It was in the mid 1960s that Coors decided to expand into North Texas which made Coors available in 10 states and a portion of Texas. Ten years later, they expanded into the remainder of Texas. At the time, Coors was so popular that people would drive miles out of their way to pick up cases of the beer if it was not available in their home markets.
During those years I was running the Coors operations in San Antonio and Wichita and it seemed like not a week went by that I was not contacted by someone, including other beer distributors back east, wanting to buy a trailer-load of Coors. Most offers to purchase the product were at PTR paid by cash or cashier’s check. Obviously this was strictly prohibited by the brewery because each case of beer was marked with a code the brewery could trace it if they found amounts in non-Coors markets. If the distributor was caught doing this, the penalty was possible termination.
There were a myriad of examples of illegal distribution of beer. There was the Schlitz distributor in Pennsylvania who filled empty Schlitz kegs with Old Milwaukee and resold them as Schlitz. He was terminated. A Coors distributor was terminated on the border after his Coors was found in Mexico along with Coors neon’s. Another Coors distributor in Kansas City sold beer in the eastern US. He, too, was terminated, and then sued Coors and won restitution; however, he was eventually forced out.
There was a long time Schlitz Division Manager, when Schlitz was still strong, who forced his District Mangers to falsify their expense reports so he could pad his expense reports. The manager would then buy US Treasury bonds with the proceeds. A practice he did for years until his retirement from the brewery. Another Schlitz executive had a gambling problem and would shake-down his staff for financial help to support his habit. I can go on with other examples but these are just the ones I know of. Think about the ones that never got out.
Just recently an AB distributor mentioned that he suspects, , based on what he and his team saw and learned while visiting a local micro-brewery, that this brewer was selling beer at his location and not reporting or paying federal taxes. I am sure this does not surprise most of us given the number of new breweries and the competition for business and handles. We can expect more of these new companies to try to look past the laws in order to develop their brands.
I have previously written that the main attraction of the beer industry has been the integrity of the people involved. Some of this can be attributed to the screening process used by the TTB and the breweries in hiring and distributor appointments. Will this integrity be upheld in the future with the craft brewers? You see, character matters: as leadership descends from character.