Press Clips: Lawsuits, Handselling, and Taxes

We know your information comes largely from constant updates of our site, but in this week’s mainstream press, there’s plenty of coverage on craft beer’s history — and some forces that might affect its future:

While the overall beer industry has slightly contracted, craft beer has nearly doubled its market share in the past five years. Historically, however, craft hasn’t always thrived, according to a CNN story.

“The first decade [after opening] was very tough,” Mike Stevens, co-creator of Founders Brewery, said in the story. “You had to be distributors to carry your beer and hand-sell to one retailer at a time.”

And while those days are long gone for many brewers, that doesn’t justify tax evasion. At least, that’s what authorities are telling Yuengling, the oldest independent brewer in the country. Last week, the City of Philadelphia slapped the Pottsville, Pa. based-brewery with a lawsuit.

According to a CBS News story, the city filed a lawsuit on Jan. 30, claiming that Yuengling owes $6.6 million in business-related taxes, fees and penalties since December 2008. Brewery president Dick Yuengling told Chris Stigall of Talk Radio 1210-AM that he had not yet seen the suit, but that he thought the city was “cherry-picking,” according to the Philadelphia Daily News.

Yuengling isn’t the only brewery focusing on matters legal. As previously reported, the U.S. Department of Justice filed a lawsuit aiming to block Anheuser-Busch InBev’s acquisition of Mexican brewer Grupo Modelo.

A story by Steven Pearlstein of The Washington Post argues that if A-B InBev challenges the lawsuit, as many expect, the acquisition could worsen an already significant duopoly in the beer industry.

“Indeed, what ABI would have achieved with Modelo is the market nirvana that corporate executives have dreamed about forever — the appearance of competition without any real competition,” Pearlstein wrote.

Also covering the lawsuit, The Huffington Post cited an internal document from A-B InBev that packs a rather villainous tone. Pulled from the DOJ’s files on the megabrewer, it includes this little chestnut:

“We must slow the volume trend of High End Segment and cannot let the industry transform.”

No wonder coverage of the suit is starting to ponder the role the purchase might have on craft fortunes.

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