Breweries

Kirin Beer of Japan, recently bought a sizable portion of San Miguel, one of the Philippines most popular brands.

Beverage World has the whole story.

The Brewers Association, which tabulates industry growth data for U.S. breweries, announced that today’s small independent craft brewers are gaining alcohol market share due to a shift toward full flavor beer and increased support for local breweries. From 2007 to 2008, estimated sales by craft brewers were up 5.8 percent by volume and 10.5 percent in dollars. Overall share of the beer category from craft brewers was 4.0 percent of production and 6.3 percent of retail sales. More than 1 million new barrels of beer were sold in 2008, and close to half of those barrels were beer from craft brewers.

“2008 was a historic year for beer with the large brewers consolidating and imports losing share, while the top ten selling beer brands dropped in sales. At the same time, small independent craft brewers continued to gain share and attention,” said Paul Gatza, Director of the Brewers Association.

With total U.S. beer being more than a $100 billion industry, the Brewers Association estimates the actual dollar sales from craft brewers in 2008 were $6.34 billion, up from $5.74 billion in 2007. Taxable barrels of the total beer category was 1,210,018 more in 2008 with craft brewers producing 473,364 of those barrels. Total craft brewer barrels for 2008 was 8,596,971, up from 8,123,607 barrels in 2007.

Beer’s popularity as America’s favorite fermented beverage continued in 2008 with Gallup stating “beer is back to a double-digit lead over wine.” Taking into account the challenges in today’s economy, BevincoNielsen released a survey showing beer was faring better than spirits, with wine lagging. The Brewers Association emphasized trading across from wine and spirits to beer continues, with some of today’s wine drinkers discovering the affordable enjoyment and rewards of craft beer.

The Beer Institute and the Brewers Association today applauded members of the United States House of Representatives for the introduction of H.R. 836 the Brewers Excise and Economic Relief (BEER) Act, which effectively returns the federal beer excise tax back to its pre-1991 level of $9 per barrel.

“There is strong, industry-wide support for this legislation, and we thank Congress for its bipartisan effort to institute tax fairness for one of the most productive sectors of the American economy,” said Tom Long, President and Chief Commercial Officer of MillerCoors, and Chairman of the Beer Institute. “We commend Reps. Earl Pomeroy (D-ND) and Tom Latham (R-IA) for their leadership on this important issue, and we urge Congress to help provide relief to low- and middle-income families and businesses in America’s brewing community by passing this legislation as quickly as possible.”

Today, there are over 2,053 brewing companies in the United States operated by national brewers, regional brewers, regional craft brewers, microbrewers, and brewpubs. These job-creating businesses are in every state in the nation. In fact, a majority of Americans live within 10 miles of a brewery. In addition to reducing the tax burden on large brewers and beer importers the legislation introduced today provides specific relief to small brewers by reducing their tax burden from $7.00 to $3.50 per barrel.

“This type of tax relief can act as a stimulus to America’s small breweries,” said Rich Doyle, cofounder of Harpoon Brewery and Chairman of the Brewers Association. “While our industry has been able to remain successful in the recent past, we’ve faced raw material cost increases that have reduced our margins and severely challenged our bottom line. This measure would go a long way toward sustaining our businesses and our employees, benefiting local communities in all 50 states.”

The 1991 doubling of the federal excise tax remains the only so-called “luxury tax” still in place. All of the taxes on luxury products such as yachts and jewelry that were increased that same year have since been repealed due to the devastating consequences they had on jobs, the economy and the industries impacted. Today, more than 40 percent of the retail price of beer is comprised of various taxes, and beer taxes at all levels of government add up to more than $36 billion annually.

“At a time when the economy is struggling and manufacturing jobs are being lost, America’s brewers, beer importers and suppliers stand out as a rare positive story of local businesses committed to good-paying jobs and contributing billions of dollars in economic activity,” said Jeff Becker, President of the Beer Institute. “This relief will preserve American jobs and help breweries -large and small- remain competitive now and in the future.”

Directly and indirectly, the beer industry contributes approximately $190 billion annually to the U.S. economy and provides more than 1.7 million jobs with wages and benefits of nearly $55 billion.

“Many small breweries are family-run operations situated in small towns and communities across the country,” added Charlie Papazian, President of the Brewers Association. “These are exactly the types of small businesses that provide important local jobs and need tax relief in this struggling economy.”

