One more thing…
Well actually a couple more… had a lot of responses to the last post. In no specific order:
1. Exit values – without franchise laws exit values will plummet. No question about it. It will probably end the exodus of beer wholesalers from the industry. Wholesalers will make their money from operations, not a big payday as they head out the door.
2. IMHO, equating franchise laws and the 3-tier system is a strategic mistake. As a factual matter they are not the same and one does not imply or require the other. It makes our defense of the 3-tier system look entirely (largely?) self-serving.
3. Beer wholesalers (and the wine and spirits folks too) are the last line of defense for the 3-tier system. If not you all, who? The gold rush mentality of the craft brewers isn’t going to change. And neither is their self-serving belief that no “antiquated” rules should apply to them. They will gladly tear the guts out of the 3-tier system. I have no doubt they will cry when the results of their rampage comes back to haunt them. And it will decimate them. But by then it will be done. No one will be putting this genie back in the bottle again.
Chain retail, especially off-premise, has been fighting to get rid of the 3-tier system for years. They will gladly go along. All of us who work the street know what will happen to the craft folks when this happens. And they think getting distribution is difficult now! Wait… fools. On-premise accounts can be had for the price of a draught system. They aren’t even bringing a knife (or even a spork) to a gun fight. They are self-important toddlers walking into an MMA cage. Fools.
The larger brewers can live quite nicely without the 3-tier system. I don’t see them getting involved in the fight, they’ll just let it happen and execute their strategies on whatever future happens along.
Let me repeat… wholesalers are the last line of defense for the 3-tier system. NO ONE else is going to fight for it. No one. And the compromises being offered to the prettiest girl at the dance only moves the ball in the direction of its destruction. I know you’d all rather not mess with franchise protection. It will crush exit values and perhaps put your businesses at risk from the big 2. Not a great situation, but you have to analyze it versus the other possibilities.
Perhaps franchise laws made sense in a world of 80 brewers… but they sure don’t seem to be compatible in a world with thousands of brewers.
But not to worry… I have absolute confidence of the following…
The craft folks will continue to be completely self-serving. In the end they will see the foolishness of their moves, but by then it will be too late… and of course some will make big $$ before that happens. THAT hope is solely what is driving their actions.
The big 2 will pay lip service to the 3-tier system but basically sit out the fight (and that’s what I’d do too)
Chains will look out for what they perceive is in their best interests… and this is basically anti-3-tier… ah, the dream of direct shipping. Oh, and brewers are going to happily pay wholesalers money for not doing anything once this happens… yea, right.
NBWA will look out for the folks that run NBWA… remember it is just a good paying job for them. One that they’d like to keep.
Beer wholesalers will fight to the death to keep franchise protection. Put those all in the hopper and what comes out is effectively the end of the 3-tier system. Perhaps sooner than most expect. So don’t worry. All will be well ;-)