And we wonder why a longneck costs $5 at a bar

[steveh_131]

Are you trying to imply that you smuggled liquor or something?

 

[rockhopper46038]

I am late in this thread late, but after wading through the 8 pages, I can see both sides of this (I think). Although OP was about licensing, the thread has raised issues with the distribution process. I can see where a major manufacturer (brewery) would have a distribution network with exclusive territories. That would be a business agreement between the manufacturer and distributor.

Question I have, is this mandatory? Could I open a brewery and distribute and sell as I wanted, based upon my own business plan? I think not, which to me is where the rub is.

An Indiana brewery (in Indiana) can. There are some laws that allow you to do and not do certain things depending on how much beer you produce, but yes, you could open a brewery in Indiana and distribute your own beer if you wished to.

 

[Zoub]

Are you trying to imply that you smuggled liquor or something?

Why do you assume laws were broken?

Whiners sound like sheep and sheep are pussies. Asses the situation and figure out where the money is going to come from, then go get it.

You can ***** about the way things are in Indiana but the current situation is the roadblock to something much worse. That is reality. Vote with your feet, if your State sucks, move.

 

[steveh_131]

If you don't like hearing people discuss corruption and tyranny, vote with your feet and find a new forum on the internet where people don't complain.

 

[level.eleven]

Looks like some shady business was going on at the auction. Liquor License R Us (yes, that is a real "company") may have been doing a little prospecting. There is also a unique connection between the owner of Liquor License R Us and another state agency.

Advance Indiana: Liquor License Auction Raising Questions

 

[hornadylnl]

Another reason I won't vote republican. They can't even call corruption corruption.

 

[IncendiaryGunner]

I still fail to see how regulating an industry to the point where more overhead exists could ever not lead to higher costs being passed down to the consumer.

Yes, "licensed" companies can still compete between one another - but without the door open for outside innovators and competition, prices are not reduced to the same degree over time, because you are artificially limiting the competition. Creating artificially high statup costs through government regulation also stifles competition.

Through regulation you may keep more businesses open, and keep more individuals employed - but the product in turn costs more to the consumer, because the cost of production or distribution is artificially increased. You just cannot get around that... the cost of the product is directly tied to the production and distribution cost...increasing that cost, in turn - increases the price.

 

[88GT]

I still fail to see how regulating an industry to the point where more overhead exists could ever not lead to higher costs being passed down to the consumer.

Yes, "licensed" companies can still compete between one another - but without the door open for outside innovators and competition, prices are not reduced to the same degree over time, because you are artificially limiting the competition. Creating artificially high statup costs through government regulation also stifles competition.

Through regulation you may keep more businesses open, and keep more individuals employed - but the product in turn costs more to the consumer, because the cost of production or distribution is artificially increased. You just cannot get around that... the cost of the product is directly tied to the production and distribution cost...increasing that cost, in turn - increases the price.

Don't think anyone was arguing otherwise (though I admit to skimming some of the posts when time was a factor). But the irony is that the free market is still at work even when businesses are regulated. Regulation almost always drives up price, but it doesn't always necessarily cripple a business or industry. If there's enough existing gap between current price and the highest a consumer is willing to pay before exiting the game, there's room for regulation. From the consumer side. It may keep a few producers out of the game.

I am not justifying regulation.

 

[IndyBeerman]

Is it possible to enter the distributor market? I noticed where several distributors operate on a national level.

Wasn't there a stink between a national distributor getting their Indiana license?

To enter into the distributor market you're going to need deep pockets to get started, at least some hint that you can get a contract, and you better be able to hire a workforce that is experienced from the ground up.

Sound like you qualify for it?

None on a national level, but there is one liquor/wine (Souther) that has about 34 states and DC.

The stink was Southern because technically you need to be an Indiana Resident to hold a Beer, Wine or Liquor distributorship.

 

[IndyBeerman]

I don't think anyone would argue that it couldn't be worse. It could always be worse. How is that relevant to the discussion?

Well, you could be stuck with not being able to sample a out of state micro, Coors products did not even enter the Indiana market until the 90's, I could go on and on.

