To America's Craft Brewers, Samuel Adams Is Big. Too Big.
Wednesday, May 20, 2009
When America's craft brewers gathered in Boston last month for their annual conference and trade show, Boston Beer Co. founder Jim Koch feted them with a clambake at his brewery. Whole lobsters were plopped onto serving trays, and guests could choose from 30 types of beer: not just mainstays such as Samuel Adams Boston Lager, but also experimental brews not yet released to the public, including a kriek flavored with tart black Michigan cherries.
Koch's hospitality, however, won't prevent the inevitable. Perhaps as early as this year, and most likely by the end of the next, his fellow craft brewers no longer will regard him as one of their own. He'll be allowed to remain in the Brewers Association, the small-brewers' trade group, as an associate member, but his barrelage will be expunged from its statistics.
It's nothing personal.
The association defines a "craft brewery" as one that's small, independent and traditional, and "small" specifically means "annual production of beer less than 2 million barrels." Boston Beer shipped 1.992 million barrels last year.
Two million barrels, explains Paul Gatza, director of the Brewers Association, is the ceiling for the small brewers tax differential, passed by Congress in 1976. Eligible brewers pay $7 a barrel on their first 60,000 barrels as opposed to the regular $18-a-barrel fee.
Koch considers that an "arbitrary and irrelevant" criterion. "I don't think the IRS should be determining what craft beer is," he asserts.
Boston Beer meets the other conditions of being a craft brewer. It doesn't lighten its beers with corn and rice, and it isn't partly or wholly owned by an alcohol producer that isn't itself a craft brewer.
When the Brewers Association directors codified the new definition in 2006, they might not have expected the maker of Samuel Adams to graduate so quickly into the ranks of the large national brewers. Boston Beer reported an 8 percent spurt in volume last year, higher than the craft category as a whole. (The second-largest craft brewer, Sierra Nevada Brewing Co., turned out fewer than 700,000 barrels last year.)
Inasmuch as Boston Beer's output accounted for 23 percent of total U.S. craft volume in 2008, it's going to leave an awfully big hole when it gets booted. "When that day comes, you're going to see a lot of asterisks in our statistics," acknowledges Gatza.
It might also reopen a thorny debate: If the beer tastes fine, do drinkers really care whether it was mixed in a soup pot or in a vessel that could float a battleship?
A small but passionate minority apparently does care. So megabrewers such as Anheuser-Busch and Coors have released craft beer knockoffs under bucolic-sounding corporate pseudonyms. The six-pack holder for Blue Moon Belgian White, for instance, lists a fictitious "Blue Moon Brewing Company," founded in 1995, as the manufacturer. In fact, Blue Moon is a Coors brand.
In her documentary "Beer Wars," filmmaker Anat Baron goes prowling in Fairfield, Calif., for the Green Valley Brewing Co., supposed maker of organic beers Stone Creek Pale Ale and Wild Hop. She draws a blank from locals when she asks for directions. Finally, she discovers the source, pointing her camera through a chain-link fence at a looming Anheuser-Busch factory.