Is Anheuser-Busch InBev a Bully or Just Practicing Smart Business Practices?

ANHEUSER-BUSH

Anheuser-Busch InBev, the biggest beer company in the world, will no longer supply South African-grown hops to brands the company doesn’t own. Unsurprisingly, the decision is brewing controversy among those in the craft beer community.

Understanding the outrage starts with understanding how beer is born. Each beer’s distinct flavor and aroma is the result of a brewer using different hop varietals (of which there are thousands). Therefore, if your favorite IPA uses South African hops and the brewery isn’t owned by AB InBev, you probably won’t be seeing it on shelves much longer.

At this point, craft beer drinkers are used to playing David to AB InBev’s Goliath. Look no further than the recent acquisition of Wicked Weed by AB InBev—a move that prompted hand-wringing from those who think “selling out” is never the answer, no matter how much success you stand to gain in the process.

But this latest controversy is more than the typical “sell-out” argument—it’s a debate over what kind of industry the beer community wants for itself.

Although South African hops only account for less than 1% of the world’s hop production, many beers (like Floating World by Modern Times) rely on them for their specific flavors and aromas. SABMiller, the company that owns all of the South African hop farms, was acquired by AB InBev last year and relinquished its control in the process. Citing a low yield of hops this year, AB InBev determined that it would not be selling any of the South African hops to the rest of the market.

Because hops are unique, every recipe that calls for South African hops will now have to be adjusted or thrown out altogether. Brewers who’ve come to use South African varieties like African Queen, Southern Aroma, and Southern Passion accuse AB InBev of hop hoarding, and say it’s setting a dangerous precedent. Modern Times, a San Diego brewery, was quick to share its thoughts via Twitter:

“I was informed by SAB Hop Farms … that [AB InBev] are commandeering all the hops that were to be allocated for distribution to North American craft brewers,” an associate for the Rhode Island-based Proclamation Ale Company wrote on Facebook.

“It sucks for the brewers, but has an even more tremendously [expletive] impact [on] the great guys that built a company around selling these hops to craft brewers.”

It didn’t take long for the anti-“Big Beer” narrative to take shape among beer communities like Beer Advocate. By flexing its financial muscles and limiting the sale of South African hops to brands already under its control, many beer hobbyists say that AB InBev is assuming the role of the schoolyard bully, using its power and payroll to disadvantage the scrappy underdogs.

But not everyone feels this way.

“It’s ingenious from a business perspective,” says Matt Sander, Lead Brewer of the up-and-coming brewery Little Known Brewing. “Hops are an agricultural product with an extremely high investment in innovation. It is very expensive and time-consuming to develop a new commercial variety. The breweries that [AB InBev] buys will be the only ones who can access these new and exciting hops.”

In other words, Sander says, “I don’t think Pfizer should have to share Viagra with [its] competitors.”