[Craft] Beer as a Business

Disputes about the alcoholic beverage industry, beer specifically, are nothing new. Since prohibition in the early 20th century until now, people in the industry have been working to protect the sanctity of this precious, ancient beverage. Most opposition comes from outside of the community (which I will not get into), but I’ve read a few articles in the last several months about different inter-craft beer community conflicts. It’s disconcerting that even though the craft beer community seems to be very closely knit, at the end of the day, beer is a business. Maybe because, as a believer in the craft beer movement, an overarching theme is not drinking mass produced, thoughtless beer by mega foreign companies, especially when those corporations hinder the growth of the craft industry with their business tactics. Craft breweries sinking to those levels, while just in their cause (mostly), seems to go against the very tenants that make craft beer what it is.

I have made a hobby of craft beer with my blog and a significant personal commitment to improving it through Open The Taps, a recent venture into grassroots, non-profit, consumer advocacy for Texas craft beer enthusiasts; I suppose I feel more emotionally involved in the community than before, when I merely just drank good beer. The craft beer community is a huge part of my life, and that’s fine with me. It’s also probably why these spats, legal or otherwise, between breweries bother me. There are enough obstacles facing the burgeoning industry (see First Amendment suit by Flying Dog in Michigan), that any issues from within are unnecessary at the least, and possibly detrimental to growth. Clearly, I am a dreamer. In a state where our main battle is changing laws, not arguments between craft breweries, it’s hard for me not to have the interest of the greater good at stake in mind, the progression of craft beer. While I appreciate that there could (will?) reach a point where it will take strategies, legal or otherwise, to win space in crowded craft beer markets, that time has hardly come. As the industry grows, carving out a distinct, recognizable brand will be more difficult, but the issues recently do not deal with new breweries mistakenly using a name or logo of an existing brewery, rather between already established breweries.

For the relatively short time that my blog has been around, most craft beer news has been inspiring; new breweries opening up, charity beers, cross-country collaborations, and generally just a friendly nature within the community. One of the earlier conflicts, September 2010, as reported on by Beernews.org here, was between Lost Abbey and Moylan’s over the use of the Celtic cross in a similar fashion on their tap handles.

Lost Abbey claims to use the cross on their tap handle in a unique way and that Moylan’s was using this style, only recently, in violation of their trademarks. You can read a great legal explanation over at The Brewery Law Blog, a new favorite read of mine. I’m still trying to find any information on a resolution to this, or even a lack thereof, but to no avail. Settled out of court? Anyway, we can’t lose the idea of intellectual property by not enforcing the laws surrounding it, intent is not relevant, and as subjective as that is, nor should it be. All of the legal issues aside, did Moylan’s change their tap handle in an attempt to gain any profits from the popularity of Lost Abbey?

L: Lost Abbey Tap Handle, R: Moylan's Tap Handle

In the same trademark vein, there’s a more recent dispute, story at Beernews.org again,  over the name “Ichabod”, wherein New Holland has sent a cease and desist letter to Alpine Brewing over using the name. New Holland’s trademark was filed in May 2008, but wasn’t recognized until December, shortly after Alpine won a World Beer Cup Gold Medal for their Ichibod Ale in April of that year. New Holland has been making this beer since 1997, according to Lindsay Patton at Revue, and Alpine has only had it’s doors open since 2002, so it begs the question, why did New Holland wait until 2008 to trademark? Coincidence that it was right after Alpine won a medal for a beer with the very same name? Hard to think “no” is the answer to these questions.

New Holland Ichibad Logos and Labeling

Alpine Brewing Company Ichibod Ale Label

This is the same story as a recent Trademark by Saint Arnold, my hometown brewery, for the name “Pumpkinator” which is used by Capitol City Brewing, a brewpub in Washington D.C. There are reviews on Beer Advocate dating back to 2007, well before Saint Arnold brewed the predecessor to Pumpkinator, the Divine Reserve #9. It’s hard to tell if they knew about Capitol City’s beer with the same name, or just wanted to trademark their new seasonal. Essentially, Capitol City couldn’t use the name for this beer without infringing on the trademark. If Saint Arnold doesn’t take action against them using the name, what was the point of the trademark in the first place? It’s useless to try and protect intellectual property without following through.

Saint Arnold's New Seasonal- Pumpkinator

Just this week, another issue popped up, not a trademark issue this time, but loosely related to intellectual property, a non-compete conflict.  Boston Beer Company is suing Anchor Brewing Company and former employee, Judd Hausner, alleging that Judd violated the terms of his contract by taking a position with Anchor, before a one year non-compete period had been completed. Since Boston beer Co claims that Anchor is a direct competitor with them and that they “taught Hausner everything he knows about the beer business”, they are asking for repayment of training fees and that he not be allowed to work there until the one year period is up.

I know I haven’t covered every issue within the craft beer community. If I did, you’d probably never read the novel of a blog post that would be. I just wanted to touch on a few of them and discuss, in a more general way, the consequences of these conflicts on the industry. Does it have an affect? Are we going to start seeing more of this as the community grows and grows? There are a million questions to be asked. I’d hate to believe that these conflicts are done out of some ill-will toward another brewery, but as they say, “business is business”. I guess for me, these issues, petty fights and harsh exchanges of words all start to break down the image of the craft beer scene I have created and grown to love; the pedestal isn’t so high up anymore. Maybe that seems too dramatic and one of those silly “what will this lead to?” arguments you see in politics, but no one starts a craft brewery (and succeeds) if they are in it just for the money. So why should I have to let go of the romantic ideas that breweries want to make quality products, push the envelope on styles and share their passion with the community? On the other hand, even if you don’t want to make millions of dollars brewing beer, I know these people have to support their families. Even though they may not be trying to make it rich, they do pour everything into their beers, thus warranting the need to protect their property. Where is that line, protecting out of pride, or trying to gain off of another brewery’s intellectual property? Is it possible to shed the idea (even if it’s just me) that craft breweries can be small and hold true to their roots while at the same time suing another brewery? The craft beer industry is going to continue to experience these inevitable growing pains, but what will come of them? Will we see positive change in the protocols surrounding intellectual property among breweries, or will we be reading more about law suits?