History Of Beer Essay

1065 words - 5 pages

There are more than 2000 brewers in the world, but three of them control 78% of the beer market. Anheuser-Busch controls approximately 45%, Miller Brewing maintains a 23% share, and Adolph Coors controls 10%. Anheuser-Busch's twelve breweries produce more than sixty varieties of beers in a number of families with operations around the world and distribution to over 60 countries. A few of these families are Budweiser, Michelob, Busch, Natural, Bacardi, and Grolsch. Miller Brewing produces more than 130 million barrels of beer annually and has operations in 40 countries with hundreds of brands. In July 2002, South African Breweries purchased Miller Brewing Company, forming one of the largest ...view middle of the document...

Beer wholesalers occupy the middle tier of the three-tier system. The 21st Amendment instituted the necessity of a middle tier for a variety of reasons. First, retailers are now protected from control previously used by the suppliers, or brewers. Second, it encourages consumption in moderation. Third, the process allows for more controlled and accurate collection of state and federal taxes. Finally, it allows individual states to regulate the licensed beverages in a manner that reflect their own practices and beliefs. The distribution appears to be simple, but the specifics are very involved. After manufacturing, the brewer will take orders from wholesalers based on the stock needed to fulfill orders from retailers. The beer is loaded into trucks, some often refrigerated to ensure freshness, and taken to the wholesaler or warehouses for storage. Over 2,000 breweries and importers sell their product to over 2,500 wholesalers that are often independent from the brewer. The wholesaler then sells the product, with a percentage markup (often 25%), to retailers. The wholesaler's job does not stop there, however. Wholesalers are also responsible for maintaining proper storage environment as dictated in contract with the retailer, maintaining adequate inventories, ensuring proper stock rotation in warehouses and retail trade, removing products past their expiration dates, maintaining payment terms as dictated by state liquor law or as stated in contract, servicing all accounts in their assigned territory, providing market intelligence (buy and non-buy lists, monthly depletions, sales data) to supplier, and assisting in agreed upon market promotions.

The third tier consists of the 531,000 retail establishments in the U.S. These retail establishments consist of traditional liquor stores, supermarkets, drug stores, membership clubs, and convenience stores, independently owned taverns, restaurants, nightclubs, and hotel chains. Beer comprises 61% or nearly $8 billion in sales at grocery stores yearly. Therefore, it is the most important beverage for retailers and should encourage them to understand beer drinkers. Although such high sales exist at grocery stores, according to VNU Business Publications, 45% of all beer purchases are made at convenience stores indicating a preference to pay a little extra for...

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