Jason Sandford
Jason Sandford is a reporter, writer, blogger and photographer interested in all things Asheville.
Food for thought regarding the possibility of New Belgium Brewing opening a brewery here in Asheville, from loyal reader Ricky Party:
What those on the outside don’t understand is how this will affect sponsorships and how it will only exacerbate the “pay-to-play” virus that has infected the downtown committees and how they manage every outdoor festival, from LAAF, to Downtown After 5, to Belle Chere, etc.
The price it costs a local brewery to serve its beer from one tap at these events is astronomical, and it’s only going to become more and more difficult and expensive for the local, established breweries to use these opportunities to promote and sell their product when New Belgium comes in slinging their money around and outspending and outbidding everyone else on tap spots.
Most breweries rely on those big festival weekends for major profits at various points through the year. They’re pretty much budgeted in. The tap spots are probably going to be so expensive now that breweries will barely break even on sales, if they’re lucky. Most will simply not participate. Get ready for lots of downtown festivals with only New Belgium (and maybe Highland) being poured.
Highland will be hit hardest. Their six packs are, what, $7.99 at most places. Be prepared to find six packs of Fat Tire at Ingles for $5.99. What do you think most people will buy, given the choice?
Something else those of you who are cheering this on might not understand, as to reasons why local breweries resent the way this is being handled, is that New Belgium is going to get millions in tax breaks to set up here, HERE…. a place where they have had NOTHING to do with the success of our local beer industry/culture. And for what, a handful of grunt jobs? Rest assured that most, if not all, of the higher profile jobs in this new operation will be filled by company veterans who want to move to our beautiful area. But where are the tax breaks for the breweries who have made this area what it is, who have made this a place where New Belgium wants to build their next operation, who have employed locals for years?
True, it could ultimately serve a larger purpose for everyone. A rising tide lifts all boats, sort of thing. But the way it’s being handled by the county is pretty insulting to the breweries who have been here for years, who have paid property taxes for years, etc.
Meg, I can't wait. You've contributed so many incredible insights to this thread, I bet you'd be a blast to hang out with. I'm sure I could learn a lot from you! But please, work on your grammar in the meantime. You really need to reign it in if you expect to be taken seriously. "Proves true"?! *tsk tsk*
You take care, now!
Ricky Bobby – You have put me in my place. Well done, sir.
While you are not the only Asheville resident to misspell our largest festival's name, it's something I typically see by all the highly "intelligent" Citizen Times commenters.
Since I didn't contribute enough with my original post, I'd like to add that I look forward to seeing if your theories on New Belgium proves true at all our local festivals. Maybe I can meet you downtown, buy you a (New Belgium brand) beer & pat you on the back. You seem like a really fun guy.
Cheers (and bless your heart). XOXO – Meg
What the hell, I'm bored on this Sunday afternoon. Let's see here…
"Dear Ricky Bobby –
Well, technically I pointed out a SPELLING error, not a grammatical one. Are you aware the difference?"
Yes, I am, but are you aware of how to properly structure a sentence? "Aware the difference?" Don't you mean, "Aware OF the difference?" How can I be aware something. Your syntactical structure here shows a distinct lack of understanding in prepositional phrasing, and unfortunately disqualifies the thrust of your general argument. I'm afraid I just can't get past this lack of judgement on your part, and therefore must disqualify any broader argument you may be trying to make.
"Just a few thoughts, if you want to be taken seriously, by me at least."
And YOU expect to be taken seriously? As if! This does not even begin to be a complete sentence. You should have ended at "seriously," but your hubris wouldn't allow that, would it. No, instead you turned it into a grammatically illogical and nonsensical garbling of words by tacking on that lazy ending. I'm sorry, but that really was the last straw. I don't care how intelligent your points are, they're meaningless if you can't put together a proper sentence.
Just a few things to ponder, if you happen to find yourself being hilariously persnickety while throwing rocks in a glass house.
Bye, bye now, sweetie!
-Ricky Party
How come Asheville is not being considered for Sierra Nevada's Eastern expansion as well? I see they have promised at least 100 jobs for the community they will settle in.
indy499 – $500 per tap at LAAF, well over that for DT After 5. I'm involved indirectly, I've seen the invoices, so I think I know what I'm talking about.
Dear Ricky Bobby –
Well, technically I pointed out a SPELLING error, not a grammatical one. Are you aware the difference? If I'm going to read something you submitted to Ashvegas, I would hope you'd proof-read it before hitting "send." Just a few thoughts, if you want to be taken seriously, by me at least.
