Show notes
Craft Beer News – 11/23/18
Artisanal Brewing Ventures Execs Discuss ‘100 percent’ Acquisition of Sixpoint Brewery
After four years of discussions with Sixpoint Brewery founder Shane Welch, Artisanal Brewing Ventures (ABV) finally completed a deal to purchase 100 percent of his Brooklyn-based craft brewery this week.
Even though ABV had been courting Sixpoint for several years, it wasn’t until this summer when negotiations really began to heat up, John Coleman, CEO of ABV, told Brewbound.
As the deal came together, ABV — which is backed by family office Ulysses Management and was formed in 2016 via the merger of Victory Brewing and Southern Tier Brewing — turned to Wells Fargo to help finance the acquisition.
Coleman declined to share specific financial terms of the transaction.
Unlike ABV’s partnerships with Victory and Southern Tier, whose founders have remained involved in the businesses they started, Welch is exiting the company he founded in 2004 to focus on other “craft beer-related businesses,” including a smartphone app that helps facilitate direct-to-consumer sales at breweries.
Although ABV’s past strategy has focused on retaining its partner breweries’ founders, the company decided it needed to be more flexible when it came to Sixpoint, Paul Barnett, managing director of Ulysses Management, told Brewbound.
“Shane has a lot of other outside interests, which he’s passionate about,” he said. “He struggled with the idea of the obligations that are inherent in being an active founder partner like Bill [Covaleski] and Ron [Barchet of Victory] and Phin [DeMink of Southern Tier].”
Now, Sixpoint brewmaster and chief product officer Eric Bachli will lead the company. Last year, Welch hired Bachli away from popular Massachusetts craft brewery Trillium Brewing.
According to Coleman and Barnett, Sixpoint was an attractive acquisition target for ABV due to its geographical presence in New York City, where the brewery sells more than half of its volume, as well as its alignment within the Sheehan Family network of wholesalers.
“We think there’s a lot of growth potential in metro New York as well as all of the surrounding areas,” Coleman said. “And from a brewing standpoint, the brands are all very complimentary with Southern Tier and Victory brands.”
According to Coleman, Sixpoint is on pace to produce 55,000 barrels of beer by the end of 2018. The company did not report production figures to the Brewers Association last year, but in 2016 it reported production of 74,500 barrels.
Finally, Barnett and Coleman said ABV isn’t done buying, and they mentioned a focus on breweries located in the Mid-Atlantic, Northeast and Southeast regions of the U.S..
“The east of the Mississippi geography we find is really an attractive market,” Barnett said.
TTB Accepts Offer for Trade Practice Violations
TTB and Elgin Beverage Agree to $325,000 Offer in Compromise
The Alcohol and Tobacco Tax and Trade Bureau (TTB) yesterday announced the acceptance of a $325,000 offer in compromise from Illinois distributor Elgin Beverage Co. for alleged violations of tied house provisions.
Elgin, based in Bartlett, about 35 miles from Chicago, distributes products from Constellation Brands, Pabst Brewing and FIFCO USA, among others.
In a press release, the TTB said Elgin had “aided and abetted another industry member in the use of a third party to pay retailers to carry and promote their products.”
The pay-to-play scheme, the TTB argued, gave Elgin an “unfair advantage” in the marketplace.
“TTB remains committed to putting an end to anti-competitive practices that hurt law-abiding businesses and prevent consumers from enjoying a wide selection of products,” the agency wrote.
Earlier this month, the TTB issued an industry circular reminding alcohol...
Artisanal Brewing Ventures Execs Discuss ‘100 percent’ Acquisition of Sixpoint Brewery
After four years of discussions with Sixpoint Brewery founder Shane Welch, Artisanal Brewing Ventures (ABV) finally completed a deal to purchase 100 percent of his Brooklyn-based craft brewery this week.
Even though ABV had been courting Sixpoint for several years, it wasn’t until this summer when negotiations really began to heat up, John Coleman, CEO of ABV, told Brewbound.
As the deal came together, ABV — which is backed by family office Ulysses Management and was formed in 2016 via the merger of Victory Brewing and Southern Tier Brewing — turned to Wells Fargo to help finance the acquisition.
Coleman declined to share specific financial terms of the transaction.
Unlike ABV’s partnerships with Victory and Southern Tier, whose founders have remained involved in the businesses they started, Welch is exiting the company he founded in 2004 to focus on other “craft beer-related businesses,” including a smartphone app that helps facilitate direct-to-consumer sales at breweries.
Although ABV’s past strategy has focused on retaining its partner breweries’ founders, the company decided it needed to be more flexible when it came to Sixpoint, Paul Barnett, managing director of Ulysses Management, told Brewbound.
“Shane has a lot of other outside interests, which he’s passionate about,” he said. “He struggled with the idea of the obligations that are inherent in being an active founder partner like Bill [Covaleski] and Ron [Barchet of Victory] and Phin [DeMink of Southern Tier].”
Now, Sixpoint brewmaster and chief product officer Eric Bachli will lead the company. Last year, Welch hired Bachli away from popular Massachusetts craft brewery Trillium Brewing.
According to Coleman and Barnett, Sixpoint was an attractive acquisition target for ABV due to its geographical presence in New York City, where the brewery sells more than half of its volume, as well as its alignment within the Sheehan Family network of wholesalers.
“We think there’s a lot of growth potential in metro New York as well as all of the surrounding areas,” Coleman said. “And from a brewing standpoint, the brands are all very complimentary with Southern Tier and Victory brands.”
According to Coleman, Sixpoint is on pace to produce 55,000 barrels of beer by the end of 2018. The company did not report production figures to the Brewers Association last year, but in 2016 it reported production of 74,500 barrels.
Finally, Barnett and Coleman said ABV isn’t done buying, and they mentioned a focus on breweries located in the Mid-Atlantic, Northeast and Southeast regions of the U.S..
“The east of the Mississippi geography we find is really an attractive market,” Barnett said.
TTB Accepts Offer for Trade Practice Violations
TTB and Elgin Beverage Agree to $325,000 Offer in Compromise
The Alcohol and Tobacco Tax and Trade Bureau (TTB) yesterday announced the acceptance of a $325,000 offer in compromise from Illinois distributor Elgin Beverage Co. for alleged violations of tied house provisions.
Elgin, based in Bartlett, about 35 miles from Chicago, distributes products from Constellation Brands, Pabst Brewing and FIFCO USA, among others.
In a press release, the TTB said Elgin had “aided and abetted another industry member in the use of a third party to pay retailers to carry and promote their products.”
The pay-to-play scheme, the TTB argued, gave Elgin an “unfair advantage” in the marketplace.
“TTB remains committed to putting an end to anti-competitive practices that hurt law-abiding businesses and prevent consumers from enjoying a wide selection of products,” the agency wrote.
Earlier this month, the TTB issued an industry circular reminding alcohol...
