We Need to Talk about the Secondary Beer Market

Beer has gained a lot of popularity recently, and it goes much deeper than the average customer can even imagine. Many beer drinkers are completely content with going to their corner beer store, picking up a mix-and-match six pack, and drinking it at home. Others, though, stand in lines at breweries, push the limits of how many beers they can purchase, try to get into the line as many times as possible with as many “mules” as possible, and then take to the internet to unload their acquisitions to the highest bidder.

And this behavior is not okay.

Don’t get me wrong; if you go to these releases, buy your allotment after going through the line once, cellar your beers, and drink them throughout the year, you’re not who I’m talking about here. Cellaring beers is a long-held tradition throughout the world, and I even have a cellar for myself to see how beers transform as time passes.

The people I’m talking about have zero intention to drink every beer bottle they purchase at rare beer releases. (Hell, they may not even drink any of them, opting to try it on draft.) Instead, they take to private Facebook groups and other beer trading websites, place a value on the beer that only a handful of people have tried, and unload their beer at a profit–either for more beer or cold hard cash.

For some, trading is the way to go. What this means is that two parties agree to send each other certain beers of similar value. Sometimes, people do this with beers simply outside their distribution, and they don’t end up making a profit. But there are others who collect rare beer, and they look to trade their bottles for other hard-to-get releases, sometimes to simply flip those beers as well.

And, trust me, I get why this is appealing; I love trying new beers, seeing how brewers are pushing the limits. With Untappd and other beer rating websites, however, beer has turned into a “catch ’em all” game where some people won’t even drink a beer if they’ve had it before, and they’ll rate countless beers with a single ounce sample. Some people have started to take it too far, trying to collect the rarest of the rare to boost their numbers on these apps. More often than not, it’s these people who populate the black market of beer.

In the hunt for more bottles to have as trade fodder, some traders will employ the use of mules, who are people who come to the release to purchase beer for someone else. People feel the need to do this because brewers put limits on how many bottles a single person can buy, but sometimes traders don’t see this as enough. As a result, a larger percentage of the overall release ends up going to certain people, which shuts a lot of other, non-trading persons out of buying bottles.

Since a handful of people will be shipping beer across the country, it also makes it harder for the brewery to predict how much beer is needed to meet demand in their market. The local community is told that allotment was adjusted based on expected turnout, but after the mules were assembled, there wasn’t enough to go around to the loyal customers who support their backyard breweries. As customers become gradually frustrated with demands not being met, the brewery loses the support of the local community, which is never good. If the brewery can’t expand their production, they’re stuck between pleasing two different groups of people–active traders and local supporters. If a brewery caters to the local market, the traders get angry and blast them online; however, if a brewery caters to the traders, locals become fed up with outsiders taking over, and they stop supporting the brewery. In other words, the way traders gain more than their allotment inadvertently hurts the very brewery they think they’re supporting because of how slim of a tightrope they’ve forced the breweries to walk.

 

After gaining their bottles and looking for trade offers online, there are some traders whose goal is to “trade rape” others. I really fucking wish I were making this up, but that’s really the term they use to describe coming out the other end of a trade as the winner. And if you don’t understand why that terminology is such a big deal, think about this: beer, in general, is seen as a “man’s beverage,” but many women are trying to break into the industry as both employees and drinkers. When you consider that 1 in 6 women are victims of attempted or completed rape, imagine what they must think when they hear a group of men laughing and talking about how they “trade raped” someone. Imagine how uncomfortable–if not scared–you would be, especially if you’re the only girl in a large group of men, which happens more often than not. In other words, it’s intimidating as shit.

I also shouldn’t have to mention how disgusting it is that “trade rape” is something that a lot of people consciously try to do. Not only do they nonchalantly use reprehensible language, but they also actively try to screw people over. They search for the best deals and brag whenever they find someone who is offering something disproportionate; put more simply, they go out of their way to take advantage of others, and they are proud of doing so.

As people try to get the best deals on their initial investment, they constantly flip beers to one-up their last trade. However, constantly flipping beers has an unseen consequence: it ruins the beer.

Most people don’t realize that beer is actually a fairly fragile liquid. As soon as a beer in a clear bottle sees the sun, it starts to develop off-flavors and degrade in quality. Although this doesn’t matter when shipping in cardboard boxes, the constantly changing temperature does. Beer traders are resigned to using FedEx or UPS (since shipping beer through USPS is highly illegal), so that means a bottle valued at $500 plus dollars will find its way in the back of a warm truck for any number of hours. If the bottle gets passed more than a few times between traders, the effect of degradation increases exponentially. Then, when it is finally popped, the rare beer seekers talk about how it “doesn’t live up to the hype” and is a “drain pour,” even though it was their own greed that may have caused the less-than-ideal quality in the first place.

More beer, though, isn’t what people are after; sometimes, it’s money. Before I go any further, I want to make it perfectly clear that reselling beer is completely illegal, so just from a legal standpoint, this shouldn’t even be a debate. But here we are.

