attempted to warn BBC sources that their anonymity “can never be guaranteed,” according to a report in the Guardian.
Watt added that the company knows “false information has been given to the BBC, which if broadcast would be highly defamatory.”
The allegations of a high-pressure workplace that led to falsified information provided to the TTB follow a campaign started last summer by Punks With Purpose, a group of former BrewDog employees who say the company espoused “a “culture of fear” and “toxic attitudes towards junior staff.”
Report: Constellation Portfolio to Move from Markstein Sales, Bueno Beverage in California
Subscription-based industry newsletter Beer Marketer’s Insights reported this week that Constellation Brands is again forcing the sale of its portfolio of brands from two California Anheuser-Busch wholesalers — Markstein Sales Co. in Antioch and Bueno Beverage Company in Visalia. Insights reported that the Constellation portfolio would likely go to the Reyes Beer Division, while Valley Wide Distributing would receive the portfolio from Bueno. However, those moves have not been finalized.
A Constellation spokesperson offered the following statement to Brewbound: “The beer industry continues to experience both consolidation and an influx of new capital disrupting the distributor marketplace. As industry dynamics, service models, and route-to-market capabilities evolve, we must make decisions that are in the best long-term interests of our ability to be most competitive and efficient as we work to meet the needs of retailers and consumers. We are thankful for Bueno and Markstein’s partnership over the years as we’ve worked together to build our brand portfolio.”
Since 2018, Constellation Brands has worked to move its portfolio from A-B houses primarily to the Reyes Beer Division in California. Reyes, which has been a beneficiary of those moves and made its own acquisitions in California, has drawn scrutiny from trade groups the California Family Beer Distributors (CFBD) and Brewers Association president and CEO Bob Pease in letters to the U.S. Department of the Treasury last year as part of President Joe Biden’s executive order on competition.
In his own letter to the Treasury, Reyes Beer Division CEO Tom Day pushed back on the notion that competition in California’s beer market has suffered due to his company’s expansion efforts.
“These complaints, however, are largely voiced on behalf of distributors who were unsuccessful in meeting the needs of brewers and in turn retailers,” Day wrote. “The movement of distribution rights by brewers is a reflection of inefficient or ineffective distributors and is evidence that competition is working, not the opposite.”
Lion Explores Sale of UK Beer Brands Magic Rock and Fourpure
Lion Little World Beverages, the parent company of New Belgium and Bell’s Brewery, is considering a sale of its United Kingdom-based craft brewery brands Magic Rock and Fourpure.
In a press release Wednesday, Lion Little World Beverages U.K. managing director Gordon Treanor noted that the company has continued to invest in Magic Rock and Fourpure “despite difficult trading conditions over the past two years.”
“We believe that the business is well placed to benefit, particularly as trading conditions improve,” Treanor continued. “At the same time, Lion has made very significant craft beer investments in both Australia and the United States, to the extent that our U.S. business is now a leading U.S. craft brewer. Like any business, we need to make choices as to where we continue to direct our investment.
“While no decisions have been made, we need to determine how to best set Magic Rock and Fourpure up for success in the coming years,” he continued. “Our team have been informed of the review and we are committed to supporting them through this time.”
Lion, which is based in Australia and owned by Japanese beer maker Kirin, closed on its purchase of Bell’s Brewery in December, making it a top brewery group in the U.S. with more than 1.5 million barrels between the Michigan brewery and New Belgium.
Number of Convenience Stores Declines in 2021
The number of convenience stores operating in the U.S. stood at 148,026 in 2021, a 1.5% decline compared to the 150,274 stores in operation in 2020, according to trade group the National Association of Convenience Stores (NACS) and NielsenIQ’s “Convenience Industry Store Count.” This marked the fourth consecutive year of decline in the number of c-stores, and yet the number of stores in operation were nearly equal to a decade ago (148,126 stores in 2012).
NACS said the decline was largely due to a -3.1% decline in single-store operators, which make up 60.4% of all c-stores (89,336 stores). The number of single-store operators has steadily declined from a record 63.2% of c-stores in 2017.
