{"id":3596,"date":"2016-08-30T06:00:05","date_gmt":"2016-08-30T11:00:05","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=3596"},"modified":"2016-08-28T18:32:42","modified_gmt":"2016-08-28T23:32:42","slug":"success-is-a-lousy-teacher-it-seduces-smart-people-into-thinking-they-cant-lose","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=3596","title":{"rendered":"Success is a lousy teacher. It seduces smart people into thinking they can’t lose…."},"content":{"rendered":"

\"liveoaklogomain\"<\/a>\u00a0Last week\u2019s post,\u00a0\u201cSuccess is How High You Bounce When You Hit the Ground<\/em>,\u201d<\/em> brought more responses from readers than normal. \u00a0In fact, comments came from all levels of the beer industry, including both large and small companies. \u00a0There were two topics in the post, but all the comments were directed at the difficulty vendors are having when negotiating contracts with wholesalers.<\/p>\n

It was surprising that one response came from a large craft brewery, despite that fact that this same brewery has, in the past, noted difficulty when negotiating contracts for new wholesale appointees? \u00a0Their solution:\u00a0 that the NBWA needs to lead<\/em>, and if they do not, the crafts will continue to legislatively attack franchise laws.<\/p>\n

Last week\u2019s topic is a perfect example of the NBWA\u2019s inability to lead. \u00a0Three Texas brewers:\u00a0 Live Oak, Peticolas, and Revolver, sued the state to overturn a 2013 statute which prohibited brewers from selling their distribution rights. Wholesalers retained such rights, however, the brewers did not.<\/p>\n

District Court Judge Karlin Crump sided with the brewers in this lawsuit. \u00a0The ruling stated that the government had no compelling state interest in restricting the ability of brewers to be paid for their distribution rights. \u00a0Matt Miller, an attorney with the Institute for Justice representing the brewers noted, “The Texas Constitution prohibits the legislature from passing laws that enrich one business at the expense of another.” \u00a0Miller further stated, “This ruling is a victory for every Texas craft brewery and the customers who love their beer.”\u00a0 The state has 30 days to appeal, and more than likely, the Wholesale Beer Distributors of Texas is working with their legislators to ensure the state appeals this ruling.<\/p>\n

Now the question is, how will this ruling affect vendor-wholesaler relationships going forward? \u00a0Small or new craft breweries will probably have little to no leverage without any history of sales, yet they will still have the ability to self-distribute. \u00a0One would predict that if the start-up crafts did get some traction, that the wholesalers would, in turn, become aggressive.<\/p>\n

After last week\u2019s ruling, the more established or larger breweries, like the three who sued, should be in a stronger negotiating position. \u00a0Of course, once a price is determined, a contract needs to be executed.\u00a0 Now the vendor is in a more neutral position to get a contract whose language reflects a vendor-favorable agreement instead of being behind the eight-ball with the wholesaler.<\/p>\n

Finally, the most interesting situation to watch will be how wholesalers approaches the handful of super craft brewery start-ups.\u00a0 One such brewery is Wild Acre in Ft. Worth, a brewery that spends millions on state of the art equipment, hires experienced beer executives, and has retained a highly acclaimed brew master with a capacity of 20K+ bbls. \u00a0Breweries like Wild Acre will be successful. But how aggressive will the wholesalers be in trying to get the distribution rights of these super crafts?<\/p>\n

Whatever happens going forward, it is safe to say that this overturned statute in Texas is just the beginning. \u00a0There will be more and more attempts to change what many vendors feel are the barriers erected to prevent them from getting their beer to market. \u00a0This will happen. \u00a0Success is a lousy teacher; it seduces smart people into thinking they can’t lose…<\/p>\n

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\u00a0Last week\u2019s post,\u00a0\u201cSuccess is How High You Bounce When You Hit the Ground,\u201d brought more responses from readers than normal. \u00a0In fact, comments came from all levels of the beer industry, including both large and small companies. \u00a0There were two topics in the post, but all the comments were directed at the difficulty vendors are […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_s2mail":"yes","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2xRTi-W0","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3596"}],"collection":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3596"}],"version-history":[{"count":12,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3596\/revisions"}],"predecessor-version":[{"id":3609,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3596\/revisions\/3609"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}