I'll get you Beer Baron... no you won't.

November 22, 2010 4:19 PM

"When we started Windy City, it was a means to an end, because there wasn't a distributor in Chicago that wanted to touch craft beer," Mr. Ebel says. "We went around to bars and they said, 'Great beer. How many free cases can you give me?' We just had to walk out of those accounts, set a price, and stick to it. And nobody asks us that anymore." Pay-to-play contreversy in the Chicago beer scene, with appearances from a who's who of Midwest beermeisters: Tracy Hurst of Metropolitan Brewing Co., Deb Carey of New Glarus Brewing Co., the Ebel Brothers of Two Brothers Brewing Co., and Josh Hall of Goose Island Brewing Company
posted by d1rge (30 comments total)

Sources say the big brewers and their wholesalers keep out the independents by offering cash, new tap systems, free beer and other incentives to tavern owners and retailers in exchange for taps or shelf space for mainstream brands.

Reminds of me of Vancouver, Canada up to the mid-1980s, a town so locked down by two breweries (cranking out godawful swill, it's worth noting) that when the brewing union went on strike (as it seemed to do every second year or so), there was literally NO BEER to be found in town.

But then something happened regarding licensing regulations in advance of the Expo 86 world's fair and we've been a functioning part of the civilized world ever since.
posted by philip-random at 4:33 PM on November 22, 2010

Oh, wow. A fascinating post featuring drama from all of my favorite local breweries. Awesome post, d1rge!
posted by verb at 4:42 PM on November 22, 2010

Awesome post. Comes as no surprise to this long-suffering Bell's fan.

(OK, to be fair I'm "long suffering" because I moved well beyond their distribution zone, not to Chicago specifically. But Larry Bell has been fighting the system for years. See also.)
posted by rkent at 4:44 PM on November 22, 2010

Al Capone was just ahead of his time.
posted by PareidoliaticBoy at 4:45 PM on November 22, 2010

I honestly had no idea pay-to-play existed until a week ago. A guy I know was lamenting the fact he couldn't get Bud to fund all of his taps and walk-ins in the bar he's opening soon. The AG is apparently cracking down in New York state. He did say there were other ways they were going to pay, they just can't pay for equipment anymore.
posted by JPD at 4:46 PM on November 22, 2010

Yeah, one of my local treasures is the awesome House Pub in St. Charles; the owner takes great pride in having an insane number of local microbrews on tap, the selection rotates regularly, and they have an insane number of high quality bottle beers to fall back on, too. That takes a lot of focus though and I can imagine how tempting it is for a bar that isn't all about that to just cash in...
posted by verb at 4:54 PM on November 22, 2010

When Bell's first left the Chicago market (before they came back in as Kalamazoo, as detailed in rkent's link above), they used to give 10% discounts if you drove to the brewery and showed an Illinois ID when you bought stuff.

Like how Pennsylvania somehow manages to be a good state for beer despite the state liquor control board trying to run everything, you have to give Chicago a ton of credit for supporting such a thriving beer scene in spite of how sleazy most of the distributors are.
posted by jackflaps at 4:54 PM on November 22, 2010

Frank Nitty wants his cut too.
posted by jfuller at 4:55 PM on November 22, 2010

@Verb, I was eating at Prasino just the other day with my girlfriend wondering aloud if St Charles had any good bars for craft beer. Good to know about House Pub. I live in Elgin, so I don't mind making the drive to the Barley House in Algonquin which is excellent in both the number of beers available and the food they serve.
posted by d1rge at 4:58 PM on November 22, 2010

Corruption? In the Chicago liquor market? Next you'll be telling me that elections there might not always be on the up and up!
posted by klangklangston at 5:05 PM on November 22, 2010 [5 favorites]

I have not had trouble buying Bell's out here in the suburbs... I see Two Hearted Ale, Oberon, and several others on the shelf pretty regularly. That link is a little old. Have they resolved the dispute?
posted by d1rge at 5:07 PM on November 22, 2010

