NBWA Spells ‘Change’

Annual wholesaler’s convention leaves many wondering what might be next

“ Cha, cha, cha, changes” was the dominant topic among at the annual National Beer Wholesalers Association convention last week in San Francisco.
In just one year, top US beer dog Anheuser-Busch was acquired by Belgian-Brazilian InBev, No. 2 and No. 3 in the U.S. market, Miller and Coors, formed a U.S. joint venture and rumors of a possible sale of No. 4 player, Corona importer Crown Imports began to gain momentum.

“Not since Prohibition was ended 75 years ago has our industry seen so much change,” distributor Dan Henry told convention-goers from a stage designed to look like an upscale bar.

“We are facing new frontiers and new questions,” said the association’s outgoing chairman, Aldo Madrigrano, a Milwaukee-based MillerCoors distributor. “Recent actions by our supplier partners have created real problems for many.”

NBWA President Craig Purser sounded a more defiant tone: “Retailers and suppliers are trying to control our business, and distributor independence could be a casualty. We will not let that happen.”

The big brewers did their best to reassure their important second tier partners. Dave Peacock, A-B’s VP-marketing, attempted to rally the distributors into a collective mission by saying “Wine and liquor are the enemy. We cannot let wine out-romance us and liquor out-fun us.”

Probably the hottest topic was the MillerCoors demands on their distributors as outlined in the new contract recently sent out to most of their wholesalers. That and the obvious rapid deployment of consolidation efforts have kept many Miller and Coors distributors wondering what the next day may bring.

About the only thing that was certain among those who left the convention; another year of dramatic change.

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Comments

  1. admin says

    There are many little issues within the contract that have caused distributors to complain (minimum insurance coverage, a provision that states MillerCoors must approve the Operations Manager of the distributorship if it is not owner-run), etc.

    But the biggest issue with most distributors, and certainly raises concern within the craft industry, is a provision in the contract that gives control to MC when the distributor takes on a “substantial malt beverage brand” that is not in the MC family. MC asks for approval rights if a distributor acquires any non-MillerCoors brands that equals 20% or more of a distributor’s malt beverage volume in the territory for the previous calendar year.

    Whoa Nelly. What this means is that if a MC has approval rights over which brands the distributor takes on (if that brands meets the 20%). Distributors want to be independent – and not controlled by any one supplier.

    However, I just learned today that because there was so much grief from distributors at the SF convention, that MC will reevaluate the contract. I’ll have more as those details become available.

    Admin