 

[level.eleven]

To enter into the distributor market you're going to need deep pockets to get started, at least some hint that you can get a contract, and you better be able to hire a workforce that is experienced from the ground up.

Sound like you qualify for it?

None on a national level, but there is one liquor/wine (Souther) that has about 34 states and DC.

The stink was Southern because technically you need to be an Indiana Resident to hold a Beer, Wine or Liquor distributorship.

Why would I need deep pockets? How deep? Who decides whether or not your criteria are met? The market?

 

[IndyBeerman]

Why would I need deep pockets? How deep? Who decides whether or not your criteria are met? The market?

You're kidding me right? You think you can start up a distributorship with 10 or 15 Grover Cleveland's?

Want to know the 2 fastest ways to throw you money out the window?
Buy a restaurant, or buy a Distributor, neither is for the weak hearted.


How big do you want to be?
How much territory do you want to try and deliver?
How big of a warehouse will you need?
How much land will you need?
Equipment, trucks, trailers, forklifts, vans, electric pallet jacks, ect...
People, you'll people, a LOT of them.

Now who decides what criteria is met, the producer of the product decides, and if you don't have any of the above in place before hand, you're S.O.L., because they won't look at you with out it in place.

My first distributor before we got rid of Budweiser, was on 7.5 acres with a 50,000 sq ft building. We had at one time 125 employees and had 25 trucks and serviced 7 counties during the most competitive years of trans shipping.

Care to guess how much that would cost at today's dollars?

To give you an idea of just how big today's beer distrib buildings are.

Here are the 6 biggest that I can remember off the top of my head.

Working, Evansville, 85,000sq ft. Budweiser
5 Star, Columbia City, 95,000 sq ft. Miller/Coors
Dever Dist., Terra Haute, 104,000sq ft. Budweiser
Zink Beverage, Indpls, 100,000 sq ft. Budweiser
North Coast Bev. Valparaiso, 105,000 sq ft. Miller/Coors
Monarch Bev. Lawrence, 500,000sq ft. Miller/Coors, wine, micro brews.

The above building are temp/humidity controlled per brewery standards, trucks must be re-labled with new advertisement every 3-4 years and of all outdated product has to be destroyed and the only re-reimbursement is the tax that is paid on it when it's purchased.

The above is merely touching the surface of obligations that have to be met to be a distributor.

Want split the cost halfsie's with me and buy one? 30-50 Million a piece might get a foot in the door as long as the brewery approves the sale.

 

[steveh_131]

Well, you could be stuck with not being able to sample a out of state micro, Coors products did not even enter the Indiana market until the 90's, I could go on and on.

On and on about what? What does this have to do with anything?

This thread is so confusing. Obviously you love this system. It's your livelihood, right? That's fine.

Nobody should care how producers choose to distribute their products. They can use 1, 2, 3 or 50 tiers. Let the free market decide which system is superior.

We should care, however, if the government interferes in the process through regulation or subsidization. And I think this licensing scheme is extortion and should be abolished. What people choose to sell on their own property is none of our or the government's business.

 

[IndyBeerman]

On and on about what? What does this have to do with anything?

This thread is so confusing. Obviously you love this system. It's your livelihood, right? That's fine.

Nobody should care how producers choose to distribute their products. They can use 1, 2, 3 or 50 tiers. Let the free market decide which system is superior.

We should care, however, if the government interferes in the process through regulation or subsidization. And I think this licensing scheme is extortion and should be abolished. What people choose to sell on their own property is none of our or the government's business.

Yes it is my livelihood, but in case you missed it earlier let me say this again.

In 1972 there was over 385 distributors in the state, up until the sunshine law was passed in 1979, that dwindled down some because of retirement purchases.

So from 1979 till 2002 there was in fact an open free market, you could buy from any distributor you wanted to if they wanted to serve the market.

During that 23 year fiasco, distributors dropped like flies because of cut throat business. Retailers would drop you in a heartbeat over 5 cents a case. The max deal for top end savings was 125 cases, so what happened was longtime customers dropping a local distributor over a mere $6.25. During that time frame, service was crappy a lot, inventories was out of stock (you have to place your inventory orders 6-8 weeks in advance) because you never knew who was going to buy from you one week to the next. It was utter madness at times.