The whole beer/wine/liquor distribution system nationwide is a scam. Establishments with a liquor license should be able to buy a bottle at the liquor store down the street in a pinch if they run out or Costco just because. The whole corrupt system is set up to protect deep pocketed distributors and the lackey politicos they've purchased.
posted by MikeMc at 5:12 PM on November 22, 2010 [2 favorites]

This is the same town where the liquor distributors bought a law that prevented wine and spirit producers from changing distributors without cause. I basically assume that everyone in the booze business who isn't bankrupt is dirty in ways I couldn't even imagine.
posted by enn at 5:13 PM on November 22, 2010

I don't mind making the drive

You're doing it wrong.
posted by Threeway Handshake at 5:14 PM on November 22, 2010

This is likely going to be a dying practice if national demand is anything to go by. In my town (Portland, OR) entering a contractual agreement to only provided big-name brands would be a death sentence for an establishment. I think this is the case in many areas of the country as the craft beer movement strengthens.
posted by bhamrick at 5:17 PM on November 22, 2010 [1 favorite]

Have they resolved the dispute?

Yeah, this all worked itself out a year or two ago. It's nice and all, but I was excited about my potential second job buying Oberon here and selling it to Chicagoans for profit.
posted by jackflaps at 5:20 PM on November 22, 2010

Great post. The book Beer School by the Brooklyn Brewery guys has some related tales of beer distribution shenanigans.
posted by exogenous at 5:27 PM on November 22, 2010

may I suggest watching the beer wars documentary for more inside poop on the beer industry?


http://beerwarsmovie.com/


it's streamable from netflix, FWIW.
posted by rampy at 5:56 PM on November 22, 2010 [2 favorites]

While we disparage distributors, it would probably be wise to leave partisan politics alone. (their wikipedia article makes them look like the most honest business alive [citation needed]).
posted by el io at 5:56 PM on November 22, 2010

So this is like the net neutrality thing, but for beer?

/me sits back, takes a pull on his Comcast IPA™
posted by hattifattener at 6:42 PM on November 22, 2010

I've never understood the whole distributor system, and it seems pretty archaic and inefficient to me.

On the other hand, if someone wants to pay or provide other benefits to a bar owner to sell a particular brand of beer -- it's had to get too worked up. This isn't exactly the Standard Oil monopoly. The good places are going to carry the good stuff (and distinguish themselves for doing so) and you can always buy premium stuff at your Whole Foods or other fancy store.
posted by Mid at 6:54 PM on November 22, 2010

Mid: easy to say if you live in some hipster urban center. Less luck to you if your live in rural or small town America.

And that beer distributor is preventing me from drinking good beer; something to get worked up about.
posted by el io at 7:16 PM on November 22, 2010

There is a story about Jimmy Wilson, of Jimmy's Woodlawn Tap in Hyde Park. Apparently, some time in the late '40s he got into a dispute with his AB distributor. It's sort of the opposite situation from these brewers, but Jimmy supposedly asked for a volume discount on Budweiser, given that he was moving a lot of product to the university kids. "Jimmy," the distributor replied, "you don't sell Bud, we sell Bud. You just carry it."

Jimmy promptly told him to "Go forth and multiply," but the distributor went ahead and had several cases sent over the next day anyway. Jimmy left the cases out on 55th, waited a few hours, then called the distributor to tell him that he should come pick up his beer, as people were starting to take it.

You can still go to Jimmy's and see a plaque with a bronze mold of Jimmy's hand giving a can of Bud the finger.

Beer and liquor distribution in Chicago is a racket, and anytime someone wants to launch anti-trust hearings, they have my slurred blessings.
posted by TheWhiteSkull at 8:01 PM on November 22, 2010 [2 favorites]

Great post. It's interesting that a lot of these brands have better distribution here in Philly, The Best Beer Drinking City in America, than they do on their home turf. Philly, the city of brutal and public corruption and arm-twisting is a craft beer mecca and though we have huge problems with the PA LCB, we don't have these kinds of problems.
posted by fixedgear at 5:11 AM on November 23, 2010

A really excellent post, thanks so much for sharing.

