Everyone here at the Roe Law Firm would like to wish our readers in the United States a very Happy 4th of July! Given the high number of barbeques held nationwide today I will write about a something that is likely at many of them, beer.

During a discussion with a friend recently, they posited that it was impossible to tell what company makes a particular beer anymore. What resulted was a discussion regarding microbrews and how we determine if the beer we are drinking is actually a microbrew and if so why is that better.

First, many small breweries are owned or have been acquired by larger companies. Take the Widmer Brother Brewery (9th largest brewing company in the US), in Portland Oregon; not many know that this brewery is partially owned by Anheuser-Busch.

The same is true in the liquor industry, i.e., a parent company owns a subsidiary and labels the product with the smaller subsidiary name. Well, how is this possible? Is there no truth in advertising? I like to drink small run beer and liquor, so how can I know if it’s a small company or not? Many also ask whether there are labeling laws, which would require a parent company to be listed on the label. The answer the latter is, no and to the former the answer is that you must become an educated consumer. The laws in the United States do not require a parent company to be listed on the label of an alcohol product.

The reasons for this are because a company (corporation) in the United States is treated as a legal person. As a consequence, a parent company can (just as an individual is permitted) purchase the controlling interest in another company (thereby making it a subsidiary). The subsidiary is a separate legal entity of it’s own right and may label under its own name regardless of who owns the company. However, whether a beer is considered a microbrew is another story altogether.

Boston Beer Company is not only a microbrewery, it’s also the fifth largest brewery in the United States, behind only Annheuser-Busch, MillerCoors, Pabst Brewing Company and D. G. Yuengling and Son Inc. The part about being a microbrewery might be short lived, however, especially if the folks behind Sam Adams continue to expand their beer’s national popularity. When the brewery’s production exceeds two million barrels a year, the Beer Association will officially strip Sam’s brewers of the “micro” title.

Which raises the question of what really makes a microbrewery special? Is it really just a function of the amount of beer brewed? Or does it have to do with company ownership? AC Golden is an interesting case on this latter point. The brewery is a small subsidiary of MillerCoors, but its four person staff only brews tiny batches of unique beers for limited local distribution.

Still, it cannot be classified as a microbrewery because of its corporate parent. Is that fair? The tiny brewery enjoys certain competitive and marketing advantages: six weeks after introducing Colorado Native Lager, the beer was available in over 600 establishments, a feat made possible by MillerCoors broad distribution system. Additionally, the brewery’s much larger parent reserves the right to buy any successful recipes and turn them into mass market products.

I’m not sure how I feel about all this. On the one hand, I feel like the true measure of microbrewed beer is the quality of the product. If Boston Beer Co. can keep making great beer after two million barrels, I won’t think any less of them. And if AC Golden comes up with innovative, high quality brews, I could care less who bankrolled its start-up. On the other hand, I think about the parallels in the food industry, and wonder if a harder line might make sense. After all, what we’ve seen in the food world is that although not all, small food is good, most genuinely good food is small. There’s some sound reasons to define small producers in a meaningful way, including making sure that the limited resources available to support these producers go to those who actually need them.

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