Sam Adams and Miller Fight Over Future Of Craft Beer

Apr 10, 2017

A beer battle is brewing between Sam Adams and Miller Lite.

The companies that make those beers, Boston Beer (sam) and Molson Coors (tap.a) respectively, have found themselves in a war of words after The New York Times published an op-ed by Boston Beer founder Jim Koch in which the brewer lamented the effect Big Beer mergers have had on the craft beer industry. According to Koch, mergers and acquisitions led by Molson Coors' subsidiary MillerCoors and Anheuser-Busch InBev (bud) have led to $2 billion in higher prices annually, thousands of lost jobs, and a more restrictive wholesaler channel that favors Big Beer over craft upstarts.

"I worry that yet another major shift in the beer landscape is upon us — and this time, American consumers will be the losers," writes Koch in a Times op-ed entitled "Is It Last Call For Craft Beer?" That piece comes shortly after the trade organization Brewers Association—which advocates for the craft industry—reported 2016's volume increased a fairly modest 6%, partly due to Big Beer binging on craft rivals at a rapid pace. When large-scale beer concerns buy craft brewers like Ballast Point and Lagunitas, sales of their ales are no longer deemed "craft"—though they are often still marketed and stocked as a craft brewer. The craft industry had previously reported double-digit annual volume growth, but those heady days appear to be over.

Koch is particularly upset that the Justice Department allowed Big Beer to bulk up, first by approving the merger of Anheuser Busch and InBev and then by allowing Molson Coors to take full control of the MillerCoors joint venture when SABMiller got acquired by AB InBev. And since then, both of those big brewers have been on a buying spree in the craft world, further muddling the industry as consumers aren't always aware that their beloved Ballast Point, Goose Island and Elysian beer are owned by "Big Beer."

MillerCoors, however, is disputing much of what Koch has claimed. In a blog posted on Monday, the big brewer says craft continues to grow—becoming an industry of more than 5,300 players versus just over 1,500 in 2008. Craft also has 26.9% of shelf space as of 2016, up from 23.2% two years early, MillerCoors alleges.

"It's true craft has changed," said MillerCoors' content writer James Arndorfer. " It's become more fragmented, more local and the proliferation of brewpubs is giving people a new way to enjoy and experience beer." MillerCoors also strongly alludes that Koch's sour feelings about the state of craft may have to do with the fact that Sam Adams' franchise is suffering from a sales slowdown. As Fortune has reported, larger national craft brands like Sam Adams have found themselves squeezed by local, craft upstarts and Big Beer, resulting in sales softness.

AB InBev also responded to the piece, saying in a prepared statement, "We understand Boston Beer sales are hurting right now and it is easy to blame the bigger brewers. But with 5,300 breweries out there, the numbers don't stack up, and we only see positive, exciting things ahead for our industry and for craft in particular, certainly not its demise!"

Both Molson Coors and AB InBev took issue with the accuracy of Koch's piece. One major sticking point for Molson: Koch described the brewer as "foreign-owned" but Molson files financials jointly from Denver and Montreal.

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