Thursday, April 16, 2009

My Yuengeling, My Yuengeling

As we have said all along, the expanded bottle bill will lead to the destruction of smaller beverage companies in New York State-and the process may have already begun. As Beer Business Daily reports: "Yuengling Will Pull Out of New York if UPC Law is Passed." What this means for this popular niche brew, is that it can no longer justify selling its beer in New York with the added expense that the new bottle law mandates.

As Yuengling's manager told BBD: "Pat Pikunas wrote to BBD in an email that if these laws become effective (without being amended, which there is some talk of), then Yuengling is fully prepared to withdraw their products from the state of New York. You heard that right. Writes Pat: "I can tell you that Yuengling will be one brewery that will not comply with this provision in the legislation. In fact, we have discussed internally and come to the decision that we will pull our products for sale completely in the state, if we are forced legally to comply with NY specific UPC requirements. We realize that the potential implications of this decision are far reaching and large, but feel it would be necessary given the issues it creates. "

What's more foreboding even, is that there will be scores of small beer brands, water distributors, and soda bottlers who want to do business in NYS, but will find that the extra costs are not worth the effort-something that the folks at Good-O Beverage have already told Senator Espada who represents the neighborhood were the Hispanic brands are bottled.

As Martin Salo, Good-O's vice president, told the senator:

"Good-O Beverage Co is trying to digest the devastating impact that the passage of the Expanded Bottle Bill represents. Given the nature of these impacts, a number of options are under consideration. They are:

"1) Layoffs and the scaling back of our NY operations;

2) Withdrawal: Selling product entirely in the state of New Jersey because of the burdens imposed by this bill. This would necessitate closing our Boone Avenue facility (where we have been for 50 years) and move to New Jersey to concentrate on our "Out of Town" business sales in other states where our products are also sold and where severe regulatory burdens are absent;

3) A total sale and shut down of our brands, business and operations in NY and elsewhere."

The Alliance has begun to reach out to all small beverage companies that find themselves in Good-O's dire position. Every company that we've talked to tell us that the June 1st deadline is totally absurd-no one can retrofit their containers and labels to comply with that inception date. In addition, all of the folks we talked to said that the extra expense would make it difficult for them to sell affordable beverages; and that at the end of the day, the larger beverage companies would have an added advantage.

It should also be pointed out, that all of the water companies need time to devise a collection and redemption system for their empty containers. Unlike beer and soda, these firms deliver their products through food distribution warehouses, making back hauling impossible. Third parties will have to be retained, and a system put into place-something that can't be done in the available time frame.

Something's got to give here; and the clueless folks who engineered this fiasco-like out friend Laura Haight of NYPIRG-really were without any idea about how impractical the expansion format really is. We expect that there will be changes forthcoming. If not, there will be total chaos.