Lagunitas owner chides New Belgium for taking public funds, touts private financing

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(Chicago, IL) – On Wednesday, Lagunitas Brewing Co. Founder and Owner, Tony Magee, re-iterated on Twitter sentiments that he made clear back in April on the Aleheads podcast.

“The Buncombe County Board of Commissioners will consider almost $9 million in staggered incentive payments to New Belgium Brewing,” Magee writes. “This is your tax money being diverted to a wealthy company. We are becoming the people we set out NOT to be. No incentives for us in IL.’

Magee then tweeted out a photo of a $15.8 million promissory note that he signed with a bank to help finance Lagunitas’ Chicago facility. He signed the note, which appears to carry an interest rate of 3.5% and a term of less than two years, on Wednesday.

Here is what Magee said on financing in April:

“My peer brewers…it’s kind of a corporate approach to running a business. You got to know that they went deeply into the public trough to fund the brewing operation which I could never do in a million years. What that yielded were state employment grants, tax deferments and special dispensation of cash. If anyone reads the papers, it is a pretty dry trough. So what’s a f&^$*#@ rich business like those doing that for rather than just bearing their own weight and bringing value to a community?”

He went on to say in that interview that he didn’t even have “a little” trouble in recently attaining private financing for Lagunitas’ brewing operations.

Later on Wednesday, Magee tweeted, “In my mind this is how capitalism works-the government stays out and risk takers take risks. Any brewer that big has a bank. We are not socialists.”

24 thoughts on “Lagunitas owner chides New Belgium for taking public funds, touts private financing

  1. Jealousy & complaining running rampant at Lagunitas, as per usual. Can’t you just brew your beer and leave everyone else alone?

    “When the going gets tough, the tough shut the f$%^ up and work harder!” Anonymous

  2. I’m pretty sure the difference in cost between Lagunitas’ converted existing (and leased) warehouse space and New Belgium’s sprawling, custom-built “destination brewery” is pretty big. The New Belgium brewery is slated at 175 mill. How much is the new Lagunitas joint going to run?

  3. Oh, and reading his Twitter feed to make sure I had the full story, I caught this. “…in other news:Llittle Sumpin’ Wild is flowing like honey in 22’s and it’s the rookie season for DayTime Ale in 6’rs 1st brew is tomarrow.” I hope that DayTime is actually in six-packs like he says, that’ll rule pretty hard.

  4. F$%^ you Lagunitas, at least NB is willing to distribute in my area. You’re just jealous NB can distribute better beer to about the whole US market.

    Sincerely fly-over states…

  5. I’m not sure how to think on this one. First, opening a business in IL doesn’t seem smart, but I have no idea as to the specifics of their deal.

    I appreciate the libertarian impulse of Lagunitas. I suspect the fine folks at New Belgium skew to the liberal side of the political fence. So it isn’t like suckling off the government teet makes them hypocrites or anything like that.

  6. I agree with Tom. In our attempt to define Craft Brewing, maybe taking on the business practices of the megas should get you kicked out of the club. When I think of my image of a Craft Brewing, I don’t picture the term ‘sprawling, custom-built “destination brewery” or ‘tax incentives’.
    However, Tom and Ken Grossman and the folks at New Belgium (while still just blips on the radar compared to the megas) are entering a rarified atmosphere. They will each have the capacity to brew in the area of 5300 gallons of beer every hour of every day of the year. This, somehow, does not sound like Craft Brewing either.

  7. Where did my comment go? Did my suggesting the King has no clothes get the comment pulled?

  8. A more sober rewrite:

    I agree with Tony. In our attempt to define Craft Brewing, maybe taking on the business practices of the megas should get you kicked out of the club. When I think of Craft Brewing, the terms ‘sprawling, custom-built “destination brewery” and ‘tax incentives’ never enter the picture.
    However, Tony and Ken Grossman and the folks at New Belgium (while still just blips on the radar compared to the megas) are entering a rarified atmosphere. At the conclusion of their expansions, they will each have the capacity to brew in the area of 5300 gallons of beer every hour of every day of the year. This, somehow, does not sound or feel like Craft Brewing either.

  9. New Belgium is a quality brewery but I feel like they have taken a step in the wrong direction when they resort to taking tax payers money to feather their nest. It puts them on the same playing field as other pandering corporations that have lost their integrity.

  10. Regardless of anything else in the debate, I’ll take the Lagunitas beer portfolio over the New Belgium beer portfolio any day of the week. Lagunitas simply makes things that are much more to my taste.

  11. Do all Libertarians feel the need to ding someone else’s business practices? How about you just brew your beer and leave it at that? A jobs-deficient county in NC and a thriving major city are two different places, anyway. Cheers.

  12. On the one hand, I don’t blame New Belgium from taking free money.

    On the other hand, it’s great to see Lagunitas stand up for rational public policy. There’s no reason to throw money at a relatively large, successful business.

