Reinforcing the 3-Tier System

Tomorrow (Wednesday March 4th, 2015) the Kentucky Senate will vote on HB168. House Bill 168 will redefine the requirements for owning an alcohol distributor in the state of Kentucky. The Kentucky house approved it last week. The Senate’s vote is the last step before the Governor signing the bill into law.

3-Tier System?

In brief, a distributor is a company that buys beer from the brewery, stores it and employs sales people to convince retailers to sell the beer. Distributors form a part of the 3-tier system. For a full background on the 3-Tier system please see my series from 2013 beginning with my introduction.

Two extremely different companies are very upset about this legislation. I’d like to help clear the air and share my opinion on the situation. The two companies are AB-InBev and Rhinegeist, the elephant in the room and the mouse the elephant is afraid of.

AB-InBev owns a distributor in Louisville and last year they bought a distributor in Owensboro. The purchase of that distributor in Owensboro is what set all this off.  Currently any brewery in Kentucky is unable to own a distributor in Kentucky, but out of state breweries can. 1That is exactly what this law is going to change. Anyone who owns a brewery will be unable to own a distributor in Kentucky, which is where Rhinegeist comes in.

Rhinegeist has used Ohio’s laws that allow a brewery to self-distribute their beer to do exactly that. Yes, self-distribution laws are a relaxing breaking of the 3-tier system, turning it into a 2-tier system. The way people argue for self-distribution is that Rhinegeist can only self-distribute Rhinegeist. When Rhinegeist decided to expand to Kentucky they couldn’t find a distributor “with the right craft-focus and a small enough portfolio to ensure our mindshare.” to quote Rhinegeist owner’s Bryant Goulding and Bob Bonder’s op-ed in The Courier-Journal. As a result, they decided to open Riverghost Distributing to carry Rhinegeist products and other breweries products, in the state of Kentucky. Now we see why Rhinegeist is siding with AB-InBev. Both AB-InBev and Rhinegeist will have to sell, or close, their distributors in the state of Kentucky if this law passes.

Sorry, Rhinegeist but that’s a GOOD thing

Good thing from my point of view. It’s a bad thing for the owners of Rhinegeist because this means someone else gets a cut of their profit. As it stands now Rhinegeist makes more per beer sold than MadTree does2. Rhinegeist also pays a number of sales people and delivery drivers. Plus they maintain a fleet of vans to enable them to self-distribute. Most breweries have distributors take care of that overhead. So, Rhinegeist losing Riverghost will mean lower profits per beer in Kentucky for the folks at the top. The same on all that goes for the AB-InBev owned distributors as well.

This is a good thing for everyone except these two companies. If Riverghost starts carrying other brands and there comes a day where one store only has one spot available on the shelf, who gets that spot? I have an extremely hard time believing that that spot will be fairly assigned to the product most sought after in that market. That spot will be assigned to Budweiser or Truth.

My biggest problem is that this is a slippery slope that could lead to decreased competition and eventual vertical integration. If a distributor or store is owned by a brewery there is far less reason for that distributor or store to care about other breweries products. Same goes for a distributor owning a store or bar. Why should they push someone else’s product when the folks at the top can make more money pushing the products of the brewery they own?

Part of what has allowed craft beer to explode is the separation of the 3 tiers. Sure, it’s not great but it’s the best we got for now and getting read of, or blurring the lines between, the tiers is not going to help anything. One of the reasons England’s craft beer explosion has been more muted than ours is because of tied houses, where a brewery owns a bar. As I said before, when one tier owns another it lowers the competition. The tied houses in England only serve the beer of the brewery that owns them, unless customer demand for other products reaches an extreme point.

This Will Cost Jobs

Both AB-InBev and Rhinegeist have said that the passage of this bill will cost jobs. That’s only true if AB-InBev and Rhinegeist decide to shut down their distribution companies. They’ve both proven that there is a strong need for these distribution companies to exist. They’re both savvy businesses as well. They’re not just going to dump all the money they’ve invested in this. No jobs will be lost. The only thing that will change is who is at the top of these 3 distributors and that the 3-tier system will be more reinforced in the state of Kentucky.


