Beer Monopoly




  International Reports







Posted July 2016


USA – Is down-sizing or right-sizing an option for craft brewers?

Craft beer appears at the crossroads. There are more than 4,600 breweries in the U.S., and new ones open at a rate of about one per day. Pundits worry that craft brewers already produce more brands and varieties than supermarket shelves and bars can reasonably accommodate. There are only three options for craft brewers right now. They either need to grow bigger, club together and form groups to look bigger, or go really small and hold down their tiny bit of turf.

This is what Denver’s Wyncoop brewpub intends to do. Its officials announced at the end of June 2016 that Wyncoop will stop supplying beer to retailers and bars which are not part of its chain of restaurants.

This decision will certainly raise a few eyebrows. Wyncoop is Colorado’s oldest brewpub and one of its most famous. It opened in 1988, when several people, including Colorado’s current Governor John Hickenlooper, decided to revitalise (or gentrify) Denver’s run-down city centre by buying up an old warehouse and putting a brewpub inside. Read on


USA – Boston Beer files for Brexit trademark

Why, oh why? An attorney for the U.S. craft brewer Boston Beer on 24 June 2016, the day after Britain voted to leave the European Union, filed a trademark application for the term ‘Brexit’ to be used for a hard cider. The trademark petition was first brought to light on

Boston Beer is the parent of Samuel Adams beer. It also produces Twisted Tea, a line of hard-iced teas and Angry Orchard, a line of hard ciders. The company regularly trademarks potential names of drinks, said a company representative. Read on


United Kingdom – Brew-on-premises concept stages comeback

Twenty years after the first Brew-on-Premises (BOP) shops opened up in parts of Switzerland and the U.S. - before quickly declining - the concept is enjoying a revival. The London DIY brewery UBREW (a pun on ‘You Brew’) has pre-sold over 75 percent of memberships for its second BOP site in Manchester before it is even open, U.K. media reported in June 2016.

It may be an indication that lots of people are willing to put money behind a not-as-yet-explored hobby that UBREW managed to collect GBP 112,000 (USD 145,000) via a crowd-funder. Read on


Sweden – Selling their beer remains a challenge for craft brewers

How does a craft brewer spoil himself for his 50th birthday? Answer: He builds himself another brewery. Sweden’s major craft brewer Oppigards, owned by husband and wife team Björn and Sylvia Falkeström, is currently putting the finishing touches to a second brewery which is to go on stream in early September. Mr Falkeström’s birthday is in early October.

Both breweries are located in his home village of Ingvallsbenning in central Sweden, where his family owns a farm. Both breweries will have a total capacity of 60,000 hl beer. Because of a change in the law, which now allows breweries to run a taproom that is open to anybody and not just to small pre-booked groups as it was before, Mr Falkeström will install a restaurant and kitchen as well as a beer garden.

Probably hoping for another change in Sweden’s prohibitionist alcohol laws, Mr Falkeström last year started selling his craft beer in supermarkets to enjoy the first-mover advantage should supermarkets eventually be allowed to offer full-strength beers. Currently, supermarkets can only sell beer with an alcohol content of up to 3.5 percent ABV. Mr Falkeström and the other five craft brewers, which supply the supermarkets, have had to comply and brew a special mid-strength craft beer exclusively for them.

Since the law prevents him from doing business with the retailers directly, he has to deal with distributors, who in turn deal with the supermarkets’ central organisations, to the effect that the middle-men eat up all his margins. Exploiting their market muscle, the supermarkets looked at Oppigards’ financials only to tell him that he is making too much money and would have to lower his ex-brewery price until it is to their liking, Mr Falkeström complains.

Ever greedy, Sweden’s food retailers not only pay Oppigards a pittance, they also put such a high mark-up on these mid-strength beers that Oppigards’ light beer retails at almost the same price as his full-strength 5.5 percent ABV craft beer at the Swedish state-owned monopolist retailer Systembolaget: about SEK 20 (USD 2.40) for a 330 ml bottle.

Mr Falkeström calls himself fortunate that he can distribute 85 percent of his output (standing at 20,000 hl) through Systembolaget, which has a lower mark-up than the retailers and far better terms of payment. It makes Mr Falkeström proud that the monopolist has agreed to list nine different Oppigards beers, which means they cover a full shelf at their nation-wide network of 431 stores.

While things seem to work well for Oppigards, which was founded 12 years ago and is amongst the oldest Swedish craft brewers, more recent entrants tend to struggle. There are now 240 microbrewers. They mostly produce between 300 and 500 hl beer per year. For them it is proving an uphill struggle to get shelf-space at Systembolaget.

For its part, Systembolaget is not amused by the explosion of Swedish craft beer SKUs either, considering that in the ale segment domestic craft beers only account for 40 percent of Systembolaget’s sales. Most Swedish consumers, though knowledgeable about craft beer, still prefer an import over a domestic product.

Per capita consumption of beer in Sweden is under 60 litres. Seems like Swedish craft brewers will need to do a lot of consumer education before they can overcome consumers’ reservations. Open-to-all taprooms might help.


France – Beer economist Germain Hansmaennel celebrates 70th birthday

Taking a break from writing the definitive book on his Beer Monopoly, the French beer economist Germain Hansmaennel celebrated his 70th birthday on 5 July 2016 in Strasbourg. It was a lavish party for over 100 people, among whom were representatives from the hop merchant Barth Haas Group and the Tucher brewery as well as his two co-authors.