Approximately 50 percent of all beer purchased in the United States is by consumers with household income of $50,000 per year or less. That means the relative impact of beer excise taxes on households in the lowest income brackets is 6.5 times greater than those with the highest incomes.

Companion legislation is expected to be introduced in the United States Senate in the coming weeks.

The Magic Hat Brewing Company & Performing Arts Center has announced sales results for the 2008 calendar year, and the numbers show that the brewer continues to perform well despite a shaky American economy and the rising prices in production costs.

Magic Hat enjoyed a 26% growth in sales in 2008, with December sales up 40% from the previous year. Debuts in several new territories, including Chicago, Milwaukee and Atlanta, as well as continued double-digit sales growth in mature markets, helped Magic Hat’s flagship beer, #9, enjoy a 14th consecutive year of double-digit growth. Sales for the not quite pale ale were up 33% in 2008.

Alan Newman, president of Magic Hat Brewing Company, commented, “Our 26% increase in depletions in 2008 is a testament to the growing demand for full-flavored craft beers, and the strength of the Magic Hat brand in this industry. We’ve gone from making kegs for a few Burlington bars to being the 12th largest brand in the country. People have really flocked to our beer, and become devoted when they do. It just goes to prove that if you put out a quality product, have fun doing it, and respect your customers as you go, the universe will deliver the rest.”

With Magic Hat’s brewery expansion nearly complete, the brewer expects to put out 165,000 barrels in 2009, a significant increase over the 127,586 barrels brewed in 2008.

Full Sail Brewing was honored by the State of Oregon for their outstanding commitment to sustainable business practices. The Brewery received the Governor’s Sustainability Award for small business. The State of Oregon, ranked the greenest state in the nation by Forbes.com and Business Facilities Magazine, presents the awards annually to innovative companies and organizations that demonstrate an exemplary commitment to sustainability.

The second annual Governor’s Sustainability Awards were recently presented by Oregon Secretary of State Bill Bradbury as part of the Oregon Business Council’s Leadership Summit. The Oregon Sustainability Board selected winners from more than 50 nominations.

“Businesses increasingly understand that sustainability benefits the bottom line in three ways,” said Bradbury, who also chairs the Oregon Sustainability Board. “First it helps the economy, second, the environment and third, our citizens.”

The judges noted that Full Sail demonstrated outstanding sustainability practices in social equity, energy and water efficiency, renewable energy, use of recycled materials, procurement of local ingredients, community involvement, and waste management.

“To be acknowledged for our sustainable business practices by Oregon, a state that has been at the forefront in its commitment to responsible business practices is an honor. For us, this sense of responsibility has been part of our core principals since we first started brewing beer over 21 years ago. Over the years we have been committed to being stewards of the environment and have remained dedicated to operating our brewery in the most responsible manner possible. As an employee owned company we share this award with our all employees who are a key part of our daily commitment to these practices. Open communication and suggestions from employees have contributed greatly to the success of managing and maintaining a socially and environmentally fair business,” said Irene Firmat, Full Sail’s Founder and CEO.

“Our brewery’s amazing location nestled between the Columbia River and the snow-capped peak of Mt. Hood, in Hood River, Oregon makes us all feel a deep connection for our surroundings. Employees are the owners at Full Sail – and because Oregon is our home – we feel empowered to run the brewery in the most responsible manner every day. As much as we are committed to brew great beers, we are also committed to our community. It would be impossible to live and work in the Columbia River Gorge and not be inspired by the sheer beauty of the place. It is the blue skies, green forests, snow-capped mountains and pristine rivers surrounding us that insure our dedication,” added Jamie Emmerson, Full Sail’s Executive Brewmaster.

