My story on Anheuser-Busch’s move to bring some of its core strong beers back into Oklahoma for the first time since 1977 was on the front of The Oklahoman’s Business section today. Because of space constraints, the version in the paper and that was posted on NewsOK cut out a little bit of analysis and some quotes. Here is the full version:
BY NICK TROUGAKOS
Reversing a decades-old business strategy, the maker of Budweiser has decided to reintroduce some of its core strong beers into the Oklahoma market.
Anheuser-Busch recently posted prices for a variety of its core strong beers with Oklahoma’s ABLE Commission for sale in the state beginning Nov. 1. Strong beers are those having an alcohol-by-weight of greater than 3.2 percent, according to ABLE.
The products, including Budweiser, Budweiser Black Crown and Bud Light Lime Lime-A-Rita,Ö would be available at liquor stores or bars licensed to sell strong beer.
The move is being eyed with interest in Oklahoma’s beer community. Some view it as simply a feeling-out process by the beer-making giant. Anheuser-Busch already controls several strong-beer brands, like Beck’s, Stella Artois and Widmer, that are distributed in the state.
Others suggest the addition of core Anheuser-Busch beers like Budweiser could cause a domino effect that would lead to changes in state alcohol laws.
“What this means is that potentially some players with very deep pockets would now have a vested interest in the strong-beer market in Oklahoma,” said Greg Powell, manager of TapWerks Ale House in Bricktown. “People with deep pockets are generally the ones who get laws changed.”
Anheuser-Busch offered a simple explanation for its decision. Regional Vice President Keith Diggs said in a statement that “select additional Anheuser-Busch products with greater than 3.2 percent ABW” will be made available in Oklahoma “in response to consumer demand.”
The sale of strong beer from America’s mega-brewers essentially ended in Oklahoma in 1977. That year, the country’s largest brewers — including Anheuser-Busch, Coors, Miller and Schlitz — elected to pull their strong beer out of the state.
The brewers battled with the state’s Alcoholic Beverage Control Board, which ruled that Oklahoma law required the beer makers to sell their strong beer to any and all wholesalers in the state. That decision was later upheld by the courts. The breweries objected, citing a lack of quality control over their beer once it went into the wholesalers’ possession.
Oklahoma law enables brewer-controlled distribution of 3.2 percent beer; essentially the beer can be monitored by the brewer from the kettle to the convenience store cooler.
The 1977 move to pull strong beer was met with lawsuits, a lengthy court fight and eventually a state question that would have allowed brewers to control the distribution of their strong beer. The question — backed in newspaper advertisements by Mickey Mantle — was defeated by voters in November 1978.
Hoping for change?
Anheuser-Busch’s current reversal for some of its core beers will likely draw interest from other mega-brewers, and from those in Oklahoma interested in changing the state’s alcohol laws, said John Maisch, outgoing general counsel for the ABLE Commission.
“It’s going to be an interesting six months or so,” said Maisch, who will leave his position at the end of the month. “I think that modernization of Oklahoma liquor laws is at the forefront of a lot of people’s minds in the industry and out of the industry.”
He said Anheuser-Busch is likely weighing the issue of quality versus quantity to gain access to the state’s liquor stores.
“There’s no doubt (Anheuser-Busch) wanted access to the 650-plus liquor stores,” Maisch said. “Quantity-wise, it had to be attractive to them.”
Liquor store owner Freddy Lamport, who operates BierGarten Wine & Spirits in Jenks and focuses much of his energy on beer sales, said he believes the jury is still out on Anheuser-Busch’s intentions. Lamport said he hopes it’s a positive step forward.
“If it leads to more relaxed liquor laws, I’m all for it,” he said.
Role of craft beer
Wes Alexander, director of sales and marketing for Tulsa craft brewer Marshall Brewing Co., said the move is a direct response to the growing success of craft beer.
“When a mega-multinational company makes a calculated move to gain market share in an otherwise flyover state, it signals a change in the culture of beer,” Alexander said. “While American light lager is still the king of the grocery and convenience store, that is not the case in restaurants, bars and liquor stores.”
“Naturally, (Anheuser-Busch) wants a piece of the action. Will they be successful in the strong beer game? Consumers will decide.”
Powell said he doesn’t see the addition of the core strong beers from Anheuser-Busch having a big impact at TapWerks. He said restrictions on sale prices, specials and marketing of strong beer actually make 3.2 percent beer a more attractive option in some cases.
Powell said that if the move signals a deep-pocketed push for more favorable strong beer laws in the state, it could tip Oklahoma’s current distribution model on its head. That in turn could crack the door for some of the country’s popular craft brewers, like Stone Brewing and New Belgium Brewing, who now won’t send beer to the state because of the same quality-control issues the mega-brewers cite.
“It could mean an influx of some very popular craft breweries in Oklahoma,” he said.
“That being said, this could be (Anheuser-Busch) dripping a toe in to test the waters. They might not like what they feel, and six months or a year from now we will all be back to where we started.”
“Either way, it is still very interesting.”