Monday, January 22, 2007

Distributors good ... sometimes not

Distributors ...

As a representative for a brewery, I find most distributors to be integral to our company's success. The brewery I work for - Clipper City - could not successfully sell its beers along the eastern seaboard without a network of creative distributors. Each wholesaler performs as an extended sales force for the brands of our brewery.

However, just as in anything, there is good and there is bad. Jump to a story about the dark side and about brewery bravery in the face of it. Larry Bell pulled his Bells beers out of Illinois, one fo the largest markets in the US, because of differences of opinion with the distributor (Reyes) that had purchased his original wholesaler.

UPDATE from Wall Street Journal, 10 December 2007:

Last fall, Larry Bell yanked the beers made by his small Michigan brewer out of Chicago, where they enjoyed a loyal following, rather than see the rights to market them there sold to another distributor. He was worried that his specialty beers would get lost among the distributor's mass-market brands....Last week, Mr. Bell quietly re-entered the Illinois market with a new brand [Kalamazoo Royal Amber Ale], even though he fully expects to be sued by his former distributor.

Post-Prohibition, state regulations generally established a three-tier system that separated alcohol manufacturers (e.g., breweries) from wholesalers and from retailers (e.g., stores, pubs). But many states, such as Illinois (where Bell had his issues) and Maryland and Virginia in Clipper City's home territory, have also enacted 'franchise' laws, which hold the parties in perpetuity to their contracts.

As a disclaimer, I must say that my opinions are not necessarily those of my employer, Clipper City Brewing.

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