XOXO,
Meg
Really, IF New Belgium moves here to create an East Coast distribution center, perhaps it will stir up some competition within our fair city between the breweries we do have here. I think many of these breweries rest on their laurels since this is "Beer City USA" and hopefully, hopefully some of these breweries will step up their game and make better beers cause some of them are crap. If the LAB didn't have good food and a prime location it would have died, cause that beer needs some work! And Craggie, c'mon, stop half assin' it. The only consistenently good brews are from Highland and Pisgah. And how soon before ABC runs out of infuser ideas? Hopefully soon. Geez. Enough Mad Scientist! Just make beer.
Nowhere in my original post did I say New Belgium shouldn't come here. They're welcome to come. I'm one of those "mediocre marketing people" at a local brewery that's doubled in size over the past three years, and am used to competing with companies 6, 20, and 200,000 times my size.
My original post slavered and salivated about tax breaks and tax breaks only. I'm not in the habit of writing checks to my competitors. It's not marketing, but it's pretty mediocre management, I'll tell you what.
Also, it's been common knowledge in Colorado for some time that NB is coming here. Our "mediocre negotiators" with the Economic Development Commission apparently feel like giving them $3 million will make them come here, what, twice?
Ricky, don't know who is providing the tap information you cited, but for one of the events for which I was personally directly involved the figure is $100-150 per tap. Given the quantity of kegs then purchased from the brewery it amounts to a discount off the keg price of roughly 5%.
Having glanced over the festival websites, it appears some of the money made off beer sales does go to charities. But in the case of Downtown After 5, only half of the money made selling wristbands goes to the charity. It doesn't say anything about where the profits made from the actual pint sales go. I can only assume back into the Downtown Association.
Also, WIld South partners with the City to help manage beer sales at Bele Chere, and LAAF is put on by Arts2People. I'd like to know how much of the proceeds are going to these charities, and whether or not these things are used more as PR leveraging tools to help justify enormous costs to vendors.
Oh, and thanks to the Grammar Police for their contributions. You guys really add a lot to the debate!
Sorry,"Ricky Fiesta" but your wrong. Tap fees are extortion. They are a way of getting beer for even cheaper to increase an"association" or "charity" profits. If the locals can't afford it, we know who can. As someone who "sits on these committees" maybe you shouldn't hide behind anonymity.
Just a few things:
– I am not against the free market or free enterprise. But when local government offers subsidies to attract business, it's not a free-market. Simple as that.
– If you consider a tap fee of $500-$1000 (per tap!) "modest," than I don't care to see your definition of extravagant. Saying that's a nice discount after the cost of purchasing kegs is true only if the festivals purchase those kegs and then do nothing with them. But what do they do with those kegs of beer? Oh, that's right! THEY SELL THEM AT $4 PER PINT!. And where does all that money go, charity? I don't think so, it goes right back into the festival coffers. So, while the breweries who participate often have to sell about 10 kegs just to break even, the festival makes thousands from each "modestly" priced tap spot. Give me a break, the festivals are getting rich off the breweries and the breweries are having to pay-to-play exponentially more each year just to be present. Sure, some breweries ultimately make money from the events, but only after they've cleared the enormous hurdle of the tap rental costs – costs that have escalated in some cases 100% over the past few years.
Not sure where Ricky gets his information on beer festival economics in Asheville, but his assertions are way off the mark. The tap fees are very modest and when thought of as a discount against the beer being purchased from the brewer, it ends up being a very modest volume discount.
Also confused by the beer price comparisons. Fat Tire is available here today and costs less than local craft beer. For a reason, btw. One can save even more $ by purchasing Milwaukee's Best, if price is your only factor. Bottom line is, whether Fat Tire is made here or not will have little impact on prices or customer choice. Whether tax breaks should be offered is a whole other story.
Well said. None of the breweries in operation received major tax breaks to set up their business here.
Good points…but it drives me batty that so many people spell Bele Chere incorrectly. It's BELE Chere, not BELLE Chere. Sheesh.
As someone who sits on some of those "downtown committees," I can assure you there's not a bidding process and we go out of our way to give local brews the spotlight even though they cost a lot more than national brands. It has a lot to do with the fact that we think they taste great, but even more to do with the mission of most of the organizations referenced. We are community members giving our time (often taking vacation days) to plan and execute these events. The "pay-to-play" virus is actually just modest fees needed to produce events of the caliber of LAAFF, Downtown After 5, and Bele Chere. (I spelled that last one correctly.) Personally, this sounds like a poor response from a mediocre marketing person at a mediocre brewery. (We do have a couple of those.)
Councilman Jan Davis is in the tire business. He's worked long and hard to build his business, probably with no assistance from the City or County. He's hired folks, probably pays good wages. Pays property taxes, too, I'll bet.
So it's essential that the City or County give $3 million to somebody so they can open up a tire store right next door to his.
Bill Russell runs an insurance agency. Probably improved the property his offices are located at, probably pays good wages, property taxes, business license fees.
So it's important for the City or County to give $3 million to somebody so they can open an agency here to compete with him.
