Union workers at San Francisco-based Anchor Brewing are in limbo, as negotiations with company leadership for a new contract have stalled and the union’s initial contract has expired, according to union leaders.
The union announced the contract expiration on social media channels on March 31:
“Update: As of today, our contract with Anchor is expired. The bargaining unit voted close to 100% to not extend. We will continue to bargain with the company going forward and as of now nothing is changing. We offered to open bargaining early, but the company refused, which led us to this. We will update you as we continue to bargain. As always, solidarity forever.”
Delays in contract negotiations aren’t necessarily due to malicious intent on the part of Anchor or its parent company, Japanese beer maker Sapporo, but rather a lack of experience and knowledge about union contracts and best practices, according to bottling and racking lead Patrick Machel.
Machel and fermentation/filtration worker Nate Dias spoke to Brewbound about the situation, and what they’ve learned through the process. Both Machel and Dias serve as “shop stewards,” who volunteer to represent Anchor’s workforce when discussing issues with management.
Anchor declined Brewbound’s offer to comment.
How We Got Here
Employees at the 127-year-old brewery finalized their first union contract in January 2020. The three-year contract included wage increases, paid lunch breaks, paid time off for part-time workers and more. Looking to clarify some “ambiguous” language and add some additional benefits, union leaders approached Anchor in July 2022, nearly eight months before the contract was set to expire, ready to negotiate the next contract, according to Machel and Dias. However, negotiations were pushed by the company until January 2023.
The initial request to negotiate was allegedly turned down due to leadership changes at Sapporo USA, who “wanted to get to know the company more practically going into dealing with the union contract,” Machel said. Negotiations were moved to November, but moved again to January, to avoid the holiday selling season.
“Three months to negotiate a second contract for the first craft brewery in America to unionize. … There’s not enough foresight,” Machel said.
Anchor allegedly offered to extend the union’s existing contract, but did not include in their offer any form of guaranteed backpay, a perk typically included in contract extensions should the new contract include higher wages and benefits, according to Machel. As a result, the union voted “nearly 100%” to not extend.
“The contract’s still in effect, but the biggest thing is essentially that we can strike [and] they can lock us out,” Machel said.
The next step in negotiations is for both sides to submit their proposed “economics.” Anchor leadership is allegedly “holding fast” and have failed to submit their proposed contract details, “even though they were the ones who recommended that they would submit economics first,” Dias said. The union itself has about “99% of the language tentatively agreed on,” for its first proposal, but is holding out for Anchor to submit first, Dias said.
“It’s pretty easy to reject pretty solid proposals,” Machel added. “It’s harder to make your own proposal and then see what happens on the other side.”
Anchor has allegedly missed several self-imposed deadlines for submitting its economics to the union. Machel and Dias again insisted that the delays aren’t due to ill will. In fact, Sapporo’s new leadership is “a lot more accommodating” than the leadership workers first negotiated with in 2020, Machel said. The problem is “across the table, nobody has actually written a contract,” he continued.
The union itself is also still figuring out best practices, with this being the first contract renewal its had to handle.
“We don’t have, like a bigger brother to look to, for what this is supposed to look like,” Machel said.
Anchor has also become a leader for other craft breweries considering unionizing, giving more weight to how the situation unfolds, Machel said.
“It’s not just our contract for our workers that we’re really doing this for, it’s other breweries that are also following in our footsteps,” he said. “If we can get a pretty solid contract, we could show other breweries that if you unionize, and you guys understand the collective power together, that you can get even better than what we’ve got.”
The Stone Brewing of it All
Adding to the dynamics of the situation is Sapporo’s acquisition of Escondido, California-based Stone Brewing. Sapporo purchased the top-10 U.S. craft brewery (by volume) for $165 million in August, with final purchase details likely being ironed out the month before, when the union first approached the company about contract negotiations.
