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Sep 20, 2014

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RBPMail 2.06, June 1996

Real Beer Page Mail (RBPMail) began as a modest update to craft-brew events on the WWW. It evolved into a news digest and sometimes editorial forum. We present its contents here much as they were emailed to subscribers. Often, links you will see are out of date, and businesses referred to may also be long gone.

In this issue:


First Irish Micro!

Dublin's first microbrewery, The Porterhouse Brewing Company, opened May 28, 1996. A New Orleans style funeral procession, lamenting the death of the numerous Irish breweries, complete with samba band, Brazilian dancers, fire eaters, jugglers and an antique horse-drawn hearse, wound its way through Temple Bar to the new brewery in Parliament Street. Master brewer Brendan Dobbin aims to produce 15,000 pints a week, with Oyster Stout and Porter House Red among the new offerings. Owners Oliver Hughes and Liam Le Hart will not stock any other beers, believing their three stouts, three lagers and two ales will keep customers happy. Oliver quipped: "The idea of a microbrewery was fermenting in my head for years. I looked at similar pubs abroad before deciding the time was right to open one in Ireland. We hope to have bedrooms we will rent out like an old inn, and under that there's the new restaurant." But Liam added: "Let's hope our ideas work, or we'll have one unhappy bank manager." (Source: The Irish Times, May 29, Wednesday, Home News; Pg. 3; Daily Mirror, May 28, Tuesday, News; Pg. 3)

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Palestinian Micro Is Kosher

Taybeh Beer, the first Palestinian beer, has received a rabbinical stamp of approval, brewer Nadim Khoury said Tuesday. The microbrewery was inspected by Rabbi Avraham Gisser of a nearby Jewish settlement, who made sure there was no contamination by any non-kosher ingredients. The beer, brewed in a West Bank village near Ramallah since last year, is already sold in many bars and stores in Israel, as well as in the West Bank. But the kosher certification will open up new markets in Israel, where many restaurants, hotels and grocery stores serve only kosher products.

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German Beer Market Challenged

Per Capita Annual Beer Consumption In Germany:
1983 39.3 Gallons
1994 36.9 Gallons and the population increased by 18 million with German reunification on Oct. 3, 1990.

Declining beer consumption, increasing production costs and stagnant markets are challenging brewers in "the land of Oktoberfest." Forty-two breweries went out of business last year in Bavaria, and nearly 600 have vanished throughout Germany since 1970. In the next 15 years perhaps half of Germany's 1,243 remaining breweries will shut, according to Andrew Hampp, a beer industry analyst in Munich. About half of all German beer makers are believed to be losing money, despite the fact that annual beer consumption is the equivalent of 65 six-packs for every person in the country, and breweries produce about 3 billion gallons a year, generating sales of $ 13 billion. Still, hard times have been coming to a head. Per capita consumption is down about 4 percent compared to a decade ago. At the same time, brewers have modernized with such a vengeance that Hampp estimates Germany has at least twice the capacity needed to meet current demand. Although costs for wages, energy and raw materials have steadily increased, the flat demand and stiff competition pushed beer prices down more than 2 percent a year from 1992 and 1994. Moreover, it is difficult to establish economies of scale in a country where brewing remains very much a local enterprise; two of every three breweries sell only within a 35-mile radius of their vats. In this respect, Germany has long been at the stage that the American microbreweries are striving to reach a wide range of beers brewed not far from home.

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German Production & Market Share Vs. U.S.

The biggest German brewery group, Brau & Brunnen AG, produced about 290 million gallons in 1994, compared to 2.5 billion gallons for the biggest American brewer, Anheuser-Busch Co. Whereas just two companies -- A- B and Miller Brewing Co.-- control two-thirds of the U.S. beer market, Brau & Brunnen holds only 10 percent of the German market, with its nearest competitor claiming only 8 percent. (Source: Rick Atkinson, Washington Post Foreign Service, May 29, Wednesday, Pg. A14, Special correspondent Petra Krischok contributed to the report.)

