Companies sometimes do the most curious things.
I understand a company seeks to gain a commercial advantage by investing in some subterfuge or stratagem or wangle or even theft; that sometimes works quite well and may work well for some time. Often as not, however, the wangle causes embarrassment and even considerable pain.
In this I’m thinking of the recent suit that Apple won over Samsung for infringement of patents; Samsung must pay Apple $1 billion, plus, I suppose, they must stop using those Apple patents they infringed. But I think the greater harm is to reputation, as such things often are. Samsung now stands revealed as a shirker and a thief rather than a creator and an innovator of new technology. From which company would you prefer to buy a “smart” something?
There are way too many examples of dissembling corporations to bother with a list, but one story recently came to my notice from a region of the world that I associate with rough-and-ready honesty and from an industry that I think has a more sure moral compass than most — I speak of Australia and the brewing industry.
Turns out that one of the two major Australian brewers, Carlton United Beverages (known as CUB), maker of Australia’s best-selling beer Victoria Bitter, has engaged in a little wangle that came back to bite. CUB is a wholly owned subsidiary of SAB-Miller Brewing Company now headquartered in London. The wangle involved a small brewery. The story has some resonance in the USA because we also have large and small brewers who could — and, in fact, do — run into the same conflict.
Byron Bay is a tiny coastal community nearly 500 miles north of Sydney and 100 miles south of Brisbane in the extreme northeast corner of New South Wales. But there, believe it or not, is a small craft brewery that makes a spectacularly good beer; it’s served on tap to the local patrons and is called, simply, Byron Bay Pale Lager.
CUB in perfectly legal ways has established a licensing agreement with Byron Bay Brewing Company to make their Pale Lager and bring it to market in bottles. The package presentation is complete with a splendid label that features the iconic Byron Bay lighthouse that marks the most easterly point in Australia. The label also carries a silhouette of a surfer with his board on bicycle; I don’t doubt that surfing and bicycling are the main activities in Byron Bay.
Here is the problem: The label is deliberately misleading. In Australia, where being small is all the rage, such fraud has become endemic with many companies and products. The label implies that the beer is made in the tiny Byron Bay Brewery when, in fact, it is made in one of Australia’s largest breweries and many, many miles from Byron Bay, its lighthouse, surfers, bicycles and even miles from the ocean.
The label states that the beer is “brewed in NSW by the Byron Bay Brewing Company and its licensees” along with a paean to Byron Bay and its charming environs. The Australian Competition and Consumer Commission found this misleading for the consumer and found it to be an anti-competitive “cloaking device”; by making large companies look small it is more difficult for small companies to become established and survive.
The fine levied does not do justice to a slap on the hand: merely a tummy tickle of $20,000. But the label had to be redone to new standards and, of course, CUB looks foolish trying to masquerade as something it is not.
The classic examples of a similar thing in this country are the Shock Top range of beers made ostensibly by the brewery of that name that, if it exists at all, exists on paper only; Shock Top is an Anheuser-Busch-Inbev product. This is not mentioned on the Shock Top website.
Similarly, the very successful Blue Moon beers made at the Blue Moon Brewery in Golden, Colorado, are, of course, made by Miller-Coors. Some call these crafty beers.
Anheuser-Busch-Inbev also owns the Goose Island Brewing Company in Chicago; they bought it for $38 million in 2011. As with Byron Bay beer, production of several brands, mainly 312 Urban Wheat Ale, was moved from the Goose Island facilities to the large ABI breweries in Fort Collins, Colorado, and Baldwinsville, New York. This may seem to be a wangle and, if you believe craft beer can only be made in a craft brewery, it is.
The association has nevertheless proved very beneficial in many ways: The beers are now available without stint in many more markets, benefiting consumers with greater consistency and equal quality; deep corporate pockets and vast technical knowledge is of great benefit for expansion and improvement of craft facilities, and, by moving routine production of the biggest brands to large breweries, space and time is freed for making the unusual specialty beers, particularly bourbon barrel-aged beers, that Goose Island invented and continues to explore and that consumers call for.
There are so many odd ways that craft beer is made and brought to market in this country that I cannot see our regulators taking much interest any time soon. For example, much beer is made and sold by brewing companies that own no brewing facilities at all, such as our local Ruhstallers brand, but make their beer by contract arrangements with other brewers. It would not be difficult to require that the brewery of manufacture be identified on the label but, if the beer’s good, do we really care?
Some people care. Because they are now a part of ABI, Goose Island Brewing Company is no longer listed by the Brewers Association as a craft brewery; frankly, I don’t think consumers nor the company mind all that much.
— Reach Michael Lewis at [email protected] Comment on this column at www.davisenterprise.com