AB-InBev Just “Commandeered” the Entire South African Hops Market

If you’re one of the craft beer fans out there who has been defending last week’s acquisition of Wicked Weed by Anheuser Busch-InBev, then this is the story you need to be reading. You want direct illustration of how InBev’s business practices hurt the entire craft beer industry as a whole? They’ve just presented the best possible example, by more or less cutting off the entire South African hops market from independent American craft brewers. Those hops, which include some of the most sought-after new aroma varietals on the market today, will instead be earmarked for the breweries owned by InBev’s “The High End” division, including the likes of the just-purchased Wicked Weed.

Multiple breweries have weighed in this afternoon to break the news, including Rhode Island’s Proclamation Ale Company, which Paste previously praised in the finals of our pale ale blind tasting. Here’s the entire post that Proclamation shared on Facebook only hours ago.

For anyone wondering how AB InBev acquiring craft breweries effects the brewers, suppliers, growers and consumers of the market, here’s an example of the things that many craft brewers are scared of…

To set the stage, we purchased a few hundred lbs of South African hops from a small hop distributor that was dealing with some of the small SA farms/growers. The farms were under the umbrella of SAB which was recently acquired in the merger of AB/Miller Coors a little while ago. We were super excited to work with these hops as they were from a new growing region with new varietals and hence had new unique flavor profiles, also, the business we purchased them from was a small boutique hop shop that will be losing a huge chunk of what they work with to maintain their business. Anyway. Here’s what we received via email today:

Along with the news late last week of ABI buying Wicked Weed, I was informed by SAB Hop Farms (part of ABI’s purchase of SAB-Miller) that ABI are commandeering all the hops that were to be allocated for distribution to North American craft brewers. The goal is to sell the hops internally to their acquired (former) craft breweries, even though they have not been able to sell all the hops as of yet. Regardless, they refuse to let US craft brewers buy any CY 2017 hops believing this will afford them a competitive advantage in an increasingly competitive marketplace.

This is surely a sad turn of events. It sucks for the brewers, but has an even more tremendously shitty impact of the great guys that built a company around selling these hops to craft brewers.

San Francisco’s Cellarmaker Brewing Co., who we’ve also written about in the past, quickly chimed in on Twitter, decrying the move. Cellarmaker had made extensive use of the hot new South African hop varietals, but will now be unable to obtain those same resources.

Supporting AB InBev’s fake craft brands fuels this fire. Cutting off ingredient supply to indie brewers is wrong. #independentbrewer

— Cellarmaker (@CellarmakerBeer) May 10, 2017

Think AB Inbev purchases don’t matter for the craft beer industry? All South African Hops have been allocated to AB InBev “High End” brands.

— Cellarmaker (@CellarmakerBeer) May 10, 2017

Also commenting on Facebook is Portland, OR’s Great Notion Brewing Co., who we’ve also written about recently—it’s almost as if Paste is in the business of writing about good breweries! They said much the same as Proclamation.

Great… Anheuser-Busch InBev just swooped in and bought all of the exciting new South African hops we thought we had coming to us this summer.

San Diego’s popular Modern Times Beer has also just weighed in on Twitter, regarding what they call today’s “extreme dickishness.”

Next time you consider buying beer from AB InBev & their zombie breweries, we hope you’ll take this extreme dickishness into consideration

— Modern Times Beer (@ModernTimesBeer) May 10, 2017

The writing is on the wall, folks. If you’re buying beer from Wicked Weed, Karbach, Goose Island, Golden Road, Elysian or any of the other breweries owned by AB-InBev, these are the business practices you’re supporting. You’re funneling money into the coffers of a company that is DIRECTLY and negatively impacting the entire rest of the craft beer industry, while simultaneously using those profits to lobby in state legislatures for anti-craft beer legislation.

If you don’t care about craft beer, then fine. But if you do care, you can’t pretend that supporting AB-InBev owned breweries doesn’t negatively impact the rest of the industry. Either you admit that you’re helping InBev complete a monopoly over craft brewing, stifling creativity and freedom along the way, or you start getting more proactive with the choices of what you purchase. Now is the time to make a stand, and to make it with your dollar.

EDIT: AB-InBev has issued a statement on this story as it makes the rounds across the web, placing blame on a low-yielding hop crop—without denying that those hops making it out of South Africa will of course being going to InBev-owned, formerly craft breweries. From Willy Buholzer, Global Hops Procurement Director for AB-InBev:

South Africa is not a traditional hop growing region. SAB’s R&D efforts made it possible to grow hops in South Africa but it is still less than 1% of the world hop acreage and production. This year, South Africa suffered from low yields. Previously, SAB has sold a small surplus of locally-grown hops to the market. Unfortunately this year we do not have enough to do so given the poor yield. More than 90 percent of our South African-grown hops will be used in local brands Castle Lager and Castle Lite, beers we’ve committed to brewing with locally-grown ingredients. In support of the local industry, we additionally sell hops to South African craft breweries. This means that less than five percent can be allocated to other Anheuser-Busch InBev breweries outside of South Africa.

Knowing the high demand for South African hops locally and abroad, we are working to expand local hop acreage. Depending on the 2018 crop outcome, we may once again be able to sell more hops to breweries outside of South Africa.

Jim Vorel is a Paste Magazine staff writer and beer guru. You can follow him on Twitter for much more beer content.