Bill Stanley used to run a barbecue restaurant a stone's throw from Pack's Tavern, and it's a shame the city or county didn't pony up $3 million and get some Sonny's franchises up in here.
I'm sure we can go through the sources of income for every City and County elected official, and make certain that their tax dollars are used to subsidize companies that will compete with them.
I mean, fair's fair.
Some folks may not have lived here long enough to remember what the Wedge building, the French Broad building, Asheville Brewing's buildings, Craggie's building, and other buildings currently housing breweries looked like before the brewers moved in and sunk tons of cash into renovations and code compliance. It's public record though: You can look at the tax records. County tax receipts from every single property housing a brewery here are much, much higher than they were before the brewery moved in.
And, lest I flog this horse too thoroughly, it's self-evident that local breweries are paying taxes on the improvements they made.
And, the taxes they paid are going to be handed over to an out-of-town brewery that desperately needs to identify with "Beer City" in order to keep their brand looking funky'n'friendly. When, in fact, they're neither. They are a big, aggressive, national brewer, closely allied with the Anheuser-Busch distribution network in many markets, not above giving away beer to get that handle, known to buy up every sponsorship and promotion in sight.
So, fair's fair: Any council or commission member who owns a restaurant needs to have a taxpayer-subsidized McDonald's' or Wendy's right across the street, anybody who sells clothes for a living needs a taxpayer-funded Gap nearby, etc.
Common wisdom in the brewing business: Beer is extremely heavy and expensive to ship, energy costs will increase, and brewing will, in time, become a local-regional business, with the size of a brewer's territory pretty much determined by the quality of the product they make. New footnote to the common wisdom: Unless some government officials take money from small, local brewers and give it to big, monster brewers.
With "economic development leadership" like this from our elected City and County officials, it's no wonder that brewing is currently Asheville's biggest homegrown manufacturing payroll. The brewers were the only ones dumb enough not to realize that the city and county would hose them the first chance they came across.
They aren't going after Asheville Taps or Breweries. They are brewing for east coast distribution. They will help and bring more attention, people, dollars for everyone. They are not after Asheville's small saturated market! Where they will hurt local breweries is by hiring away talent.
Believe me, I am all about the local breweries, and support them on a regular basis. Please don't see me as a cheerleader for New Belgium. While I agree with most of your points, especially gaining tax breaks to develop a brewery in this area, and who gets the good jobs, I doubt that we will be seeing $5.99 Fat Tire six packs any time soon. Price checks in Colorado show it $7.99. Part of New Belgium's want of a new brewery is that they are at full capacity in their current operation, and want an eastern location to serve the east coast markets. I really don't think New Belgium is guilty of predatory pricing, as once the price is down, it can't go back up.
Sounds a bit paranoid. I think competition is good for everybody. People in Asheville are loyal to their brands as long as the price is right. Competition will keep the prices in check. As for festivals? If you can't afford the fees then you need to rethink your business plan or maybe just get out of the biz all together. Everyone knows there are fees and that they will most likely go up in the future so why wasn't that written into your business plan?
It seems to me very knee-jerk to lambaste the possible arrival of a company like New Belgium at such an early stage without considering the larger picture. Yes, they would create jobs. Yes, they would pump money into the local economy. Of this there is little doubt. And it is true that their arrival would have an effect on the local brewing scene as well. But consider this…would that effect necessarily be wholly negative? Was our economy not built on the backs of enterprises which competed in the marketplace? True…incentives might create a less-than-level playing field. But I believe that it shows remarkably little faith and optimism for the local brewing industry and very little belief in the creativity and drive of those who own and mange smaller, existing breweries to assume at first blush that a big dog moving onto the block will cause for them to all stay under the porch. Might the arrival of New Belgium not cause smaller players to become even more creative and innovative in their practices? Hmmmm. Consider this…in every US community with a craft-beer scene, there are distributors for the major multi-national brewing firms (AB, SAB, etc). These entities spend massive amount to promote their products. Yet somehow, in little ol' Asheville, Bud is not necessarily the King of Beers. Could it be that there is just a little too much panic in the air? Insulting or no, the county is trying to aid job creation in a climate in which everyone knows that this is issue number one. Perhaps we should all realize that, despite wishes to the contrary, we are part of a larger world, and sometimes we have to let the big kids into the sandbox so that we can learn to stand tall, and so that we can share our toys.
Well said RP. The local breweries spent a lot of time, money and hard work in making the Asheville beer scene what it is and this will undermine their collective efforts in a big way.
Stop preaching doom, competition is always good and It is a free market economy not to mention I would by Fat Tire over a Highland product anyways.
Should I buy a steak at The Moose Cafe over the Outback just because they are local? I think not.
Don't get me wrong, I like a lot of the local brews ( I love a Green Man ESB) but one national player is not going to kill off "Beer City", It's just going to make it stronger.