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U.S. Supreme Court Rules Ad Price Bans Unconstitutional

On May 13 the high court struck down Rhode Island's 40-year-old ban on liquor price advertising, ruling that free speech as guaranteed in the First Amendment outweighs a state's authority to set alcohol-control policies. If the opinion "as a whole" conveys "a message, I would say it is that the protection of all truthful advertising is enhanced," said the lawyer for the plaintiffs, Evan T. Lawson of Boston.When Lawson argued the case before the Supreme Court last Nov. 1, he suggested that Rhode Island's law was a poorly disguised way to protect "mom and pop" liquor stores in Rhode Island from being undersold by big liquor chain stores. To legal scholars, the case was significant because it gave sweeping protections for commercial speech and stes valuable precident for lawyers challenging other advertising restrictions. Since the 1970s the high court has held the First Amendment covers advertising, and yesterday's decision was another in a a line of decisions upholding protections for truthful, non- misleading commercial speech to the level of constitutional protection long granted political and artistic speech. "The First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good," wrote Justice John Paul Stevens in his majority opinion. In essence, the high court rejected the state's argument that the 21st Amendment to the Constitution - which repealed Prohibition - conferred special state authority to police alcohol consumption, even to the point of infringing freedom of speech. "The 21st Amendment," Stevens wrote, "cannot save Rhode Island's ban on liquor- price advertising." The case has been closely watched by liquor sellers in about a dozen states (including Ohio - see next article) that impose similar bans. The court splintered on much of the reasoning behind the ultimate judgment. Three justices, Clarence Thomas, Antonin Scalia and Sandra Day O'Connor, issued concurring opinions that broke with much of Stevens's reasoning. The court divided, on the key issue of the state's right to limit the freedom of commercial speech in order to advance a particular social good - in this case, moderate drinking. Stevens wrote that higher taxes on liquor, rations on per capita purchases and other tools "would be more likely" than ad price bans "to achieve the goal of promoting temperance." But only two other justices joined him in that reasoning, which partly echoed Senior U.S. Distirct Court Judge Raymond J. Pettine's 1993 ruling, striking down the Rhode Island law in part. In invalidating the ban, the court overturned a 1994 ruling by the 1st U.S. Circuit Court of Appeals in Boston, which found "inherent merit" in the state's argument that the advertising ban, by discouraging bargain-hunting, kept liquor prices high and served the state's goal of discouraging liquor consumption. (Source: Scott MacKay; and John E. Mulligan; The Providence Journal-Bulletin, May 14, Tuesday, News, Pg. 1A)

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WWW Survey - Still Time To Win



Our survey is going along pretty well. We've received thousands of responses,. We've also heard about some problems from people using some lesser browsers. If the survey fails to work for you, we encourage you to print it out or save to disk as text, complete the survey and fax to us at 415.387.5406 or email it to us at survey@realbeer.com.

There is still time for you to complete the survey and enter our Grand Prize Drawing for a trip to BELGIUM & HOLLAND with European Brewing Adventures (http://realbeer.com/eba/).

Fill out the survey now at:

http://realbeer.com/survey/


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Pabst Facing Troubled Times

Pabst Brewing Co. and Brewery Workers Local 9 halted negotiations Friday evening, May 31, allowing their labor contract to expire. Brewery workers will continue to work for the time being and are meeting to discuss their options, which include striking. The union has been seeking a new three-year contract for the past year. Pabst sought more than 60 changes to the last union proposal including cutting health care benefits for all future *and past* retirees. Pabst has been struggling, with shipments down 10% in the first quarter this year and 1995 production down 6.7% over 1994's output. The company laid off 250 workers earlier this year after announcing it would contract brew nearly a quarter of their production with G. Heileman, now owned by Stroh Brewery Co. (Source: James Causey, Milwaukee Journal Sentinel, June 2, Sunday, Business, Pg. D1)