There are a couple of ways people can make money on the beer black market. Some simply sell the beer on secondary market sites, like MyBeerCellar and MyBeerCollectibles. On these sites, people post listings of their beers, and what they hope to sell it for. Think of these websites as the eBay of beer but a whole lot more sketchy. Then, these sales are collected and averaged on BeerBlackBook, and this determines the beer’s value.

Coincidentally, it is these values that determine whether or not a trade is “fair,” so these secondary sales have a bigger impact than they initially seem to. In fact, it’s gotten to the point that people start putting up trades for bottles that haven’t been released yet but do have a release date. Then, when someone buys the bottle because they know they won’t get to the release, that sale determines the value of the beer, often hundreds of dollars more than the retail price. A beer that sold for $30 at the brewery, if traded, could easily be valued at $300 and traded for an equivalent value of beer, and sometimes all this happens not even a week after the bottles first made it into the hands of customers.

Like I said above, this is illegal, but some brewers are taking matters into their own hands. All over the country, breweries that make highly-sought-out bottles have started to make lists of people when they catch them selling their beer online, banning them from future releases to curb this kind of behavior. However, some beer geeks have found a way around flat-out selling the beer with something called a razzle, which is essentially a beer lottery.

How razzles work is that the person wishing to sell their beer finds the value of their beer on the websites I mentioned above. They then calculate the shipping costs, and that’s the minimum amount they want to receive for their beer. Where it gets weird, though, is they post on special Facebook groups and people buy numbers, and based on the actual lottery, the person whose number was selected gets the beer at a lower price than they normally would (assuming they only buy one or two spots). Although it may be cheaper for the customer, it is usually more profitable for the seller, especially if they have satellites (which are a mini-razzle for a spot in a larger razzle, a common practice for bottles that have a value of $500 or more).

It has even gotten to the point that people are going to draft-only releases and divvying up their snifter pours into 2oz vials and selling them online. Yet again, I wish I were kidding, but there is a fucking market for 2oz vials of rare beer.

In the beer community, it’s easy to draw the line between what’s acceptable and downright illegal and shady in the secondary beer market, but there are some morally ambiguous areas that aren’t ever really discussed. Regardless, once you start making money on beer–beer, might I add, that you did not help produce in any way–you’re being greedy. Countless brewers–the very brewers who make the beers that are valued so high–have denounced this practice, so why does it continue? Besides the supply-and-demand debate, there is no defense for the practice of re-selling beer or seeking a profit via trading for rarer beers.

What do you mean no defense, you may ask, and yes, I mean no defense. The beer industry is full of professional men and women who love what they do, and they work countless hours doing physically and mentally taxing work to provide a glorious glass of beer. The cost of starting a brewery is huge, and it takes awhile to turn a profit. Think about how much it would sting if you put your entire life savings into a brewery only to have someone else who contributed nothing make more money per bottle than you. Think about how much money is spent on beer outside the legal avenues. Think about how much of the beer market share that craft beer could hold if all the black market money was spent at breweries, bars, and bottle shops. Think about how inaccessible some beers have become, not due to simple supply limitations, but because of people going through release lines multiple times with friends and family members who are holding someone else’s money. Think about how year-round, readily available good beers are disappearing because of how people would rather buy new, exciting, and rare beers.

So, just to be clear, what I mean when I say there is no defense for the secondary beer market, what I mean is that the secondary beer market is actively destroying craft beer as we know it.

You may argue with me all you want, but once you profit off beer you did not produce, you are hurting those who made the beer you claim to love. You are creating a divide between beer drinkers and creating an elitism in beer that I never thought would exist. You are slowly becoming just as pretentious as wine snobs.

What I’m trying to say is that things are getting out of hand, and we need to take a step back and gain some perspective. We need to, as a community of beer lovers, draw some boundaries because there seem to be no clear ones right now. Brewers–the very people who dedicate their lives to this industry–have come out and said they feel it’s unfair for their bottles to be resold at higher prices, so we should respect their wishes and stop the illegal reselling of beer and, consequently, rework the trading system.

I know some of you are angry with me because of everything I’ve said. But you know what? I don’t care. You know why? Because, if you’re angry at me, you’re part of the problem, and you’re upset that I’ve called you out. If you are thinking, “Well, it’s my beer! I can do whatever I want with it!” you’re being greedy, and you are missing the point.

This is bigger than you and your cellar; this is about how the secondary beer market hurts the craft beer industry as a whole.

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One thought on “We Need to Talk about the Secondary Beer Market

  1. (First time blog reader) I truly appreciated, as someone who is new to the craft beer culture, the insight you provide to the way that beer (unfortunately) is much like many other collectible things. It reminds me a lot of how “scalpers” treat concert or sport tickets. It ruins the market for the average fan, and leaves the organization/artist in a difficult spot. Also the nonchalant and juvenile use of the word “rape” is absolutely reprehensible, and it is heartening to hear a woman in the business speak out about it as you have. I look forward to all future posts 🙂 continue the good work

    Like

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