InBev Attacks Again
                                                       by Harry Livingston

For the world's biggest brewer, no beer is too small.  As it fights defection from its blockbuster brands to craft
beers Anheuser-Busch InBev has turned to buying one of the country's largest suppliers for do-it-yourself beer-
makers, Northern Brewer, for an undisclosed sum.

Northern Brewer, based just north of Minneapolis, sells everything an aspiring brewer might want—grains, malt,
hops, yeast, carboys, kettles, pumps, refractometers, immersion chillers, airlocks, and  fermenters. For novices, it
markets a small-batch kits that will brew one gallon for $15 and up.  The company has built a large following in its
23 years and now has about 150 employees and four retail stores and to many people has played a not
insignificant  part in catalyzing the entire craft-beer movement.  Three years ago they acquired Midwest Supplies,
its largest rival. Since then, its competition has been mainly a smattering of small, regional shops.

It might seem that with the acquisition InBev will be equipping do-it-yourselfers drink even less Budweiser. But in
truth, anyone involved in home brewing is probably less likely to crack a Bud Light than from one of the country's
roughly 4,200 craft brewers—a number that's up 76 percent in the past three years.  The reason for the purchase
is a bit more insidious.  Owning Northern Brewer could give InBev another layer of research and development and
allow InBev to identify trends in order to get ahead of the curve.  That's an important consideration since InBev is
a massive conglomerate and its efforts to stay relevant have not always been successful.  However t it has had
some  success by purchasing at least eight U.S. craft brewers, including Goose Island, Blue Point, Breckenridge
and Devil's Backbone. Those brands and new imports have helped shore up revenue as flagship macro lagers
lose favor.

Homebrewing is very much a niche market—there are about 1.2 million homebrewers in the U.S. making about 2
million barrels of beer every year which is not of great significant to InBev, a $258 billion concern. There is,
however, another factor at play in InBev's decision: PR. Beer these days is about optics, and a simple glass of
beer can be charged with meaning—conveying something about its drinker. Furthermore, homebrewers are an
excellent resource of beer innovation. With their purchase InBev will now have access to every Northern
Brewer/Midwest Supplies customer’s purchasing trends (which kits sell best, which grains, hops, yeast, etc.),
which will likely be used to feed new beers into their growing craft/macro brewery portfolio of over 200 beer

You think InBev is a benevolent giant but in the last 6 months they have been investigated by U.S. antitrust
officials over incentives to distributors to sell InBev brands at the expense of local craft brands, have been under
a European Union antitrust investigation for preventing beers from entering the Belgium Market, most recently  
they were fined $6 million dollars for bribing Indian officials.  Their desire to dominate world beer can also be seen
in their purchase of SABMiller, creating the largest beer company in the world controlling 30% of the global beer
market. These actions do not indicate an appreciation for fair and competitive market practices.

As for home brewers, they will face a decision about whether or not they are willing to pay more to support a small
business or to save more money and go with the InBev enterprise. Homebrewing is many different things to many
different people, and in the end the decision will be made through purchases nationwide. If the majority of
homebrewers decide to support the In-Bev/ platform then the result will likely be a significant decrease in the
availability of local homebrew shops. If they choose to support their local stores who provide excellent service and
a helpful environment, then the industry could continue to grow.  

This purchase of Northern Brewer is just a small part of the plan to assure Big Beer’s dominance in the global
marketplace, and  put the pesky craft brewers in their place—or even destroy them, if possible.  Their first step
was in  creating their own quasi-craft brands like Blue Moon, Shock Top, etc.  Then they bought up popular craft
labels as they continued to bash craft drinkers in ad campaigns. Worse of all is their purchasing of distributors
around the country—creating an imbalance in the three tier system to the point to where AB-owned distributors
will only sell AB products, thereby shutting out craft brands and forcing them to find other means of distribution.

Simply put there is a growing fear of the rising influence of huge beer companies in the craft beer industry.  The
craft beer community is at its most critical moment since its inception as larger brewing corporations literally buy  
into the grassroots craft movement, irrevocably changing the marketplace.  The industrial giants that worked for
decades to marginalize the craft segment have found their old tactics ineffective,so now Big Beer has moved to  
for an age-old strategy: Purchase. Control. Obfuscate.

For me I will drink local and buy local - it's the single best things  we consumers can do to preserve true craft beer. - SPECIAL REPORT
Home Brewers Beware!
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