Name: Why the Huge AB InBev, SABMiller Merger Should Be Stopped
Uploaded: 2016-07-26
Duration: 5 min 14 s
Description: The Boston Beer Company’s founder, Jim Koch, explains.

[ BLANK_AUDIO ] [ MUSIC ] When I started brewing Sam Adams, American beer was kind of a laughing stock. I wanted to restore the dignity And the nobility of America's brewing tradition. [ BLANK_AUDIO ] My dad, when he got out of brewmaster school in 1948, there were 1, 000 breweries. Over the next 35 years, until I started Sam Adams, Those thousand breweries dwindled to about 50. So, 95 % of breweries in the United States were driven out of business by this massive consolidation to the point where today 90 % of the beer made in the United States is made by just to enormous Intergalactic ruling conglomerates. And they're getting even bigger by the day, it seems. So what is this AB Inbev, SAB Miller merger going to mean for the beer industry in this country, assuming it foes through and it looks like it's gonna happen? It looks like, at least from what I read The Brewers Association which represents all the craft brewers in the United States is making a case that you can't just rubber stamp this. RIght. You need to try to protect the competitive structure of the US beer business and also the craft brewers in the United States Have been this source of tremendous innovation. So basically your saying you're concerned is that if all this consolidation that's going on not just at the largest level but within the craft brew industry as well that some of the innovation is going to go away. Well that's always the risk. Big companies are very good at many things. They are great at, you know, efficiencies, economies of scale, mass marketing, mass distribution. Creativity on the other hand, requires passion, individual pride, determination, willingness to do things that don't necessarily make economic sense. And that creates value in new ways, and we need both of those, and so I hope that the craft brewing industry in the United States is treasured. At Sam Adams we have 14 or 15 hundred People. Our average W2 comp is 70 thousand dollars a year. We've not only created jobs, but really good manufacturing jobs for Americans who have Pride and care about their craftsmanship. [ MUSIC ] Last summer, almost a year ago to the day, you were in front of the Senate, and you said, and I quote, because of our broken corporate tax system, I can honestly predict I will likely be the last American owner of Boston Beer Company. So, what specifically is wrong with our tax system that- Well, it's very simple Boston Beer Company is worth less to an American owner than a foreign owner because of our corporate taxes. If I make a dollar profit, the government gets 38 cents of it and I get 62 cents. If we were owned by a foreign company Through all kinds of things, that are perfectly legal, that $ 1 profit would not be $ 0. 62, it would be something like $ 0. 75, so an American owner can't compete with a foreign owner for an American company. The craft beer market It's now 11 % of the market, it's more than doubled in the last seven years, but there is a sense that some people have that maybe we're having another " beer bubble" and which you wrote about in your book, that happened in the late 90's. Do you think that that's happening or are there too many craft brewers popping up? I'm a brewer, so you could never convince me that there's too much beer. Particularly good beer. So I think that America could probably accommodate even more breweries. We are very active actually in supporting this craft beer revolution, that we helped Start through our Boeing American dream program. We have a philanthropic program that makes start up loans, small business loans to up and coming business and food. Beverage and hospitality brewings. And it's very counter intuitive that we would reach out and help Other small brewers grow and become competition. But one of the things that I've learned in 32 years of craft brewing is that we all need to support each other and that we will succeed together as a community. [ MUSIC ] [ SOUND ] [ BLANK_AUDIO ]

The Boston Beer Company’s founder, Jim Koch, explains.