  1. Thanks to Ryan Phillips for clearing that up for me

  2. MadTree is distributed in Ohio by Cavalier & Kentucky by Beer House

Book Review: Brewing Porters & Stouts

Brewing Porters and Stouts

Brewing Porters & Stouts: Origins, History, and 60 Recipes for Brewing Them at Home Today is a new book out by Terry Foster offering and in-depth look at porters and stouts. Like my last book review, of Farmhouse Ales, this book offers a very thorough look in a very narrow field. While the book does talk a fair bit about stouts it’s got a stronger tilt toward porters. Still, if you’re a lover of porters or stouts it’s worth reading, especially if you want to master brewing them at home.

The book starts by wading into the murky history of porters. It covers the common tale of a bar blending three ales together and that being enjoyed by a group of people who carried goods around London, those people being known as porters. What this section really covers is the slow, continual, development of a number of technologies that allowed creating stronger and darker beers. Unfortunately, the author does fall into the common trap of paragraphs full of “X brewery produced # barrels in year.

The following is a complaint about many books involving brewing history: I don’t know why so many books do this when covering beer history, but it gets tedious to read. It doesn’t really add much to the overall story of porter/stout development but does show, somewhat, the extent to which breweries were making these beers. I really don’t enjoy reading these paragraphs of facts. But enough of that rant, back to this book.

Now we move into a breakdown of the plethora of sub-categories of the porter and stout styles. Flavor, aroma, malt bills, ABV, original gravity, and commercial examples are available for every style. Something interesting Brewing Porters & Stouts does that I haven’t seen before is the IBU/OG ratio. Instead of saying exactly how many IBUs a style should have it lists the number of IBUs in relation to the OG. So if you have a starting gravity (aka original gravity, hence OG) of 1.040 and an IBU/OG ratio of .5 then you should have an International Bitterness Unit (IBU) level of 20 IBUs. Why the author doesn’t just come out and say 20 IBUs I’m not exactly sure of, but it’s still a cool system.

Now we get to the real meat of the book. However, this is where anyone who doesn’t brew yet will lose interest. From here on out it’s all about bringing these beers to life. Beginning with wide coverage of the different malt varieties used in porters and stouts, along with what flavor and color contributions they add plus what percentage of the grist they represent. While the malt coverage is great the hops, water, yeast, and finings coverage is as basic as the first few pages of any introductory homebrewing book. If the malt section was wide then the recipe section is massive. 63 pages of recipes for every kind of porter and stout imaginable. Sure, all you need to do to find a homebrew recipe is spend 10 seconds Googling but this book provides a repository of recipes that is nice to have on hand.

FULL DISCLOSURE: I reached out to the publisher who was kind enough to hook me up with a free copy. To our readers, and any companies interested in sending me stuff, giving me free stuff impacts the review in only 2 ways. That I will do my best to review it in a timely fashion and that and I will write a blog post about that review. Giving me free stuff does not guarantee you a favorable review or that I will tell everyone to go buy it.

Tom’s Top Picks for Cincy Beer Week

2015’s Cincinnati Beer Week officially kicks off on the 13th with Cincy Winter Beer Fest and runs through to the 22nd. I’m not going to post about each one of the events happening, for info like that you can hit up the Cincy Beer Week Official Calendar or, as always, visit Brew Prof and Queen City Fresh. However, I do want to share a few of the events that look most exciting to me.

