More regulation, please!
You have to give it to him, in the fine art of psychological warfare AB-InBev’s CEO Carlos Brito is a pro. Last year, at an analyst meeting, his executives reportedly thought aloud that their U.S. unit Anheuser-Busch (A-B) could sell half of its volume directly to retailers. Hang on, how would that square with the Three Tier System? Wholesalers have been a crucial part of the beer-selling process in the U.S. since the end of Prohibition in 1933. After repeal, states generally required brewers to sell to distributors. Never mind if Mr Brito can really pull this one off. But the remark has had the desired effect: beer wholesalers have been up in arms, sensing their state-mandated monopoly is under attack. While Three Tier opponents are making antitrust challenges, calling the wholesaler tier a license to print money, wholesalers insist that they primarily serve the public good and have called upon legislators for greater protection. The protracted legal and political battles over beer distribution with their undercurrents of power, money and protectionism only underline that what started out as a social model has turned into such a successful business model that it is rousing the jealousy of the first and third tier.
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