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How Yuengling and Schell's Became Craft Beer

The political implications of this tweak shouldn't be overlooked. The Brewers Association acknowledges that it is trying to take 10% of the beer market by volume in 2014 and changed its mission statement to reflect a new goal of 20% market share by 2020. By bringing Yuengling on board, BA just added a brewer that produced 2.79 million barrels in 2012 -- more than any craft brewer. August Schell, meanwhile, made 132,000 barrels that year. That's more than the total for midrange craft brewers including SweetWater (110,000), Full Sail (110,000), Summit (113,000), Anchor (117,000), Firestone Walker (119,000), Long Trail (120,000) and Great Lakes (120,000).

That said, it doesn't mean that the Brewers Association is willing to bring in any brewery with less than 6 million barrels of U.S. production. The "independent" portion of its craft brewer definition still applies, and still excludes any brewer that sells more than a 25% stake of their operation to a member of the alcohol industry that isn't a craft brewer. That means historic Mendocino Brewing is still out, since it's owned by big Indian brewer United Breweries. That leaves out Fordham and Old Dominion as well, as those Delaware-based brewers are 49% owned by Anheuser-Busch InBev.

Perhaps most significantly, that still excludes the Craft Brew Alliance and its Kona, Omission, Square Mile Cider, Redhook and Widmer Brothers brands. Never mind that Redhook has been brewing beer since 1981 and that Kurt and Rob Widmer are celebrating 30 years of brewing this year: Craft Brew Alliance is 32% owned by Anheuser-Busch InBev. What difference those six percentage points make is unclear to even some who've long observed the craft beer industry, but it's a point that the Brewers Association still refuses to budge on.

The same applies to its import threshold. Burlington, Vt.-based Magic Hat, Seattle-based Pyramid and Portland-based Portland Brewery were all once craft brewers, but had the misfortune of being lumped into the North American Breweries parent company. They're out not because NAB was sold to Cerveceria Costa Rica, a subsidiary of Florida Ice & Farm, for $388 million in 2012, but because the volume of NAB-imported Labatt's -- an Anheuser-Busch InBev product produced in Canada, is greater than the amount of beer that NAB produces in the U.S.

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That doesn't mean they can never be craft again, mind you. It just means that Magic Hat, Pyramid and Portland have to hope that demand for Labatt's wanes a bit. For example, Boulevard Brewing in Kansas City and Brewery Ommegang in Cooperstown, N.Y., are owned by Belgian brewer Duvel Mortgaat, but each is still considered craft because Duvel imports relatively little beer into the United States. Portland-based BridgePort and Shiner, Texas-based Shiner, meanwhile, only gained "craft" status in 2006 when parent company Gambrinus lost the right to import Corona.

That still muddies the definition of "craft beer" a bit, but Gatza and the Brewers Association seem confident the term means a lot more today than it did when some of the country's longest-tenured brewers didn't fit under its umbrella a year ago.

"The association is stronger when it includes some of the older brewers in this country who are still small brewers."

-- Written by Jason Notte in Portland, Ore.

>To contact the writer of this article, click here: Jason Notte.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post,, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.
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