Some of the company’s sustainability measures include:

• Efficient brewhouse: The brewery is as sustainable and efficient as possible, starting with the parts of the building that were reclaimed and recycled when the brewery first opened in the old Diamond Fruit cannery. The company utilizes energy measures such as energy-efficient lighting and air compressors, and compresses the work week into four very productive days, which helps reduce water and energy consumption by 20 percent.
• Sustainable brew process: Pure water literally flows from the peaks that surround the brewery, so Full Sail takes care to conserve this precious resource. While average breweries consume six to eight gallons of water for every gallon of beer produced, Full Sail has reduced its consumption to a mere 3.45 gallons, and operates its own on-site wastewater treatment facility. Local farms supply the other essential ingredients for award-winning brews: 85 percent of hops and 95 percent of barley come straight from Northwest farms.
• Reduce-Reuse-Recycle: Full Sail uses 100% recycled paperboard on all its packaging (and was one of the first in the industry to commit to long-term purchasing of recycled paper products). Everything from office paper to glass to stretch wrap to wooden pallets is recycled. Even dairy cows are beneficiaries of brewery waste: 4,160 tons of spent grain and 1,248 tons of spent yeast are sent back to farmers every year to use as feed for cows.
• Community-wide practices: Full Sail purchases 140 blocks of Pacific Power Blue Sky renewable energy per month. This practice results in the reduction of 168 tons of carbon dioxide emissions, the equivalent of planting 33,000 trees. Full Sail also supports over 300 events and charities each year, with a focus on those in Oregon. Employees at the company have inspired environmental change among other businesses in the Hood River area as well. Full Sail was a founding member of the Hood River Chamber of Commerce’s Green Smart program, an initiative that helps businesses and organizations within the Hood River watershed increase their productivity and profitability by improving resource efficiency and by reducing waste and pollution.

Earlier this year, Full Sail was honored with a BEST (Businesses for an Environmental Sustainable Tomorrow) award by The City of Portland Office of Sustainable Development for their energy-efficient and renewable energy technologies and for demonstrating a commitment to responsible business practices and innovation in sustainability. In addition the company’s Portland Riverplace Brewery and offices received recognition as a RecycleWorks business for its excellent track record of recycling, reducing waste and buying environmentally preferable products.

The EU’s Court of First Instance ruled yesterday that in prior rulings, the European Trademark Agency had “made several errors,” when they went against Budejovicky Budvar and accepted Anheuser-Busch’s arguments over trademark issues in Europe between the two rival breweries. This effectively undoes the trademark for A-B’s “Bud” brand name in the EU’s 27 member nations.

According to the AP report, the upshot is that “Anheuser-Busch can no longer claim trademark rights for the entire EU region but must rely on separate national trademarks.”

From the AP Article:

The Czech company said it had already registered “Bud” under a 1958 agreement which protected the name as a geographical indicator of origin in France, Austria and the former Czechoslovakia.

The court ruled the trademark agency had to “take account of earlier rights” protected in member states, adding the agency had “made an error of law” in rejecting the use of the word and signs in the context of a commercial activity.

There were actually three separate judgments rendered today by the Court of First Instance over different aspects if this on-going dispute. If appealed, the case will go to the European Court of Justice.

The rulings, while each is distinct, all follow similar language, as follows.

Judgment T-225/06 BudÄ›jovický Budvar v OHMI – Anheuser-Busch (BUD) Intellectual property

Community trade mark – Action, brought by the proprietor of the right to use the protected appellation of origin ‘BUD’ to designate beer, for the annulment of Decision R 234-2005-2 of the Second Board of Appeal of the Office for Harmonisation in the Internal Market (OHIM) of 14 June 2006 dismissing the appeal against the decision of the Opposition Division which refused the opposition filed by the applicant against the application for registration of the word mark ‘BUD’ in respect of goods in Classes 32 and 33

Forbes has additional analysis on the ruling entitled AB Inbev suffers a setback in its attempt to win Europe-wide rights to the trademark the name ‘Bud.’

Their take:

Czech beer maker Budejovicky Budvar won its attempt to ban AB InBev’s application for a community trademark that would have given the Belgian brewer the exclusive right to use the word “Bud” on its beers across all 27 member states of the European Union. A firm cannot acquire region-wide rights if another company holds a separate national trademark, even if it is just in one of the states.

Budvar had used what is referred to as “appellation of origin”–used to protect a name on the basis of geographical origin–to claim trademark rights in several countries such as France and Austria. Budejovicky Budvar was founded in 1895 in the Czech city of Ceske Budejovice—an area called “Budweis” by the German-speaking people that lived there at the time, according to the Associated Press. The founders of Anheuser-Busch had thus originally picked the name “Budweiser” because it was well-known in their German homeland.

An Appeal by A-B InBev is likely, so I don’t think we’ve heard the last of this dispute, which so far is more than 100 years old.