The decline in the number of c-stores follows declines in other brick-and-mortar retailers, as grocery (-2.9%, to 45,687 stores) and drug (-1.5%, to 41,000 stores) both declined. The only channel to increase in the number of brick-and-mortar stores was dollar stores, increasing 3.8%, to 35,501 stores, up from 34,215 in 2021.
Gas station/kiosks, which sell fuel but not enough in-store products to be considered c-stores, declined 5.2%, to 14,826 kiosks in 2021. Over the last six years, kiosks have declined nearly 33%.
NACS noted that there is one c-store per every 2,245 people in the U.S., which has a population of 332.4 million, according to the U.S. Census Bureau.
Texas boasts the most c-stores in the U.S., with 15,742 stores, followed by California (12,053 stores), Florida (9,400), New York (7,848), Georgia (6,448), North Carolina (5,690), Ohio (5,537), Michigan (4,819), Pennsylvania (4,629) and Illinois (4,623). Texas was the only state in the top 10 to add stores.
Convenience stores accounted for more than half of the beer category’s $44.3 billion in off-premise sales in 2021, according to market research firm IRI. Off-premise beer category sales at c-stores increased +2%, to $24.2 billion, last year as consumer mobility and traffic bounced back following pandemic-related closures.
BW166: TTB Beer Label Approvals Increased 8.8% in 2021
Beverage-alcohol consulting firm BW166 reported that the Alcohol and Tobacco Tax and Trade Bureau (TTB) approved 43,300 beer labels in 2021, an 8.8% increase compared to the previous 12-month period. The firm added that beer label approvals from October through December increased 9.3% year-over-year, with 10,500 approvals.
Meanwhile, the TTB approved 21,900 spirits products (+17.1% compared to 2020) and 113,900 wine products (+7.6% compared to 2020) in 2021. However, approvals for spirits and wine declined -1.6% and -7% respectively over the last three months of 2021.
BW166 also offered a look at approvals by origin, with domestic product approvals increasing 5.8% (97,2000 products) and imports increasing 12.9% (81,900 products) in 2021.
Stone Brewing Takes Buenavida Hard Seltzer Nationwide
Stone Brewing has begun accepting orders from its nationwide network of wholesalers for its Buenavida Hard Seltzer.
Buenavida launched last July in Southern California exclusively in glass bottles at off-premise retailers. The company said its forecasted five-week inventory sold out in one week.
Buenavida Hard Seltzer (5% ABV, 100 calories, made with cane sugar) will hit the expansion markets in variety 12-pack bottles of four flavors: Mango, Black Cherry, Mandarin, and Watermelon and Lime.
Adam Bankovich, Stone’s VP of national sales, called Buenavida “an important step in our growth of the Buena brand family.”
“Buenaveza Salt & Lime Lager is our No. 3 overall brand and our No. 1 selling beer on draft right now,” he added. “We’re committed to growing this brand family with other non-IPAs, like Buenavida Hard Seltzer, which allow us to reach fans we likely haven’t reached before. Just in our internal sales at our taprooms and Stone Brewing World Gardens & Bistros, we’re seeing the Buena Family consistently reporting toward the top of our sales reports.”
Former PBR Brand Manager Discusses Firing
Former Pabst Brewing Company brand manager Corey Smale discussed his dismissal from the Pabst Blue Ribbon maker in an interview with AdWeek.
Smale said he sent the tweet from the PBR account that suggested those taking part in Dry January engage in a taboo sex act. He described the tweet that was ultimately deleted and led to his firing as going “too far in the right direction — which I think then crosses the line into the wrong direction. Trying to be loud on Twitter. And certainly, obviously, it was loud.”
Smale added that the tweet was “wrong because it was wrong for PBR.”
“They decided that, and I’m not going to disagree with that. I’m not going to say anything bad about PBR, either. Because I’m loyal,” he said. “I don’t want the discussion to be, ‘Is PBR right or wrong?’ Because that’s not what it is. I was wrong, and I was the one who did it.”
Smale said he takes full responsibility for the tweet.