Diageo’s Anti-Competitive Bullying Tactics Revealed

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Wow! Just wow. Anyone paying attention knows that the corporate world doesn’t like to play fair if they can get away with it, and they usually can. They bigger they are, the more resources they command, the easier it is to bully, cajole and generally get their way. It gives them an unfair advantage, of course, but that’s the way of the world, from the playground bully to the largest multi-national. Obviously, that behavior is not restricted to the alcohol industry, but since that’s the world I’m most familiar with, that’s where I see it the most. From free t-shirts, tickets to the 49ers and even free kegs, it’s been an underlying current in the beer business for at least the twenty years I’ve been paying attention to it, and undoubtedly far longer. It’s one of those things that everybody knows about but few people talk about openly. But this one is pretty hard to ignore.

This past weekend, while much of the beer world was listening to the World Beer Cup awards being announced, over the pond in Glasgow, Scotland, another award show was taking place. This one was the 2012 British Institute of Innkeeping Scotland Annual Awards, which celebrates “success in the license [pub] trade in Scotland.” BrewDog, whose pubs have been making quite a splash, were up for the “Bar Operator of the Year” award. When it came time for the announcement, the award went to another company. But one of the BII judges was seated at the BrewDog table and cried foul. According to BrewDog’s blog, the surprised judge said “this simply cannot be, the independent judging panel voted for BrewDog as clear winners of the award.” When the alternate winner went up on stage to accept the award, they found that “BrewDog” had already been engraved on the award and refused to accept it.

Yesterday, BrewDog received a call from the BII explaining where and how things went awry:

We are all ashamed and embarrassed about what happened. The awards have to be an independent process and BrewDog were the clear winner.

Diageo (the main sponsor) approached us at the start of the meal and said under no circumstances could the award be given to BrewDog. They said if this happened they would pull their sponsorship from all future BII events and their representatives would not present any of the awards on the evening.

We were as gobsmacked as you by Diageo’s behaviour. We made the wrong decision under extreme pressure. We were blackmailed and bullied by Diageo. We should have stuck to our guns and gave the award to BrewDog.

Wow, right? I give credit to the BII for at least admitting what happened and taking whatever consequences will likely come their way. Diageo, on the other hand, is claiming it was a “rogue agent,” an employee who went too far. The makers of Guinness released this statement today:

Diageo has provided the following statement in response to communications from independent brewer, BrewDog, in relation to the British Institute of Innkeeping Scottish Awards on Sunday 6 May 2012.

A Diageo spokesperson: “There was a serious misjudgement by Diageo staff at the awards dinner on Sunday evening in relation to the Bar Operator of the Year Award, which does not reflect in any way Diageo’s corporate values and behaviour.

We would like to apologise unreservedly to BrewDog and to the British Institute of Innkeeping for this error of judgement and we will be contacting both organisations imminently to express our regret for this unfortunate incident.”

So somebody probably had to fall on their sword and be the patsy for what is more likely business as usual. Pete Brown asked Diageo for a statement, and they responded with the same one that now appears on their website. Pete also added the following:

I’ve got more to say about the increasingly shameless bullying and anticompetitive tactics employed by some (but not all) big brewers, but this one really takes the biscuit. Diageo, having been caught red handed, had no option but to blame it on a rogue element, and we must take them at their word. But does this reveal something deeper about the attitudes of some global brewing corporations?

Since he’s closer to the British (and Scottish) beer business than I am, it will be interesting to hear his take on things in the near future as he promised to expound on this incident and talk about the larger issue of institutionalized influence by the global beer companies. But still, I can’t help but shake my head and just keep repeating, “wow.”