So during this free market wild a$$ ride, in order to put as many cases into the market that they could to stay afloat, they basically drove themselves into bankruptcy by trying keep a slice of the pie.

It became a survival of the fittest game and month by month I personally watched distributors close their doors one at a time.

In that 23 years, (I entered the business in 1985) that 385 total dropped to around 28.

Each one of them provided jobs, tax base and employees pumping money in the local economy where they was located. They employed anywhere between 25 to 125 employees, so if you went on the low end and there was a average of 50 employees per distributor, that equaled over 17,500 jobs. There is no where near that total now and I'd be inclined to think it's below 8,500.

Like I said earlier, is the 3 tier perfect, no, but it works. Or would you prefer the method that about 18 states use, and that is state owned liquor stores.

There is no perfect world, if there was, it'd be mostly sunny, 72 degrees every day and would only rain between 10pm and 5am.

 

[Whosyer]

Yes it is my livelihood, but in case you missed it earlier let me say this again.

In 1972 there was over 385 distributors in the state, up until the sunshine law was passed in 1979, that dwindled down some because of retirement purchases.

So from 1979 till 2002 there was in fact an open free market, you could buy from any distributor you wanted to if they wanted to serve the market.

During that 23 year fiasco, distributors dropped like flies because of cut throat business. Retailers would drop you in a heartbeat over 5 cents a case. The max deal for top end savings was 125 cases, so what happened was longtime customers dropping a local distributor over a mere $6.25. During that time frame, service was crappy a lot, inventories was out of stock (you have to place your inventory orders 6-8 weeks in advance) because you never knew who was going to buy from you one week to the next. It was utter madness at times.

So during this free market wild a$$ ride, in order to put as many cases into the market that they could to stay afloat, they basically drove themselves into bankruptcy by trying keep a slice of the pie.

It became a survival of the fittest game and month by month I personally watched distributors close their doors one at a time.

In that 23 years, (I entered the business in 1985) that 385 total dropped to around 28.

Each one of them provided jobs, tax base and employees pumping money in the local economy where they was located. They employed anywhere between 25 to 125 employees, so if you went on the low end and there was a average of 50 employees per distributor, that equaled over 17,500 jobs. There is no where near that total now and I'd be inclined to think it's below 8,500.

Like I said earlier, is the 3 tier perfect, no, but it works. Or would you prefer the method that about 18 states use, and that is state owned liquor stores.

There is no perfect world, if there was, it'd be mostly sunny, 72 degrees every day and would only rain between 10pm and 5am.

I kind of like that whole "survival of the fittest " deal.

 

[steveh_131]

It became a survival of the fittest game and month by month I personally watched distributors close their doors one at a time.

Sounds like there were way too many distributors than were required for that industry. The product was still distributed to the end user, so why should I care how many distributors there were?

Like Whosyer said, I have no problem with survival of the fittest.

 

[jrainw]

Buddy of mine is trying to reopen a bar and is dealing with this crap, he says buying from a distributor for his bar isnt any cheaper than what I pay at the liquor store. Is this BS or is he really forced to buy from a distributor at regular prices?

 

[rockhopper46038]

Depends what he wants to carry. Certain beers are only available from certain distributors. I know that our price to bars/taverns/restaurants is less than our retail price.

 

[IndyBeerman]

Buddy of mine is trying to reopen a bar and is dealing with this crap, he says buying from a distributor for his bar isnt any cheaper than what I pay at the liquor store. Is this BS or is he really forced to buy from a distributor at regular prices?

The key to getting good prices is with bulk purchases, if he's buying low quantities (25 cases or less) then he's buying at the highest wholesale cost.

Also he needs to look at 18 LN-NR vs. 24 LN-NR prices. Sometimes it's cheaper to go that way. A few cents a bottle difference parlayed right can equal out to a huge windfall after about 7 or 8 deliveries in a bar setting.