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Furthermorebeer Blog Motion 414--getting leveled by the playing field.
The Wisconsin government recently inserted into the state budget a motion that makes significant changes to the ways that Beer is allowed to get from the brewer to the retailer. Much of it is meant to shore up the role of the second tier, aka, the wholesaler/distributor. Unfortunately, state brewers were not invited to the table, and they are scared as to the ways their business will be impacted by the new rules of play. Super-duper unfortunate is that the likes of Furthermore Beer (see below) wasn't even considered as a living, breathing entity. The motion literally writes Furthermore Beer out of the game if we don't make some changes. Furthermore Beer will of course opt to change rather than die, so change we will. Nevertheless, its is odd that by passing the legislative process was more important than nurturing the craft brewing, an industry that has both economic legs and popular support.
What is Furthermore Beer?
As a brewer by trade, I have always consider my business to be a brewing company even though we started out lean and mean without an actual brewing facility--we use Sand Creek Brewing Company to get the job done. As it happens, the Federal Government says that if a business does not own stainless steel, then it cannot be a brewer. Instead, it must sell its product as a wholesaler. So, Furthermore Beer holds a wholesalers permit that allows us to buy our beer from our contracted producer, and then resell it to retailers or distributors as we see fit. We began doing so by self distributing our product until such a time that it was clear that more capable, established distributors could do a far better job at hauling beer around the state. Unfortunately, one aspect of Motion 414 will force the DOR to fine Furthermore Beer to the tune of $10,000, sieze profits made from doing business in what is today a lawful manner, and revoke our wholesalers permit IF we do not have 25 or more retail customers. Well, recognizing the strength of the established second tier, we gave up all of our retail accounts and now only have 5 distributors in WI to whom we sell beer. One option we do have is to sever ties with one or more distributors and take back the retail accounts. Aside from having to buy back the territorial rights at a cost greater than the DOR fine, this would force us to move in a direction that runs counter to that which the company needs to move. Paradoxically, it also undermines the intention of the motion--to limit supplier encroachment in the realm of the distributor.
Furthermore has been very grateful for the relationships it has established with its distributors, from helping us see the market through their eyes to offering their backs to actually move the beer. They have allowed us to grow in sales, and to crash on their couches. My concern with Motion 414 is not the degree to which it strengthens their position in the market, but the degree to which it could push me out.
Aran Madden
Brewer/Owner
What is Furthermore Beer?
As a brewer by trade, I have always consider my business to be a brewing company even though we started out lean and mean without an actual brewing facility--we use Sand Creek Brewing Company to get the job done. As it happens, the Federal Government says that if a business does not own stainless steel, then it cannot be a brewer. Instead, it must sell its product as a wholesaler. So, Furthermore Beer holds a wholesalers permit that allows us to buy our beer from our contracted producer, and then resell it to retailers or distributors as we see fit. We began doing so by self distributing our product until such a time that it was clear that more capable, established distributors could do a far better job at hauling beer around the state. Unfortunately, one aspect of Motion 414 will force the DOR to fine Furthermore Beer to the tune of $10,000, sieze profits made from doing business in what is today a lawful manner, and revoke our wholesalers permit IF we do not have 25 or more retail customers. Well, recognizing the strength of the established second tier, we gave up all of our retail accounts and now only have 5 distributors in WI to whom we sell beer. One option we do have is to sever ties with one or more distributors and take back the retail accounts. Aside from having to buy back the territorial rights at a cost greater than the DOR fine, this would force us to move in a direction that runs counter to that which the company needs to move. Paradoxically, it also undermines the intention of the motion--to limit supplier encroachment in the realm of the distributor.
Furthermore has been very grateful for the relationships it has established with its distributors, from helping us see the market through their eyes to offering their backs to actually move the beer. They have allowed us to grow in sales, and to crash on their couches. My concern with Motion 414 is not the degree to which it strengthens their position in the market, but the degree to which it could push me out.
Aran Madden
Brewer/Owner
Posted on 17 August 2011 | 1:48 pm