Though reading it, I'm clearly hanging out in the wrong (right, really) bars. This sort of thing just doesn't seem to have a ton of impact on bars that really and truly care about the microbrews they offer, who won't be swayed by the incentives thrown at them by the big distributors. In a some cases, I would think bars would suffer from having a line of the "big-name" taps as opposed to a string of micros. Call it snobbery if you must (and that's probably most accurate, to be fair) but if I walk into a bar and see tap after tap with Miller brands, I know I'm probably in the wrong place.

It sucks to see the micros I love getting boxed out of the big money places in the Loop and Wrigleyville because I want them to stay viable, but there are many, many places to enjoy these beers elsewhere in the city. Hopefully that won't diminish if this practice continues. Reading the lead article definitely will keep me out of bars who so gladly accept the kickbacks being offered by the distributors who can afford to throw them around. (Not that I was a big patron of such bars in the first place.)
posted by SpiffyRob at 7:16 AM on November 23, 2010 [1 favorite]

There was a small scandal here in Calgary a few years ago, where distributors for the majors (Labatt and Molson) plea-bargained a minor infraction where they were supplying bars and pubs with freebies for carrying the beer - naming every pub they serviced.

One of the pubs named fought this - said they never took bribes. And when they couldn't get their name taken off the case, they stopped selling products from the big 2 for a while.

It was a glorious day, and patronage - if anything - went up.
posted by sauril at 7:54 AM on November 23, 2010

Thing is, pretty well every mature industry in the US is broken like this these days. We have had a decade of refusal on the part of the governments at all levels to enforce the laws protecting consumers, and in parallel the massive growth of the megacorporations.

As long as our rule think the War on Drugs and the War on Terror are more important than anything else (and I'm looking at YOU, Mr Obama!) it's only going to get worse.

> This sort of thing just doesn't seem to have a ton of impact on bars that really and truly care about the microbrews they offer

Except that if this goes on, a lot of those microbreweries are going to close their doors because they can't live off those small bars.
posted by lupus_yonderboy at 9:40 AM on November 23, 2010

Except that if this goes on, a lot of those microbreweries are going to close their doors because they can't live off those small bars.

In theory, for sure, but I didn't get the sense, reading that article and from the comments here, that this is a particularly new practice. I can see smaller markets and ones less devoted to craft beer feeling the weight of this a bit more, but in Chicago, it seems like there are plenty of bars who care and plenty of patrons willing to stick with them. Like I said, hearing about a bar engaging in this, let alone the results (shittier beer) is a pretty ringing endorsement for me to go somewhere else.

I shared this on FB with a friend of mine who works in a Chicago-area bar (a big one) because I was curious to where they stood on this issue. A bit of redaction to protect his privacy:

This happens in Chicago for sure. Distributors are a major part of the problem, more so then the Bar owners. If you scorn a distributor they can refuse to sell you product, or limit your supply. If you cross them, they will try to ruin you. [Bar] went to war against the distributors last year and you saw a major shift in the beers we sell now. We sell to brothers, stone, bells and other micro brews now. Thankfully we are big enough to stand up to them, but most Bars are not.

True to form, I like his bar more than ever after hearing this from him.
posted by SpiffyRob at 1:36 PM on November 23, 2010

bhamrick, I only wish you were right. You live in a beer wonderland the likes of which I've never seen, and I cannot tell you how jealous it makes me. I read somewhere (don't know if it's true) that Portland, OR drinks more beer than any city in the country. Not per capita, more total. Having visited, I can believe that.

But most of the country doesn't even know what they're missing. Take a trip to Vegas sometime to see what much of the rest of the country is like. Bud and Coors everywhere, and literally only two bars I know of (one being the Yardhouse chain) make any effort to serve a variety of beers.
posted by kingjoeshmoe at 10:52 AM on November 24, 2010

TheWhiteSkull's post about Jimmy's reminds me of a similar story surrounding the Fox Head in Iowa City. Sometime in the late 1940s, the owner ran into a dispute with an A-B rep, which led to the owner's ban on selling any A-B beer. The current owner, who is the grandson(?) of the original owner, still upholds that ban.

For obvious reasons, the Fox Head's ban on allowing Hunter S. Thompson into the Fox Head, due to his causing a disturbance in the 1970s, has sadly become moot.
posted by stannate at 8:43 PM on November 24, 2010