Never one to sit idle, Mr Hansmaennel today sports many hats. He is an entrepreneur, a dedicated philanthropist, a world traveller, and undisputedly one of the most knowledgeable analysts of the international brewing industry.

If you were to call Mr Hansmaennel at 3 am and ask him “What is the market share of Heineken in China?” he would know the answer immediately.

Mr Hansmaennel has a phenomenal memory for numbers. But figures are not just abstract entities for him. He also knows what they mean, which corporate strategies are behind them and how the respective brewing groups act globally.

His major achievement is the invention of the Beer Monopoly. He was the first to notice that the consolidation and globalisation of the brewing industry resembles the Monopoly game: who buys which streets (i.e. countries), who builds hotels (i.e. brands), who has the best chance to win the game.

It took brewers a long time to grasp the fundamentals of the Beer Monopoly. A director of a major German brewery attacked Mr Hansmaennel on stage in front of an audience of 800 people at the World Beer & Drinks Forum in Munich by saying: “We do not throw dice!”

This man obviously had not figured that the Beer Monopoly for Mr Hansmaennel is only a metaphor, a catchy comparison for the rapid consolidation of the brewing industry.

The first to recognize the brilliance of this idea was Rüdiger Ruoss, who gave Mr Hansmaennel the opportunity to elaborate on it in public. For the international brewing and drinks industries Mr Ruoss was what Klaus Schwab was for the World Economic Forum in Davos: the founder, a brilliant networker and visionary.

Between 1997 and 2005 Mr Ruoss facilitated three gatherings of all the major CEOs, all major analysts, many big distributors, and all major suppliers in Munich. The World Beer & Drinks Forum was THE meeting place for these industries.

At the request of the Barth Haas Group, Mr Hansmaennel for many years published his annual beer report, called “Market Leaders and their Challengers in the top 40 Countries”, which became an indispensable compendium.

But crunching numbers has not been Mr Hansmaennel’s sole occupation since leaving his post as Director of France’s brewer Kronenbourg in the 1990s. He also set up a beer import business in France, having identified an opportunity for Tucher’s beer in the CoolKeg, a self-cooling beer keg.

For the past year, Mr Hansmaennel has been busy co-authoring a book - together with Ernst Faltermeier and ‘yours truly’ Ina Verstl - on his Beer Monopoly. Entitled Last Call. Endgame in the Beer Monopoly, it will be published by Hans Carl, Nuremberg, in November 2016.

It will certainly draw attention and hopefully no more silly comments like “we do not throw dice!”


Belgium – EU probes AB-InBev over curbing parallel imports

The European Commission, which also serves as the EU’s antitrust watchdog, has launched a probe into AB-InBev over concerns that it is using its dominant position in Belgium to prevent “parallel trade” of its own brands from neighbouring countries.

The probe, announced on 30 June 2016, could not come at a worse time. The world’s number one brewer is in the process of purchasing its rival SABMiller, in a deal worth some GBP 77 billion that would create the world‘s largest beer company.

The commission has already vetted that merger, as has South Africa’s Competition Tribunal, though with conditions attached in both cases. Read on


USA – Lagunitas opens two community rooms for non-profit fundraisers

It’s a new kind of philanthropy: Lagunitas’ founder Tony Magee, 55, announced on 29 June 2016 he will open venues in two of the nation’s brewing hotbeds — Portland, Oregon, and San Diego, California — to be used exclusively by non-profit agencies for fundraising.

Lagunitas will provide the space, beer and staff gratis, as it already does two nights a week at its Chicago and Petaluma, California, taprooms.

Founded in 1993, Lagunitas became the sixth-largest craft brewer in the U.S. in 2015, with two breweries in Petaluma and Chicago, plus one to open outside of Los Angeles. In 2015 it produced about 800,000 hl beer. Also last year Mr Magee sold a 50 percent stake in the company to Heineken in a deal estimated at USD 500 million. Read on


United Kingdom – Carlsberg to outsource logistics to DHL

Carlsberg will restructure its business to focus on its brewing operations. It will cease to run its own distribution services in the UK, it was reported on 29 June 2016. Additionally, it will no longer provide porterage services, as it will transfer its remaining logistics operations to DHL Tradeteam during 2017 and 2018. The move follows a review of its supply chain. It is unclear at this stage how many employees will be affected. Carlsberg employs 1,800 people in the UK, of whom 900 work in some form of logistics. Read on


Russia – Ban on sales of beer in big plastic bottles

Russian President Vladimir Putin in June 2016 has signed a bill prohibiting the production and sale in Russia of beer in plastic bottles larger than 1.5 litres. The bill affects the production of such bottles from 1 January 2017. Sales will be banned from 1 June 2017. Initially, the law would have banned bottles over 0.5 litres, but was changed after complaints to the Kremlin from beer producers.

About half of all beer in Russia is sold in plastic bottles because it is cheaper than glass, and sales of bottles affected by this bill account for 20 percent of all beer sales. Making the switch to glass and downsizing will be costly and likely drive the price of beer even higher, Russian media say.

In the past, Russia’s brewers packaged their beer in PET bottles even larger than 2.5 litres, but in 2013 discontinued them. Read on


USA – Judge dismisses Blue Moon lawsuit

The legal pursuits by some beer aficionados to force the Big Brewers to disclose that they are behind some “crafty” beers, have suffered a set-back. In June 2016 MillerCoors won the dismissal of a proposed class action lawsuit by a consumer who had accused the brewing giant of tricking consumers into paying premium prices for its Blue Moon beer by falsely portraying it as “craft beer”. Read on




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