29 November 2016

Here’s the introduction to the article.

We suggest linking through if F&B, Food Regulation, Branding etc is your area of speciality.

The best piece we’ve yet read on the subject

US drinks industry ponders effect of cannabis legalisation

As legal use spreads some groups fear a competitive threat, others spy an opportunity

This Thanksgiving, Californians may have been tempted to include an additional ingredient in their pumpkin pies. Marijuana was legalised in the US’s most populous state this month, reflecting a mellowing of social attitudes towards the drug.

Alongside the presidential election, five states voted on whether to legalise the recreational use of cannabis, with Maine, Massachusetts and Nevada, voting in favour, along with California.

But one sector is watching the spread of legalisation with a degree of trepidation: the $200bn US alcohol industry. Though alcohol and weed might seem eminently compatible to some, a number of brewers fear cannabis as a competitive threat, with some industry groups going as far as contributing funds to anti-legalisation campaigns.

Boston Beer Company, the largest craft brewer in the US with brands that include Samuel Adams and Angry Orchard cider, said the widening legalisation of marijuana posed a risk to its sales.

“It is possible that legal marijuana usage could adversely impact the demand for the company’s products,” argued its regulatory filing in February. The Massachusetts-based brewer added: “We also believe that impacts the craft beer industry.”

In Massachusetts, the Beer Distributors’ PAC, an industry body, donated $25,000 this year to a campaign group fighting legalisation.

Trevor Stirling, analyst at Bernstein says it is understandable that Boston Beer — which makes almost all its sales in the US — would list legalisation as a risk factor, whereas the large international brewers, such as Anheuser-Busch InBev, the Budweiser brewer, do not.

“Craft beer tends to appeal to a younger and more hipster crowd who are also more likely to be smoking cannabis,” he said. “Whereas a typical Budweiser drinker — a blue collar industrialised worker — is less likely to smoke cannabis, so potentially there’s more risk for craft beer than for mainstream beer.”

Other drinks groups are also concerned. Brown-Forman, the Kentucky-based distiller of Jack Daniel’s whiskey, lists “the potential legalisation of marijuana use on a more widespread basis within the United States or elsewhere” as a risk factor in its accounts. The company declined to comment further.

Attitudes across the industry are not uniform, however. When the Sacramento-based California Beer and Beverage Distributors group donated $10,000 in 2010 to fighting legalisation in the state, brewer Sierra Nevada, an associate member, publicly objected, saying it had not been consulted and that it was neutral on the issue.

“People have the obligation to choose what is right for themselves without influence from outside interests,” it said.

Read the full article at https://www.ft.com/content/f72c1f00-b254-11e6-a37c-f4a01f1b0fa1