True to the title of the presentation, “The Many Faces of Rotgutzen: The Not-So-Comic Nemesis of Independently Owned Businesses,” Dave Thibodeau, co-owner and president of Ska Brewing Co., delivered a witty yet somber presentation at the Green Business Roundtable on Wednesday at the Henry Strater Theatre, closing GBR’s season.
The presentation centered around Ska’s comic, “Tales of the Legion of Ska,” a creative representation of Ska’s origin story in which three naïve punk kids (Ska founders Thibodeau, Matt Vincent and Bill Graham) take on corporate beer giant Rotgutzen (a metaphor for Budweiser parent company Anheuser-Busch). In the 1990s, with the corporate brewery on a mission for “world domination,” gobbling up the “little guy for breakfast ... like a sausage made of hopes and dreams,” and despite having taken a crushing beating, the independent business came out victorious in this David-versus-Goliath-esque tale. Alas, Thibodeau foreshadowed, that “was only the battle, not the war.”
The metaphorical Rotgutzen has many faces, and two decades later – in true Batman-villain form – corporate giants are once again making their ascent. Thibodeau said “a radically new kind of monopoly” is posing a serious threat to Durango’s independent businesses.
Independent businesses are being devoured by the titans nationally and globally. “Google, Amazon, Apple, Facebook and Microsoft have together acquired more than 500 companies in the past decade,” he said.
Even in the beer industry, powerful mergers beginning in 2008 have created a colossal duopoly: SAM Miller (Molson and Coors) and Anheuser-Busch InBev, control 90% of the market. The later union has become the world’s largest brewery, consuming craft breweries such as Breckenridge Brewery, Elysian Brewing Co. and Four Peaks Brewery as it grows.
Thibodeau said 50 years ago, a monopoly like this would not have happened.
“It comes down to antitrust laws ... we have been here before,” he said, drawing a parallel to John D. Rockefeller and the Standard Oil Trust.
In the late 1800s and early 1900s, the Supreme Court ordered the Standard Oil Trust be broken up and dispersed. Standard Oil controlled 90% of U.S. refineries and pipelines. Through methods such as predatory pricing, it either crushed or purchased their competitors – they had “enough vertical integration” to allow for “one company ... (to) control the entire industry” Thibodeau said. The Sherman Antitrust Act was then established to disallow any merger that restrains trade.
After the dissolution and establishment of antitrust laws, court cases between the 1940s and 1970s began to swing the pendulum, he said, and the metaphorical Davids won every case.
In the 1970s, something happened to make the “pendulum” swing to the other extreme, Thibodeau said. Namely, Robert Bork and his book, “The Antitrust Paradox,” which essentially claims antitrust laws were countering their own intention and “punishing competitiveness.” Guidelines under the Regan administration were established to shift the focus onto the consumer, lowering prices, and allowing mergers so long as they supported low prices.
“Now,” he said, “Goliath wins every time.”
Thibodeau paralleled Rockefeller with Jeff Bezos, Amazon’s CEO. With roots as an online book retailer, Amazon has evolved into not just a retailer but a book publisher, a delivery and logistics network, a payment service, a marketing platform, a grocer and a leading producer of cloud server space and computing power.
The titan of commerce has built itself from the predatory pricing, giving the independent businesses an infertile platform upon which to take the risks, so Amazon can collect data and mine its benefits. In turn, manufacturing their own items, lowering prices below cost and marketing over the small businesses products, this results in small businesses being crushed or bought out.
Thibodeau made a reference to Amazon’s acquiring of its major competitor Zappos through predatory pricing.
This conflict of interest is also displayed in the purchase of RateBeer and Northern Brewer by ZX Venture, a branch of Anheuser-Busch InBev.
Independent businesses, among other things, create higher incomes, decrease inequality, fuel jobs, create more tax revenue and create a sense of community, he said.
He quoted author and co-director of the Institute for Local Self-Reliance Stacy Mitchell: “The true value of having a vibrant local economy isn’t just in the bottom line of small businesses and the specific jobs they create. It’s also the notion that place matters.”
Thibodeau highlighted Maria’s Bookshop as being exemplary of this place, and sense of community. “You can feel the warmth when you walk in there,” he said.
He closed with a few suggestions of ways to take up arms against Rotgutzen in defense of independent businesses: communicate with elected officials; going to the Local Policy Action Toolkit; support local businesses that keep dollars local and foster community; drink (local) beer; and pause to think before clicking “purchase.”
After the presentation, Cory Kerns, a local solar worker, said the topic was “not what he expected, but an important discussion for any community to have as technology allows the creation of powerful monopolies.”
The Payroll Department’s Jessie Christiansen, said Amazon’s monopoly “is right in everyone’s faces and no one sees it ... we don’t realize its there.”
Peter Schertz, owner of Maria’s Bookshop, said Thibodeau’s presentation had a fantastic message. “It’s not just about shopping local, it’s about shopping at independent businesses.”