Continue reading Tom’s Top Picks for Cincy Beer Week

Bourbon Classic Returns to Louisville: You Need to Be There

2014-02-01 16.10.08

Many times I have praised Cincinnati’s proximity to the heart of bourbon country, but never was I more thankful for it than last February when I was able to attend the Bourbon Classic. I learned more about bourbon history and the current  bourbon industry in that weekend than I had in the previous year. This year it is back and looks to be just as good as 2014. Once again Fred Minnick is MCing the Bourbon Masters Session and this year Jim Rutledge of Four Roses will be joining the line up. He was the one distiller I was very disappointed not to meet last year. The Bourbon University has some great classes lined up, including a very timely class on bourbon collecting. Here is the press release but for now all you need to know is this is the best bourbon opportunity you have within such an easy drive. And keep in mind that WhiskeyFest in Chicago is already sold out. Hope to see you there.

unnamed

Bourbon & Culinary Weekend Returns to Louisville in February 

Third Annual Bourbon Classic Focuses on World-Class Culinary and Bartending Talent

Louisville, KY (February 2, 2015) Bourbon Classic 2015, the third annual Bourbon-culinary experience will take place in Louisville at the Kentucky Center for the Performing Arts next weekend, February 20 – 21, 2015. The event attracts Bourbon enthusiasts and culinary adventurists from across the country. A complete cross-section of the Bourbon industry will attend: Bourbon distilling legends, writers, chefs, bartenders, connoisseurs, and casual enthusiasts.

This year, Bourbon Classic will kick off with an exclusive pre-event reception, Bourbon Classic Taste, on Tuesday, February 17th. Chef Ed Lee and Julian Van Winkle will participate in this progressive tasting experience hosted at Copper & Kings American Brandy. Kentucky Proud-inspired food, Buffalo Trace Bourbon, Four Roses Bourbon, Copper & Kings Brandy, Copper & Kings Absinthe, Van Winkle Special Reserve (12 year), Van Winkle Family Reserve (15 year), Van Winkle Family Reserve (20 year), and 1,000 Stories Barrel Finished Wine will be available. A limited number of tickets to this Kentucky Proud supported reception are available to the general public.

Friday, February 20 – Bourbon Classic Cocktail Challenge:

  • MC Jared Schubert, winner of the 2013 Bourbon Classic Cocktail Challenge, will guide attendees through the event featuring contemporary and classic cocktails and small plates prepared by teams of chefs and master bartenders representing distilleries. Cocktails and pairings will be judged by an expert panel including Hannah Hayes, Southern Living, Joy Perrine, Jack’s Lounge, and Chef Albert Schmid, Sullivan University. Participating teams are as follows:

    Barton 1792 Distillery
    Beth Burrows, Down One Bourbon Bar
    Chef Newman Miller, Harrison-Smith House, Bardstown, KY

    BlantonBourbon
    Marie Zahn, St. Charles Exchange
    Chef Levon Wallace, Proof on Main

    Buffalo Trace Distillery
    Jason Cobbler, Harvest
    Chef Coby Ming, Harvest

    Four Roses Bourbon
    Isaac Fox, Volare
    Chef Josh Moore, Volare

    Heaven Hill Distilleries
    Gary Gruver, Southern Wine & Spirits
    Chef David Danielson, Churchill Downs

    Jim Beam
    Sean Thibodeaux, 8-UP Elevated Drinkery & Kitchen
    Chef Todd Rushing, 8-UP Elevated Drinkery & Kitchen

    Michters
    Hannah Kandle, Old Seelbach Bar
    Chef Patrick Roney, Seelbach Oakroom

    Wild Turkey
    Amber Yates, Feast
    Chef Ryan Rogers, Feast

    Woodford Reserve
    Jacquelyn Zykan, Doc Crow’s
    Chef Jonathan Schwartz, Doc Crow’s

Saturday, February 21 – Ultimate Bourbon Experience:

  • Bourbon Masters Session
    Mark Coffman, Alltech Brewing & Distilling Company
    Wes Henderson, Angel’s Envy
    Ken Pierce, Barton 1792 Distillery
    Fred Noe, Jim Beam
    Harlen Wheatley, Buffalo Trace Distillery
    Jim Rutledge, Four Roses Bourbon
    Denny Potter, Heaven Hill Distilleries
    Nicole Austin, King’s County Distillery
    Willie Pratt, Michter’s
    Jimmy Russell, Wild Turkey

    Author Fred Minnick will MC this session sponsored by the Urban Bourbon Trail.

