In this post last Thursday, I reported on a story in Beer Business Daily about wholesalers having too much A-B inventory, some of them even refusing shipments. There’s more on the topic in today’s BBD, including the very cynical comment of an anonymous brewer who thinks the situation is all part of a sinister plan…
One source with knowledge of the numbers within A-B said that inventories really aren’t out of whack with previous years, and conjectured that perhaps the reason distributors have less space is because the new brands they’ve taken on have eaten up warehouse space. Also, A-B itself has introduced a lot of new SKUs which take up horizontal space instead of stacking three pallets high of Bud Light 24 packs. However, the mix of distributors we’ve spoken with — while some have taken on new brands — others haven’t. Still, one prominent wholesaler claimed he had 45 days of Bud Light suitcases on the floor. 45 days. Wow.
A competing brewer we heard from who wished to remain anonymous, turned that logic on its head, saying:
“As all wholesalers continue to expand their portfolios it is inevitable that most ABI houses will continue to pick up non-ABI brands. Since ABI can’t stop their wholesalers from obtaining the licensing rights to other brands the best thing they can do is overwhelm them with ABI inventory. This accomplishes two things. One, it eats up space in the warehouse forcing the wholesaler to control what it can control and cut inventory levels from other suppliers which leads to recurring OOS situations in the market and less competition at retail for ABI. That also makes it easy to say to Mr. Retailer ‘those guys can’t keep their product on your shelves, why keep them in your store?’ Two, it takes the wholesaler focus away from competing brands as they struggle to find ways to get all that ABI product to market before running into code date issues.”
When I presented this view to a few A-B wholesalers, a few believed it, but one said, “that’s bullshit.” So the feelings are mixed.
And in Texas, where refusing shipments is legal, we’ve heard that there’s several wholesalers fighting back by refusing beer. “We honestly don’t have any place to put it,” cries one. “We have 40 days on the floor.” And this is one distributor that hasn’t taken on any companion brands.
For its part, Anheuser-Busch told BBD that inventories are actually in line with previous years, save a few packages.
I’ll only add that, when it doubt, I always go with the cynical explanation. That suggestion in the first sentence about all those horrible new brands eating up space is exactly the picture that A-B has been trying to paint for its wholesalers over the last few months.SHARE