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Ohio B.O.M. Scuffle

Ohio's Department of Liquor Control Legislation found Columbus- headquartered Beer Select Inc., a beer-of-the-month (BOM) club, in violation of Ohio's ban on advertising beer prices in its promotional material. BSI, a small, family operated club of 300 members, ships micro- brewed beers from around the world at a cost of $14.95 per month, plus shipping and handling. Owner Brian McCall says that he is not advertising beer prices, but merely the cost of service. Potential subscribers need to know the price of subscription. McCall also says that the price does not reveal the actual retail price of any beer, which is at issue. BSI faces a $200 fine or two days suspension of business. In addition, all printed materials display membership prices and will have to be reprinted. McCall says he can appeal, which would probably cost the business about $4000. Betty Montgomery, Attorney General, will review the recent Supreme Court ruling (see above) that similar ad bans violated free-speech rights to decide if Ohio's laws are affected. Montgomery can be contacted at 614.466.6410 by constituents interested in expediting her review which may take months. The complaint against BSI was filed by J.R. Lumpe, a lobbyist for the National Wholesaler's Association, an organization with a pledged objective of putting BOM clubs out of business. McCall says, "I don't know why they would target me. I distribute in Ohio only and buy directly from distributors, operating with a retail license." McCall also informs us that Lumpe bought a BSI subscription as a gift for Dan Cesner, Beer & Wine Chief of The State of Ohio. A former Beer & Wine Chief expressed concern that Lumpe's gift may constitute a severe conflict of interest violation.

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Canadian Tax On Beer & Wine Making Food Items

The government of Quebec announced in its budget Thursday that starting May 16, the 6.5-per-cent provincial sales tax will be added to grapes, concentrated or nonconcentrated, malt, malt extracts and similar products used to make wine or beer. Federal tax will not apply. "They want to tax food and that's not fair," said beermaker Nicolas Balikci at a supply store. He was referring to the sugar, yeast, malt and other products lining the shelves. "They sometimes sell honey in this store," said Mary Schurman, another customer. "How do they know I'm not going to put it on my toast?" Some home brewers even suggested that extending the provincial sales tax to beer and wine-making ingredients is an attack on ethnic communities. The tax will hit people like Garcia Moutinho, who estimates he spends $1,000 on grapes to make about 150 gallons of wine a year. "It's bad for me and for all the guys like me - Italians, Portuguese, Greeks." Grape-seller Claudio Porco wondered how the government can tell the difference between grapes that are eaten and those that are pressed to make wine. (Source: Yvonne Zacharias; The Gazette - Montreal; May 11, Saturday, News; Pg. A3) A local merchant due to open a microbrewery in Quebec soon insists that this is not an ethnic issue. If consumers or home brewers want food items without taxes, they can buy them at the local retail stores. The group affected by the tax and therefore most vociferous will be the home and wine making suppliers.

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******* WEB WATCH *******

New Brewspapers Online!!!!

Midwest Beer Notes, published for four years and boasting a combined distribution in print with its sister publication, Rocky Mountain Beer Notes, of 105,000 in 16 states, is now online and fully searchable. Beer Notes publisher, Mike Urseth, explained his decision to join the Real Beer Page with one of his favorite vices; a story: "In the early days of this century, railroads were king. Railroads owned more land than anyone but the Federal government. Everything that moved in this country went by rail. When the fledgling technologies of auto, truck and air transportation were born, the railroaders ignored them.'We're railroad men,' they said. Rather than getting in on the ground floor, they looked down from their Olympian heights and dismissed the upstarts. If they had realized that they were not in the railroad business, but in the transportation business, their companies would've literally owned the transportation system of the country. At Beer Notes, we realize that we are in the communications business. Not the ink on paper business. Not the fish wrapper business. But the business of transferring ideas and images to as many people as possible." Find the rest of his stories online at:

http://realbeer.com/beernotes/

Say Aloha To Our Hawaiian Friends

Brew Hawaii has brought its most recent issue to the WWW in full and funky color with articles from beers to spirits to cigars. Catch all the hand- crafted craze at:

http://realbeer.com/brewhawaii/

Great Lakes Brewing News and Southwest Brewing News are also in the works. Expect to see them online by next month's RBPMail!

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Beer Sites To Surf:

************ Brand Spanking New!!! ************
Barley Boys Brewing - This site is a hoot. Meet Ma Barley and her boys:

http://www.barleyboys.com/

Bohemian Brewing Systems - Check out the Brew Block.

http://realbeer.com/bohemian

Dogfish Head Brewing - Here's a couple of wet puppies for you:

http://realbeer.com/dogish/

************ Brewed Fresh For You! ************

The Real Beer Page announces a diverse group of brew websites to check out:
Big Buck Brewing http://www.bigbuck.com/ Brew Bus http://realbeer.com/brewbus/ Custom Brew Haus http://realbeer.com/brewhaus/ European Brew Adventures http://realbeer.com/eba/ Great Providence Brewing http://www.americanbrewing.com/ Lovecraft Ciders http://Lovecraft.com/ Malt of the Earth http://www.maltbev.com Thirsty Bear Brewing http://thirstybear.com/ The Village Brewery http://realbeer.com/village/

Fun & Games

First, the games: If you haven't seen them yet, check out the Caps game at McAuslan (http://www.McAuslan.com/) and the darts game at Hart Brewing (http://www.HartBrew.com). You can also win an official David Letterman Big Ass Ham for your submission into the Hart Brewing Food & Beer story archive.

