December 16, 2019

Reactions to New Belgium’s Sale

Because New Belgium Brewing has been one of the best-known employee-owned companies in the United States, its prospective sale to the Japanese brewing conglomerate Kirin has provoked many reactions. The employee vote will be completed tomorrow.

[Update on December 18: In an article in Bevnet, New Belgium CEO Steve Fechheimer  was quoted as saying, “today, New Belgium ESOP participants voted in favor of the proposed transaction with Little World Beverages.”]

A group of 17 commentators with wildly different perspectives is on a forum on New Belgium’s sale hosted by Fifty by Fifty, with views from “ESOP companies face the same pressures and opportunities all companies do” (Corey Rosen) to “New Belgium Was More than an ESOP” (Jennifer Briggs) to “Employee Ownership Must Become a Movement for Social Change” (Dave Hammer) to “Let’s Not Let the Ideal Be the Enemy of the Pretty-Darn-Great” (Jason Wiener).

Striking a different note, a group of local human rights activists argued that New Belgium’s employee-owners should reject the sale because Kirin owns the majority of a brewery in Myanmar (formerly known as Burma) in which the Myanmar military also owns a stake. The protestors argued that profits from the brewery might be supporting violence against Myanmar’s Rohingya minority. New Belgium’s co-founder Kim Jordan spoke with protesters, inviting them inside the brewery for a conversation.

Another reaction is from Natalie Reitman-White of Organically Grown Company, formerly an ESOP-owned company. In an article, she recalls listening to Kim Jordan and Irene Fermat of Full Sail Brewing talking about employee ownership. She notes that neither company is now employee-owned, and that she was concerned herself that “an acquirer might come to our ESOP trustees and say, ‘I’ll pay you a bunch of money for Organically Grown Company,’ and our ESOP trustees might actually go for the offer because they’re fiduciary-bound to maximize the share value.” OGC is now owned by a multi-stakeholder trust with trustees elected by “farmers, employees, investors, its customers and the community.”

Finally, employee ownership continues in the craft brewing industry, with Arizona-based Barrio Brewing announcing that it would become employee-owned. Dennis Arnold of Barrio said “the decision on our exit strategy was easy” because they will be leaving employees “with their destinies in their own hands.”

If employees holding a majority of shares approve the sale, it is expected to proceed. If they do not, then the ESOP trustee may be asked to review the decision to determine whether the sale should proceed.