The Stone deal allegedly caused a stir among Anchor workers and management alike, with some of the company’s leadership concerned for their jobs, Machel said. Machel and Dias claim there has been a “lack of transparency” in Sapporo’s plans with Stone and how it affects Anchor. Sapporo allegedly operates the two breweries independent of each other, but Anchor workers have noticed resources going to Stone – including an expansion of its Richmond, Virginia production facility – while Anchor workers are fighting for equal wages.
“We have a billion dollar company that is basically running the show here,” Dias said. “They’ll say that Anchor is a different company than Sapporo, [but] they’re the ones pushing the money, and if they have enough money to acquire a $165 million other brewery, they have enough money to pay wages, that is just that’s an asinine argument.”
Anchor increased production +45% in 2021, to 72,500 barrels, according to the Brewers Association (BA). 2022 production data has yet to be released. However, Sapporo USA was the No. 19 largest brewery by volume, according to the BA’s 2022 top 50 list, released today. Sapporo’s 2022 production numbers include Anchor and imported brands, but will not include Stone Brewing’s barrelage until 2023, according to the BA.
Stone production declined -2% in 2021, to more than 326,000 barrels. However, early data suggests a stronger 2022, with the brewery rising from the No. 9 craft brewery by volume in 2021, to No. 7 in 2022, according to the BA.
The ‘Underlying Entitlement’ of Breweries
Included in the union’s expected requests for the new contract are higher wages, healthcare 100% paid for, and a higher 401K matching.
“We do live in the most expensive city in the United States,” Dias said. “And we’ve lost really good workers to other breweries, who put out way less beer and pay a lot more.
“And that is, in my opinion, unacceptable for a brewery that is owned by a billion dollar corporation to withhold wages like that to our workers,” he continued. “And they have told us on multiple occasions that they don’t want Anchor to be the training ground for our workers to go to other breweries, but they’re not doing anything to mitigate that.”
The resistance to pay brewery workers higher wages stems from an underlying theme within the craft industry, where working in beer is seen as a “privilege,” Dias said.
“There’s this underlying entitlement by the company to be like, ‘Well, this is a privilege that you get to learn this trade,’ but for me, I view that as exploitation.” he said. “A lot of people, this is their hobby they turn into a career. And so, breweries see that and go, ‘Well, we’re gonna use this as a way to keep wages low, healthcare minimal, 401k, if you’re lucky.’
“What we really want to drive home is this is your job,” he continued. “At the end of the day, if you can’t live off this, you’re being exploited, and we want that to change industry wide.”
The feeling of exploitation has caused some tension within the Anchor workforce, with Machel, Dias and other shop stewards having to “calm down people from doing something drastic” in the hope of negotiations going smoothly.
“Everybody’s ready to start throwing down and I hope the company knows that, but I don’t think they know the extent of what can become an issue,” Machel said.
“I don’t think we’re at the point yet to start making any drastic decisions,” Dias added. “You start saying the word strike, that’s like hitting the nuclear codes, and right now, the main goal is to see the economics on the table. Once we see the economics on the table, then we can start calculating our next move in a much more calculated way as the bargaining unit.”
The Future of Craft Brewery Unions
The overall environment for unions has changed in the past few years, with workers across industries exploring the option. Machel has advised workers at other companies such as Tartine Bakery in San Francisco and Fair State Brewing in Minneapolis, Minnesota.
In the more than three years since Anchor workers began their first negotiations, the temperament toward having a union has also changed, Machel said.
“A lot of the people that were anti-union at the beginning, that are still here, have changed their minds about what they feel about the union, because back then it was a big Boogeyman,” Machel said.
“The country is so pro-union right now, more than we’ve seen in a long time,” Dias added.
Still, union efforts are rarely smooth sailing, as seen most recently at Athens, Georgia-based Creature Comforts Brewing Co. Brewery employees, represented by the Brewing Union of Georgia (BUG), have filed multiple complaints this year against the brewery, alleging unfair labor practices and union busting.
“If you’re starting your first [union] contract, be persistent,” Dias said. “Get everybody on board and don’t stop fighting, because you do not want to give up. As soon as you start gaining momentum, do not lose it.”