Give your voice some distance with the questionaires and beer surveys found at Malt of the Earth Beer-Of-the-Month (BOM) Club (http://www.maltbev.com/), Leinenkugel's (http://leinie.com/), Beer Master's Tasting Society (http://www.beermasters.com/) and Flying Fish Brewing Company (http://flyingfish.com/).

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The Real Beer Stock Page!

Now you can track and research an all-beer stock portfolio in one place. Links from this page will also list stock offerings mentioned here in RBPMail that are not traded on the public exchanges. Check out and bookmark:

http://www.realbeer.com/rbp/news/stockquotes.php

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Trust Consumer Reports To Rate Beer?

A study in the June issue of Consumer Reports found that 17 trained beer tasters hired by the magazine rated Old Milwaukee, (a beer better known for its low price) best-in-class in a blind tasting. Second in the category of "regular and ice beers" was Stroh's. Both are made by the Detroit-based Stroh's Brewery Co. In other categories, Michelob Light was rated best among light beers, Sharp's among non-alcoholic beers, Molson Golden among imported lagers, Samuel Adams Boston Ale among "craft ales" (above venerable U.S. ales such as Sierra Nevada and Anchor), and Brooklyn Brand among craft lagers. Consumer Reports, which does not accept advertising and is known for rating cars and electronics, had never before studied beer. (Source: Consumer Reports and Frank Fuhrig, The State Journal-Register, Springfield, IL, May 25, Thursday, Local, Pg. 1)

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Fast Dogs & Hops: A Bad Combination

The National Animal Poison Control Center has had eight cases of dogs who ate hops residue from homemade beer and died. Seven of the dogs were greyhounds. Within hours of eating the hops, the dogs became severely depressed, developed muscle stiffness, and their temperatures began to climb out of control. They eventually began having convulsions and died. Something had apparently reset their internal "thermostats" so their body temperature kept going up and up inducing malignant hypothermia. According to Dr. Hare at the poison control center, scientists have not been able to determine exactly what the toxin is. It does not seem to be a problem in commercial brewing, and they have not been able to reproduce the toxicity in experiments. It appears that greyhounds are particularly sensitive to the poison. For speed, they are bred to have very little excess body weight. Fat helps to remove some drugs from the bloodstream. It seems that only some dogs, eating some types of hop residue, under certain conditions, will get sick and die. You can call the National Animal Poison Control Center for an expert consultation on any type of suspected poisoning. A call to 1-800-548-2423 costs $30 on your credit card, and includes follow up advice for treatment by your veterinarian. You can also call 1-900-680-0000. Charges of $20 for the first 5 minutes, plus $2.95 for each additional minute, will appear on your telephone bill. (Source: David Roen, Lewiston Morning Tribune, May 06, Local/Regional; Pg. 5A)

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Scratch And Sniff -- Smells Like Mean Spirit - Editorial

"What we don't like are crafty marketers duping the consumers," suggests cards placed by A-B in 3,000 U.S. bars, offering to "test your brewing knowledge" in exchange for a free Bud (which sounds like more of a sentence than a reward). "Who really brews these beers? Scratch off to find the answer," reads one card with pictures of Sam Adams and Pete's Wicked Ale. This is obviously not an I.Q. test, but more "crafty marketing" aimed at perpetuating the A-B created "controversy" over contract and "virtual" brewers which we reported in the February RBPMail (http://realbeer.com/newsletters/296rbpmail.php).

At Miller, I imagine marketing to look like the mythical Cerberus, the multi- headed dog-beast that guarded the gates of Hades in Greek Mythology. Their Plank Road (another "virtual brewery" targeted by A-B's campaign) advertising tells you to forget microbrews while their American Specialty and Craft Beer Company works diligently at supporting newly acquired regional craft brewed brands. One head cannibalizes the other.

