Corporate Whiners Dept: Diageo stomps on Brewdog

[Capn Jimbo]

Woof, woof!


I'm pretty sure most of you are aware of the giant spirits conglomerate, Diageo. This mega-corporation owns north of 100 spirits, wines, beers and mixed drinks - most of which are household names. Accordingly they spend millions of dollars to insure shelf space, and to cause you to buy them. How far do the go to achieve this?

Far.


An Example

The 2012 BII Scotland Annual Awards is run by, of course BII - who is an organization dedicated to raising standards of quality. Each year they hold a gala event in Glasgow to announce the winners. Diageo was the sponsor. But there arose a little, itty bitty problem.

BII had chosen a small bar named "Brewdog" as "Bar Operator of the Year". Brewdog had been chosen in the pre-award deliberations and along with the other winners, trophies were ordered, made and engraved. All that was left was the Awards Gala and the presentation. Brewdog was adviseed to attend, having been tipped that "You have done very well in your category". But then an amazing thing happened!

The "Brewdog" engraved award was at the last minute given to a large competitor who - also amazingly - refused it! Why you ask?

Simple. Keep in mind that Diageo and a number of their senior and other reps attended the gala, and one of them had literally threatend BII, that if Brewdog got their award, Diageo would never again sponsor the event, and they'd walk out and not present any awards! Ergo a last minute change to the recipient. And why did Diageo do this?

Simple. Brewdog is really a craft bar and features their own "Brewdog" beers, made right there. Brewdog represent a huge trend in beer toward craft brewing by small and independent brewers - a market that giant Diageo does not, and will not control. Small craft brewers - as a group - have become a real threat to sales of Big Beer. It's Big Beers and Diageo's own fault for producting bland, lowest common denominator products.


So then what happened?

1. BII and the judges were appalled and apologized to Brewdog. They publicly stated they caved and were sorry they had done so.

2. The last second "alternate" winner refused the award, and not only because it was engraved with "Brewdog". They said it wasn't right, and they wouldn't accept it.

3. Scotland media picked it up and properly castigated Diageo as a "Beer Bully". Words like "blackmail", "dirty tricks" and "bully".

4. Diageo, realizing their bully ploy had completely backfired, worked hard to repair their own damage and publicly apologized, blaming it on a "junior representative" who they then threw under the bus. Nobody bought this, especially since senior Diageo reps were at the Gala.

5. It later was revealed that it was the most senior Diageo rep who'd threatened BII.


Bottom Line

Just like Walmart controls retail, Diageo and a literal handful of huge mega-corporations control our drinks, and it's not about quality; rather, it's about sales and profits.

I've discussed this with some of the leading independent voices on the net, and we all agree that spirits are becoming more bland, less unique, less experimental. The winners and losers are now chosen by the Diageo's and their like, not by their quality, but by their cost and profits. Spirits, wines and beers are really art, and something is lost in attempting to manipulate flavors for mass appeal. Think Bud Light. Diageo is smart enough to leave some of their well known brands mostly alone, but it is inevitable that even subtle but constant pressure for sales and profits slowly homogenizes the product, barrel by barrel.

The Brewdog incident is illustratrive of something else, namely that craft and small, independent distillers have actually been given an opening to sell to the many consumers whose tastebuds and desires prefer the kind of quality that the biggies can't or won't produce - unique and tastly products that people are more than willing to pay for.


What's Next?

It's happened in beer, and is beginning to happen in spirits. Think Phil Prichard, Richard Seale, New Orleans and Charbay. Unfortunately, the US regs are a little hard on small distillers, unlike other countries who promote small distilling, or even allow home distilling. Truth is, distilling can be done economically on a craft basis, if only the regulations encourage these small businessman.

Support that, won't you?


Part One
Part Two


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Capn's Note: Check out Brewdog's site for their side - very interesting, great pics...

[RT]

Diageo Rums:

Bundaberg
Cacique
Captain Morgan
Myer's
Pamparo
Zacapa

What are you drinking tonight?

[John Willy]

I don't want to stray from rum, but Capn's first post lead with beer/brews. By the way thanks RT for the list. I have the last two on your list and just on GP would be hard for me to restock. Maybe I should finish those first and get on with my education. Back to beer. AB In-Bev, the giant 'brewmeister'. Check their list out.

Worldwide Beers:

Stella Artois
Becks
Budweiser

Multi-country Beer:

Leffe
Hoegaarden

Local Champions (their term):

Alexander Keith
Antarctica
Aqua Fratelli Vita
BagBier
Baisha
Bass
Belle Vue
Boddingtons
Bohemia
Boomerang
Bud-Light (U.S.)
Bud Light Canada
Caracu
Chernigivske
Diebels
Diekirch
Dommelsch
Double Deer
Franziskaner Hefe-Weissbier Dunkel
Franziskaner Hefe-Weissbier Hell
Franziskaner Weissbier Kristallklar
Gilde Ratskeller
Guaraná Antarctica
Guaraná Brahma
Haake-Beck
Harbin
Hasseröder
Hertog Jan
Hoegaarden citrons
Hougaerdse Das
Jinling
Jinlongquan
Julius
Jupiler
KK
Klinskoye
Kokanee
La Bécasse
Labatt Blue
Labatt Blue Light
Labatt Family
Labatt Ice
Labatt Sterling
Lakeport Pilsener
Liber
Löwenbräu
Löwenbräu Oktoberfestbier
Löwenbräu Original
Marathon
Michelob Lager
Mousel
Paceña
Permskoye Gubernskoye
Piedboeuf
Quilmes Cristal
Red Shiliang
Rifey
Rogan
Safir
Sedrin
Sibirskaya Korona
Skol
Spaten - Original Munich Beer
St.Pauli Girl
Sukita
Tolstiak
Vieux Temps
Yali
Yantar
Zizhulin

Cheers.

Regards,
John


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Capn's Log: Thanks, John. It is really eyeopening to realize the lack of real competition, and thus the reduction in innovation. It's more about dividing up the market among your own long list of offerings.

[John Willy]

Just a quick update. Per a short NR Diageo stated they are in negotiations for a share of United Spirits, Ltd.

United Spirits Limited is the largest spirits company in the world by volume. It has a global footprint, but has a 59% market share for its first-line brands in India. It has established manufacturing and bottling plants in every state of India.

Big and likely getting bigger.

Regards,
John


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Capn's Log: Sad. We can expect a further homogenization as spirits descend to the lowest common denominator