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Industry assesses itself in wake of Stroh decision.

Industry assesses itself in wake of Stroh decision

More than a week after the Stroh Brewery Co. dropped a bomb terminating 300 positions within the company, industry officials nationwide have only just begun to sort through the debris of questions that the monumental decision has left behind. Perhaps the biggest puzzle on most people's minds has been, "What next?"

Stroh answered one question almost immediately last week by implementing a "brokering" system in California. However, one Stroh wholesaler reported that this plan would only involve brewery representatives who will make "sales calls," while all other functions of the wholesalers will remain intact.

The wholesaler, who wished not to be identified, could not predict whether Stroh will spread the use of "brokers" nationwide, especially to those states with large grocery store chains as had been the speculation. But Mark Rodman, former general counsel, National Beer Wholesalers Association, and wholesaler consultant, does not see any legal problem with the shift. While there will be some probable lawsuits by wholesalers, Rodman noted, "if Stroh wishes to change its methods of distribution, it is free to do so."

Additionally, Stroh would not be the first brewer to move away from the wholesaler practice. Anheuser-Busch, Inc. sells direct in markets where it owns distributorships, Rodman said, including Boston and New York.

Rumors fly

In the meantime, rumors and speculation continue to spread, while at Stroh--where "morale is down the toilet," according to one worker--employees must wait to see what the brewer has up its sleave.

"It certainly is a very disturbing situation, especially since we think that we do a good job for the brewer," said one Florida Stroh wholesaler, who asked not to be named. "This is kind of like waiting for a hurricane since you don't know which way the wind is going to blow."

The Florida wholesaler added that his state system has remained "pretty much in tact," although district managers will now assume the responsibilities of national account representatives, who have been removed.

Ron Rumbaugh, president, NBWA, explained that Stroh's decision "tends to weaken the three tier system--the most efficient system in the world."

The president added, however, that there is too much speculation "for the NBWA to take any steps to help the wholesalers."

Another wholesaler in California, directly affected by the "broker" system, agreed that the situation does not look very good, but added that Stroh has had a problem for some time.

"Stroh is on the way out. Period," said the wholesaler. "I can understand Peter Stroh's situation since it's his name on those bottles and he's trying to do anything he can to keep from going under."
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Title Annotation:Stroh Brewery Co.
Publication:Modern Brewery Age
Date:Sep 25, 1989
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