Kroger’s Plan to Change How It Stocks Booze Is Bad News for Beer Makers

By Mike Pomranz |

© Quynh Anh Nguyen / Getty Images

Shelf space is a big issue for beer companies: Beer drinkers can’t buy what they can’t see, or what isn’t even there at all. And now with so many breweries and so many different products, the fight for grocery shoppers’ eyes is as contentious as ever. Finally, however, it appears both macro- and micro-brewers have found common ground on the topic. Everyone seems enraged by grocery chain Kroger’s proposition to shake up its alcohol stocking process.

Kroger has announced they want to enlist the help of a third party to handle this dirty work—a company called Southern Wine & Spirits who, according to the Wall Street Journal, would handle market analysis and shelf recommendations. Big beer (the Anheuser Buschs and Millers of the world) is unhappy about this change because, currently, its members providing those recommendations thanks to their titles as “category captains.” But according to a Kroger spokesman, this decades-old system is too cumbersome. "Our goal is to better respond to customer needs and more quickly bring new, innovative adult beverages to market,” he said.

That sounds good for smaller brewers, right? Not so fast. Kroger still wants breweries to be the one footing the bill on this research, so Southern is requesting that beer brands pay “voluntary” fees for their services. For most people, that sounds like a pay-to-play scenario. “For a start-up company, good luck trying to get into Kroger with this plan,” said Paul Gatza, director of the Brewers Association, an advocate for craft brewers. For their part, Southern insists brands who don’t pay won’t be “adversely affected”—which raises the question: Why would anyone pay?

Not to be outdone, many regulators are displeased with the proposed switch as well. Since Prohibition, laws have existed preventing alcohol brands from trying to entice retailers by giving them anything of value. Kroger claims their plan circumvents these laws because they aren’t getting the fees, Southern is. Still, Ohio’s Division of Liquor Control has already spoken skeptically of the plan.

In the end, plenty of people in the beer world will tell you that the current system for stocking grocery shelves is flawed and should be overhauled. However, it appears none of them believe this is the way to do it.

[h/t Money]

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