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  • Minimum pricing

    Some of my investors want me to enforce a minimum price for our beers that are distributed locally to bars and restaurants. Can we do this? Is it a good idea?


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  • #2
    Okay so this is NOT sound legal advice and I'm NOT qualified to speak on this subject:

    Minimum pricing (aka "Minimum Resale Price Maintenance", "Price Fixing", or "Horizontal Price Restraint") is pretty much outlawed in the United States. This is under the Sherman Antitrust Act and it's vigorously enforced. There are a few exceptions - generally at the state level for specific products i.e. cigarettes.

    On the other hand, so-called "Vertical Price Restraint" such as MAP (minimum advertised pricing) and the use of limited/exclusive dealer areas can be used.

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    • #3
      As usual, more info is needed. Are you distributing or is there a distributor? Your PTW should take care of pricing. No one is going to work on smaller margins than normal. You can't set the retail price, but your price model should pretty much disctate where you will end up on the shelf. Figure 35% margin for distributor and 28-35 for the retailer.

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      • #4
        Originally posted by BeerBred View Post
        As usual, more info is needed. Are you distributing or is there a distributor? Your PTW should take care of pricing. No one is going to work on smaller margins than normal. You can't set the retail price, but your price model should pretty much disctate where you will end up on the shelf. Figure 35% margin for distributor and 28-35 for the retailer.
        We are self distributing, to bars and restaurants only. Kegs only.


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        • #5
          Do they mean a minimum price per pint at the bar?

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          • #6
            Originally posted by BeerBred View Post
            Do they mean a minimum price per pint at the bar?
            Yes. They are worried that people won't come to the brewery if they can get a pint cheaper somewhere else.


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            • #7
              Sounds like your investors don't know squat about the business. Much like many new little breweries. How much are you pricing your kegs at, what size are they and how much is a pint of same brand in your tap? No bar is buying craft to sell it cheap. People come to your brewery to see the brewery. You def can't control your customers pricing, but the concern should not arise anyway.

              I could see an issue with your bars not buying if they perceive you as a threat to their business. I.e.; you're in the same neighborhood, serve door, have bands or otherwise open all night competing with them.

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              • #8
                Originally posted by BeerBred View Post
                Do they mean a minimum price per pint at the bar?
                Yes. They are worried that people won't come to the brewery if they can get a pint cheaper somewhere else.


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                • #9
                  Originally posted by Sawmill View Post
                  Yes. They are worried that people won't come to the brewery if they can get a pint cheaper somewhere else.


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                  I agree that your investors don't seem to really understand the craft beer industry or the craft beer consumer. I can't think of a single instance where i avoided going to visit a local brewery because (as i sat on a barstool in a pub) i thought, "Hey, the beer is $.50 cheaper here, why bother!?" I'd explain to them its the experience of visiting the brewery and having a pint _ feet away from where its made, or chatting with one of the brewers that is worth the visit. If they are worried about people not visiting the tasting room, I'd counter with suggesting a new social media campaign, or tasting room specials. Maybe a trivia night, etc.

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