The Mikkeller Distribution Debacle - an official response
As you probably now know, Brewdog have exclusive UK importation and distribution rights for Mikkeller beers. A few of us on Twitter noticed that a fair few online shops are no longer stocking Mikkeller beers as now that Brewdog are importing the price has been hiked up in comparison to when they were able to buy and import direct from Mikkeller.
Now I was a bit hasty on slagging Brewdog off, as I always am because I like ranting. I really should’ve gotten all of the facts first but I’m bloody useless. Rob from Hopzine was also very hasty in blogging about it so the response is targeted at him too. My buddy Luke now runs Brewdog’s online shop and he told me to contact Martin Dempster to get more of an insight so I thought I’d share my email and his response.
What I said:
“Basically, Brewdog now has exclusive rights to import and distribute Mikkeller beers in the UK and we've noticed that since you've taken control, the prices of Mikkeller beers on your online shop are considerably higher than they were priced elsewhere when other retailers were able to buy direct from Mikkeller. Following on from this, since Brewdog has taken control of Mikkeller beers quite a few retailers I buy from have decided to stop stocking Brewdog beers due to the fact that they'd have to sell Mikkeller beers are a considerable mark up to what they previously sold them for.
So my question to you is...
What exactly does Brewdog hope to gain by taking total control of Mikkeller importation and distribution in the UK? and What are the benefits to consumers?”
Martin’s response was very concise and proved that there are benefits to retailers and consumers (but not to him!). See below (skip to the bottom for key points if you don’t have time to read all of this):
Just wanted to clear up a few things here. Unfortunately your post and the recent exchanges on Twitter are simply not accurate for a number of reasons.
1) Since we took over distribution of Mikkeller in the UK - supply into the UK market in volume terms has increased markedly.
2) When we took on this deal, the cornerstone of the whole thing was an on-trade project we had with Mikkeller in London - unfortunately some misguided licensing decisions have meant that this project has been substantially delayed - this is all in the public domain now. If this had worked out we would have been bringing in even more Mikkeller to the UK already, increasing selection and minimising on logistics costs for everyone.
3) On pricing, we are doing nothing ground breaking or under handed here. We apply a standard industry margin for our wholesale customers. On the retail side (online and bars), we again apply a standard margin. Nothing under handed, just standard industry stuff. Mikkeller is always going to be expensive - it has to travel from where it is brewed (sometimes as far away as Alaska) back to Denmark then to the wholesalers warehouse and then to the customer. It is always going to be expensive.
We are brand new to distributing third party brands - i'm not going to lie, it has been a learning experience and we are always looking to improve what we do, both in terms of customer service and value for money. Even if we do find your feedback overwhelmingly negative, it is valued and listened to.
4) We do not pick and choose who we supply to. We will happily supply anyone who wants the beer. We have two main routes to market - one for pallet customers who buy pallet quantities of BD and Mikkeller direct from our Brewery, and direct delivery customers who we supply direct into via our own vehicles - these services are operating throughout Scotland and within the M25. We are looking to expand this service to other parts of the country.
5) We don’t have an exclusive distribution deal with To Øl - we just buy some of their beer. Mikkeller wholesales To Øl globally and we buy it from them. I'm not spending my days complaining that Mikkeller is taking a cut - this is just how the industry works.
6) Mikkeller is now in loads and loads of new outlets that it wasn’t before - yes there are some previously direct customers that may find it a bit more expensive but they also no don’t have the overheads relating to importation, excise duties and transport - that’s now my headache! They can also buy as little as one case - they don’t need to buy a whole pallet and take the risk on holding that much stock - that again is now my problem!
7) I acknowledge we have had too few Mikkeller beers on the online shop in the last few weeks - thanks for the feedback on this. We have added a lot of new staff to our team recently and we have a massive new brewery to run - every day throws up lots and lots of challenges and this area has been massively under-resourced until very recently. I have taken this on board and I have put in place something today that will make sure our online shop gets a great selection. On pricing - K:rlek 3 was a mis-price - this has now been fixed. Sorry about that.
8) BeerGuru – if your friend is charging has £9.75 for that beer on our pricing he must be making a gross margin of at least 71%. That’s an amazing margin on anyone’s book. On £6.75 he’d make 58% - again a solid margin.
So there we have it. I was very hasty in bitching about Brewdog but really they’re only trying to make it better for everyone in the long run.
1) Originally set up to mainly facilitate the Mikkeller/Brewdog Bar that never was
2) Brewdog is still learning about 3rd party distribution
3) Yes, beer is now slightly more expensive but as well as import, hauling, warehouse space etc. Brewdog still has to make a profit. It’s up to retailers if they want to pay this mark up
4) To Øl is not included in the deal (hooray!)
5) It’s easier for smaller retailers to get their hands on just a small selection of Mikkeller beers as they don’t have to buy an entire pallet
6) Luke is working on getting more beers onto the online shop
7) Some retailers will massively overcharge and that’s not the distributors fault
I’m really glad I emailed Martin because, with helping to launch 24Beers, I really need to get a better understanding of how the beer industry works in order to be able to help Ben sell beer to the masses.
I really do need to work on bitching about things before I’ve had all of the facts but it’s just too easy to do.
Many thanks to Martin for replying to me so quickly!
If you have any further questions, let me know and I’ll forward them on and post responses.