  • The Bourbon Classic University, exploring focused learning sessions like Country Ham & Bourbon, The Life of the Barrel, Essential Bourbon Cocktails Past and Present, Straight Up Storytellers, Bourbon & Cheese Pairings, The Art of the Glass, Entertaining with North American Whiskey, Bourbon Collections, Bourbon Flavor Profiles, and Bourbon Icons. Sets of five sessions will be offered and attendees will have the opportunity to choose which sessions to join.
  • The Bourbon Marketplace offering exhibits and displays featuring Bourbon tastings, book signings, food tastings, and culinary and Bourbon-related products.
  • Bourbon Culinary Tastings prepared by Coby Ming, Harvest, Sean Ward, Ward 426, Levon Wallace, Proof on Main, and Ouita Michel, Holly Hill Inn.

Some of the bourbon industry’s most well-known brands are sponsoring the event. The Urban Bourbon Trail is the welcoming sponsor of this event joining Buffalo Trace DistilleryFour Roses BourbonMichters, Alltech Brewing & Distilling Co., Barton 1792 Distillery, Bulleit Bourbon, Heaven Hill Distilleries, Jim Beam, Woodford Reserve, 1,000 Stories Barrel Finished Wine, BlantonBourbon, Wild Turkey, Bingham Greenbaum Doll, LLP, Old Forester, Angels Envy, Corsair Distillery, Jeffersons, Kings County Distillery, Copper & Kings American Brandy, and Willett Distillery. Media sponsors include The Bourbon Reviewand Louisville Public Media.

The Bourbon Classic was co-founded by Tony Butler of FSA Management Group, an established event planning and marketing firm based in Louisville, and Justin Thompson, Seth Thompson, and Bob Eidson of The Bourbon Review.

Ticket sales for the event are available by calling the Kentucky Center for the Performing Arts at 502-584-7777. Details are available at bourbonclassic.com.

New MadTree Cans Coming Soon Plus One More Surprise…

I don’t normally get into this type of thing as I have no interest in chasing TTB filings. If you want to keep hot on things like that follow Brew Professor on Twitter. That said, the reason I am publishing an article on this is that one of my absolute favorite beers in Cincinnati is going to be canned in early March.

Continue reading New MadTree Cans Coming Soon Plus One More Surprise…

Introducing Boulevard Brewing Company

Boulevard Brewing Company beers started showing up on Ohio shelves for the first time two weeks ago. I’ve been eagerly awaiting this moment. In all my travels, I always try to bring back one or two of the 750s from their Smokestack series like Bourbon Barrel Quad or Brett-Saison. I had some of the core beers but don’t recall being too excited by them, at least not enough to make sure I smuggled them back into Ohio.Boulevard Brewing Company

Boulevard started in Kansas City way back in 1989. They slowly grew to be one of the largest Midwest breweries. Boulevard was the 12th biggest craft brewery in 2012. Come 2013 they didn’t show up on the list anymore. That was because they were bought out by Duvel Moortgat which helped pull the combined company up to the 8th spot. Their beer has been available in 25 states, the closest being Indiana though I don’t recall seeing much there. I’m familiar with the brand thanks to travels to North Carolina and Georgia but now all we have to do is travel to the nearest grocery store!

On to the beers!

Continue reading Introducing Boulevard Brewing Company

Do you Tip for Growler Fills?

A few weeks back I read an article about Everything You Didn’t Know About Tipping. It didn’t have that much that I didn’t know about tipping but did bring a few insights. Then yesterday I was at a brewery getting a growler filled and found myself thinking, should you tip for growler fills?

First off if you’re asking what a growler is go check out BeerQuest ABV’s excellent post on the history of growlers. Now back to my situation at MadTree. In a hurry I bypassed Googling the subject from my phone and figured $1 was good. After I got to my friend’s house I put the question on Facebook and Twitter.

Continue reading Do you Tip for Growler Fills?