Last Call: California ABC Investigates Amazon; US Beer Shipments Down Again in July

Amazon’s California Alcohol Delivery Service Under Investigation

The California Department of Alcoholic Beverage Control has opened an investigation into Amazon’s Prime Now beer, wine, and spirits delivery service in the state after wine database and news outlet Wine Searcher reported possible violations of California liquor law.

According to California liquor law, alcohol delivery services are required to have brick-and-mortar stores that operate for at least half the hours of their delivery operation.

When a Wine Searcher reporter went to visit the ecommerce giant’s brick-and-mortar location at 3334 North San Fernando Road in Los Angeles, there was no storefront to be found, the website reported. The reporter claimed he could only find an “Associate’s Entrance” to Amazon Flex Delivery Partners, its private delivery service.

Wine Searcher alleged that Amazon, which was issued a liquor license in February, violated its license in several ways, including not displaying alcoholic beverages for sale, not having alcoholic beverages available for sale, and not posting store hours.

Matthew Hydar, supervising agent for the California Department of ABC, told Wine Searcher that the article sparked the ABC’s investigation. He said if the accusations were proven, the ABC could potentially strip Amazon of its liquor license until it has established a brick-and-mortar store or fine the company. Another option would be for the case to go before an administrative law judge, although Hydar said he does not expect criminal charges against the company.

Reyes Beverage Group Lays Off DBI Workers Post-Acquisition

Less than two months after acquiring DBI Beverage in Northern California, the Reyes Beverage Group announced plans to lay off 1,079 employees on September 13, according to San Francisco’s The Mercury News. However, the company plans to rehire many of those workers.

“We expect the vast majority of DBI employees to be rehired and at this time only DBI employees are eligible to apply for positions in those facilities,” a spokesman for Reyes Beverage Group told the outlet .

Read Brewbound’s coverage of the acquisition here.

US Beer Shipments Decline in July

July marked the sixth consecutive month that U.S beer companies shipped fewer barrels of beer than they did in 2018. The Beer Institute (BI), citing unofficial estimates of domestic tax paid shipments from Alcohol and Tobacco Tax and Trade Bureau (TTB), reported that shipments declined 2.5%, to 14.8 million barrels, this July.

BI chief economist Michael Uhrich attributed the declines to consumers trading up to higher priced offerings, such as hard seltzers and imports, as well as eschewing beer for wine and spirits.

“Because imports and hard seltzers tend to be more expensive, less volume is sold,” he said in an email to BI members.

Year-to-date, U.S. brewers have shipped more than 97.4 million barrels of beer, down nearly 1.7 million year-over-year. January has been the only month in 2019 in which U.S. beer companies have shipped more beer than they did in 2018.

Anheuser-Busch’s ZX Ventures Acquires Barbarian

Anheuser-Busch InBev’s growth and innovation group, ZX Ventures, has acquired Peruvian craft brewery Barbarian. Financial details were not disclosed, although ZX acquired 100% of the company’s shares, according to La Republica.

The acquisition was announced in Peru on August 13. Barbarian’s founders and collaborators will remain with the company, and ZX plans to triple Barbarian’s production by 2020, according to the outlet.

“We know that Barbarian has an incredible growth potential and that is why we have made the decision to add an important partner, which will take Barbarian to the next level,” co-founder Ignacio Schwalb said. “This partnership opens a new world full of possibilities and will give us the opportunity to look carefully at our processes and search for optimizations in order to strengthen the growth and sustainability of the brewery.”

A-B InBev also owns Peruvian brewery Backus, which was obtained as part of the MegaBrew merger with SABMiller in 2015.

Wachusett Launches Fifty Trees Hard Cider Brand

Massachusetts’ Wachusett Brewing Company is further diversifying its portfolio with the addition of a new cider brand, Fifty Trees Hard Cider. According to a press release, the cider will be available in two styles: Original, a semi-dry cider blended with European Bittersweets, and Cranberry, featuring locally sourced cranberries. Fifty Trees sources its apples from orchards in North Central Massachusetts.

“We have been making hard cider pretty consistently over the last two years,” Wachusett president Christian McMahan said in the release. “We have done a ton of experimentation over that time and are proud to finally be able to launch Fifty Trees to a wider audience.”

In addition to beer, Wachusett’s portfolio includes the Nauti hard seltzer brand.

CB Craft Brewers to Close

Citing declining sales, Rochester, New York’s CB Craft Brewers will permanently close its doors on September 1, according to the brewery’s website.

The brewery produced private label beers for 30 restaurant and bar accounts, and contract-brewed beer for nine local breweries.

“It’s just time,” CB Craft Brewer owner Mike Alcorn told the Democrat & Chronicle. “Twenty-two years is not magic to me. I started in a whole different world. I had a goal that has been achieved years ago, to get beer to be commonplace in the Rochester area and western New York. There was very little craft beer when I arrived here.”

Empire Farmstead Brewery Files for Bankruptcy

New York’s Empire Farmstead Brewery and affiliate Empire Brewing Properties filed for Chapter 11 protection in the Northern District of New York’s Bankruptcy Court earlier this week, according to court records. News of the filing follows a July asset purchase agreement reached by the distressed brewing company and Wisconsin’s Burnett Dairy Cooperative for $3.25 million.

Empire, which opened in June 2016, attributed the bankruptcy filing to delays and high costs during the brewery’s construction, as well as a 2016 wild yeast infection that caused the brewery to “pull back” all bottled beer from distribution.

According to court records, the filing is to “to ensure the ongoing operations of the businesses so that they may be sold as going concerns, to market the Debtors’ assets for sale as going concerns through a competitive bidding process, and to address the Debtors’ financial difficulties for the benefit of their respective creditors.”

In 2017, Empire began working with Community Bank in an effort to sell the brewery or refinance its debt.

MillerCoors Launches New Blue Moon Campaign

MillerCoors has launched a new Blue Moon advertising campaign aimed at engaging new consumers and highlighting new drinking occasions, according to the MillerCoors blog. The new campaign, comprised of TV spots, and outdoor, digital and social ads, launched this week.

One spot aimed at female beer drinkers features a woman experiencing “once in a blue moon” events, such as seeing a double rainbow or tightrope walker, and grabbing a bottle of Blue Moon, both alone and with friends after work. Another ad focuses on drinking Blue Moon on draft in bars and restaurants.

“Once in a Blue Moon experiences should happen more than once in a blue moon, and we’re trying to show Blue Moon drinkers that they can enjoy something special almost any night of the week,” Bryan Ferschinger, VP of above-premium brands for MillerCoors, told the blog.

The commercials began airing nationally this week across 25 TV networks.

Ceria Beverage Starts Tastemaker Video Series

THC-infused, non-alcoholic beer maker Ceria Brewing has launched a video series called “Tastemakers,” highlighting “creative pioneers” providing “insight into their craft and culture,” according to a trailer on the brewer’s YouTube channel. Featured Tastemakers include Blue Moon creator and Ceria co-founder Keith Villa, “Top Chef” winner Hosea Rosenberg and hip-hop producer Ru Johnson, among others.

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