For the sake of the consumer we represent at the Real Beer Page, and the real craft-brewers we honor, I'd like to fire the warning shot of caution to all parties embroiled in this trumped up battle -- especially the craft-brewers in Oregon that have been lead into contributing to the issue: The labeling issue may make great short term press, but the long-term affect is much more damaging. In the long run, consumers will not remember any of the microbrewers involved in the controversy if the situation progresses. Bear with me while I outline a cynical and truly crafty strategy to undermine the craft-brew movement:

1986: Big three support tax break for small brewers, allowing greater chances for micros to succeed. This creates thousands of breweries/voices and humanizes business to legislatures who were not so forgiving to a trilithic tobacco industry.

Late 80s: A-B successfully lobbies BATF to change existing regulations requiring point of origin, allowing A-B to list only their St. Louis, MO location on labels.

Early 90s: A-B and other large brewres and wholesalers maintain powerful legislative influence to keep micros out of distribution and retail shelves through capacity and container laws. These laws keep 22-oz. bottles, a microbrew standard issue size, and brewpubs from distributing in many states.

January 1996: A-B, with 45% of the market and committed to growing to 60%, creates confusion about successful marketing of several of its fastest growing competitors. Calls into question "who brews the beer." Files complaint with BATF to list point of origin; 35 Oregon micros support complaint. I'd like to call this Legislative Marketing.

March 1996: A-B, with a $260 million ad budget (retail clout) and nearly 100% of sales for "Bud" distributors, "recommends" an all A-B brand portfolio as the most profitable -- reports start coming in as early as May 1996 of craft-brands being dropped from Bud houses -- including some of their little Oregon bed-fellows from the January complaint. The campaign is called "100% Share of Mind and completely supported by word-of-mouth. At press time we've been informed by Benj Steinman of Beer Marketer's Insights that the wording of the 100% statement has been toned down from from a mandated to an encouraged approach for distributors.

April 1996: A-B starts to aggressively advertise a "regional" beer, brewed only in Texas (the A-B Houston Plant) for Texans. The most popular growth segment in that market is a bock beer, and A-Big Brewer comes out with a bock label that places a goat in front of the star found on the Texas flag, appealing to the state's strong sense of "local-nationalism." Ads tell people in adjacent states that they have to "come over" (metaphor for the brand) to try the beer.

My Predictions/Looking Glass: A-B's next steps will probably be to create several regional brands and eventually roll them out nationally. A-B distributors will be satisfied because they will have as extensive of a portfolio in beer styles as any competitor. The marketing message will continue to tout brand loyalty (worts of wisdom: bud-weis-er) as the safe way for consumers to cut through the retail shelf clutter to choose a beer. Passive consumers will be deceived into a status buy of a craft-beer created by A-B.

It looks like A-B can giveth and taketh away from the micros. Before the lambs sleep with the lion, they should consider his diet. A-B can't take away from 1000 local voices unified behind the micro-cause, but they can to those tithed to the A-B strategy. Right now the micros are divided and nationally unorganized. We applaud the regional efforts breweries are making to coalesce and will support this organizing every way possible. We're creating some tools we believe may help organize the industry at www.probrewer.com. IBS members can also participate in the brewer's forum by sending an email to list moderator Kate Hanley at ibs@aob.org.

The smallest brewers and those coming into the market stand to lose the most as selection of distributors narrows. Brewers affected by the 100% Share of Mind and losing distribution from a Bud distributor may wish to take the advice of an industry lawyer and do their own "Legislative Marketing." Rather than taking on A-B Lawyers head-to-head, you can appeal to the Justice Department, who is currently investigating Toys-R-Us and Frito Lay for anit-competitve behavior -- intimidation is enough to justify investigation. Our source also suggests that each state's Attorney General usually has political aspirations and no matter how conservative they are, taking on a conglomerate for the consumers scores big votes at the poles. Start a relationship with your State Attorney General, if you do not have one already, and ask them to look at the practices of distributors on a state level.

The Real Beer Page Mail now has over 25,000 readers. If each reader passes this on to 4-5 friends, we can also create hundreds of thousands of aware voices, participating in their own future selection and freedom of choice with beer. As active consumers, we have a responsibility to educate others about the misinformation and confusion being created by those amusing big brand commercials and press releases. As always, I encourage you to support your local brewer -- vote with your pocket book and with your voice by asking for their brands at retail stores and bars.

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