Some of the larger micro-breweries, that are in fact since a couple of years "macro" brewers, are dumping their beer on some US-markets at prices of $ 2.99 or $ 3.99 per six-pack. Pete's is one example, but others like Sam Adams have to follow.

In stead of upgrading the market, these brewers are now competing on the lower end of the market with the three giants. The main reason is that these smaller "so-called brewers" are in fact marketing organizations, that let their beer be brewed by others, so-called contract-brewers. In the contract-brewing business, the contractors have to order, to contract the brewing of volumes of beer months before the beer will go on the market. Every miss calculation, every miss estimation of the market demand hurts very hard.

That is what happened at the end of last year. On the market are now available millions of cases of these beers without demand for it. Since their type of beer is "dead"-beer, that spoils when not consumed within a 6 month time-frame, the only remedy to recapture some of the costs is to dump the beer at unheard of prices.

The down-side of this practice is that it hurts the smaller real micro brewers. Their honest premium products are pushed from the shelves, and the interest of investors for micro-breweries got a blow recently. The wholesalers and the retailers get overstocked. The consumers may end up with old dead beer. All factors that risk to hurt the whole craft-beer business.

The three giants in the US-beer business just have to turn around or sit down, like elephants, and the new would be macro-brewers are crushed. And that's what is going to happen.

(Newsletter May 1997)