  13. Don’t local governments also have the right to compete for a company’s business? If it comes down to five locations, and one government gives me a better package of incentives than another, shouldn’t I take it?

  14. That’s ridiculous, you can freely “ding someone’s business practice” when your business practice involves stealing money from the populous to finance your enterprise. This kind of thing sets a very bad precedent where the lines of business and government become very blurred and everyone will be worse off as a result.

  15. You people need to open your eyes to the way LOCAL governments do their business. How do you think elected officials entice out of state businesses to come set up shop in their town and give the members of that community jobs? You think it’s because the trees look pretty and a river runs through it? NO! they do it by offering that company incentives. Government 101. If your a company wanting to expand and a local municipality offers you 10’s of millions more than someone else to come there, all other factors being equal, you’re a fool for not doing it.

  16. Greetings commenters… I’m not libertarian or a tea-bagger and there’s no such thing as ‘free money’.. Someone said that the jobs are needed in that area, someone else said that I’m jealous, another said I shouldn’t comment so on ‘founders of the industry’, and another said I’m a complainer… The subsidies offered to NBB and probably SNB and maybe even OB combined would have probably completely funded ALL of the breweries already in operation in Asheville. The money is/was tax receipts to the county (they were voting) so that means it was probably real estate tax receipts, maybe marriage certificate fees, whatever… either way it would have funded schools, fire departments, police, and other social programs in the current year. It would be odd if that county is particularly fat these days, but maybe they are. Maybe tax receipts and jobs will grow down the road because of the new employment, but those brewers didn’t require the funds to build their breweries. The locals will all get to vote for their local officials later, but do you suppose that the local brewers there who funded their own guts-and-glory-bound micro brewhouses would have voted in favor of the subsidy if they’d known about them?… or were they themselves ever candidates for this sort of assistance? Of the two groups of brewers, which of them has already paid into the pool from which those subsidy funds were disbursed? One said that that is how governments compete for the jobs… not exactly; that is how the elected officials get to brag about what THEY brought to town in order to get reelected. When I went to Chicago, after it was in the papers there, I received calls from serious elected officials who wanted to help for that very reason. We listened to their descriptions of the ‘tools’ they could offer and we demurred. So, Mr. Crass2112 wins if that makes me a fool. Easy for him to talk that way, I would guess he never actually had to sound his own soul while having to decide where he would stand on that decision. All of the economic ‘incentive’ arguments aside, why the hell is an incentive necessary? To keep it from moving to the town next door? What game are we all playing now? I didn’t start my brewery to rise to a place where I could be a ‘player’, I think most of us did it to connect with people… Therein lies the difference… and I wanted to point out that money f^%$s everything up if people are susceptible to money. It can buy opportunity, but it corrupts too. A business, like the two big ones going there who fly the flags of ‘greenness’ and purity and grounded-ness and integrity and then is totally cool with going that deep into the mud while all the while pretending to be ‘leader’ of our industry is an industry that I would opt out of and form a new one where we all go to work every day and create value and bring gifts to the communities in which we live and spend and work and earn and participate unselfishly. Like I said in the tweet, Craft is becoming Crafty along with other things that we set out NOT to be. One definition of craft might include the words counter-culture… Drink things you actually believe in. If that is mine, welcome, if not, find your muse. And now, that is all I have to say about that…

    Keep craft weird.

    Cheers… peace-out… and truth-out.

  17. Again, I agree with what Tony is saying.Pointing out that Craft Brewing should

    somehow include the concept of ‘counter-culture’ was a beautiful thing. And, yes,

    what politician’s do in the name of good is usually disgusting and disappointing.As

    an example, take the kids in the City of Sacramento that will never see the leaks in

    their classroom roofs repaired because politician’s feel the need to have a second-

    rate basketball team around.

    Success, in American business, is all about getting bigger. If you stay the same as

    last year, you got smaller.But there is a finite market for any product. To see

    what’s happening to the megas, it would seem that point has been reached.Craft

    Brewing is only stealing customers from the megas.

    Winning, in this kind of situation, is going to come down to who is the best

    promoter.In the early days of Craft Brewing, Bill Owens was the self-promoter. I

    always thought his bar sucked and he made puke beer. But the history books see him

    as a great success (a tribute to his promoting).The folks that put up tidbits on

    BeerPulse every 10 minutes are today’s self-promoters.Most of them will never be

    offered five minutes alone in a community’s coffers. Many of them will never

    experience much success more than thirty miles from home. But they are the ones I

    will continue to support.

  18. @ Tony, I would refer you back to my first comment & say, “Thank you for proving my point!”

  19. Pingback: New Belgium CEO on North Carolina incentive packages | BeerPulse

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  21. Hey crass2112, why wouldnt your slogan “When the going gets tough, the tough shut the f$%^ up and work harder!” apply to you? NBB is a front for SAB Miller! The Craft Brewers of Ashville NC, should be offered these tax incentives first! Not NBB!

    Thanks Tony!

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