On Long Island, dozens of bars, restaurants, and gas stations (and one fire department) won’t be selling Budweiser or Newcastle this Memorial Day weekend. They’re boycotting the island’s only AB-InBev and Heineken distributor in solidarity with its striking employees, who have not gone to work since April 23.
More than 100 of the company’s 320 employees, mostly members of the Teamsters Local 812 union, walked out of the job four weeks ago after months of unsuccessful negotiations. They say their employer, distributor Clare Rose Inc., implemented a new beer selling system that could result in a 30 percent cut to drivers’ wages through differences in base pay and commission.
But the bigger issue is that Clare Rose wants to eliminate its pension plan. Under the new terms, employees would have the option to participate in a 401(k) rather than collecting a defined benefit each month after retirement. No one would lose the pension money they’ve already earned, but from here on in the retirement benefit package would change.
Teamsters 812 Clare Rose strikers in the first week of the strike
Joe Vitta, Secretary-Treasurer of Teamsters 812, says that getting rid of the pension would mean drivers walk away from $1,000 a month upon retirement. “[Clare Rose is] claiming that they don’t believe in defined benefits anymore and that our plan is underfunded and would go broke, which is not true,” he explains. To underscore the stability of the multi-employer plan the union uses, he adds that Coca-Cola, Pepsi, and AB-InBev have all successfully negotiated contracts with Teamsters 812.
“It’s a money grab. That’s all it is. The third generation family took over the business, we never had a problem with this company in the sixty years we’ve had a contract with them,” Vitta says, adding that strikes like this are rare—the last one he remembers was in 1989 against a Pepsi distributor. “That’s usually what happens when they attack every core economic issue in the contract.”
Vitta says Clare Rose’s attorney sent out a letter on the first day of the strike informing employees that they would be permanently replaced. For now, management and nonunion employees are filling in the gaps, driving the trucks and delivering the beer themselves. The strikers maintain a Facebook page of their delivery mishaps. Photos include spilled beer and one shot of a Clare Rose truck that evidently crashed into a light pole. Vitta says the company is busing in workers from out of state. “Most normal people wouldn’t want to cross the picket line. These are professional scabs, people that can’t get jobs anywhere else.”
Teamsters 812 Strikers handed out signs to restaurants and stores participating in the boycott
But the conflict is far from over. The union has filed complaints at the National Labor Relations Board and encouraged action from the Industrial Development Agency (IDA) in the town of Brookhaven, which gives Clare Rose hundreds of thousands of dollars in tax breaks each year. The IDA has launched an investigation into the distributor’s employment practices, and the company could lose those tax breaks if it is found in violation of its contract with the town.
Clare Rose, which was featured as a top distributor in Beverage Executive in 2011 for selling $202 million worth of beer, did not respond to requests for comment. But it did post a “Facts About the Strike” page on its website, which claims that more than half of the striking employees would’ve received a raise under its latest offer (but doesn’t provide much more detail). The post defends management’s position on the pension as well: “We proposed to pay the Teamsters [sic] failing pension fund millions of dollars to exit (before conditions worsen)” it reads. Vitta admits that the union pension plan is currently at a deficit, but says that he presented Clare Rose with a rehabilitation plan that estimated 100 percent funding by 2034.
And what about the new selling system, the one the union says will reduce driver pay by 30 percent? Clare Rose says that such a transition needs to happen to keep up with its competition. (Two quick counterpoints: There’s virtually no competition, as the distributor has a legal monopoly on AB-InBev and Heineken sales on Long Island. Also, Vitta says the union has successfully navigated the same type of transition with other distributors.) Without going into further detail, the company’s post says that “we proposed annual compensation in the range of $70,000 for those in the new delivery driver role. In fact, the union’s own salary proposal for the drivers would actually also have reduced what some our driver-sales employees earned, and was in the same salary range as our proposal.”
Regardless, drivers and warehousemen are continuing their strike. They’ve set up a Facebook page where they photograph “scabs” at work. And they’ve enlisted several local companies to refuse deliveries from Clare Rose. Vitta says sources inside the company tell him the labor shortage combined with the boycotts mean business is down by about 60 percent headed into Memorial Day.
Vitta is still hopeful that the distributor will be ready to negotiate soon. “When things like this turn around, sometimes they turn around very quickly.”
There’s a larger irony embedded in this scuffle, one that provides a glimpse into the broader machinations of Big Beer sales and distribution: None of the global corporations involved are really taking an economic hit.
Look at it this way: The few local craft brewers that work with Clare Rose are losing sales because of the boycotts and disruptions in distribution. The employees at Clare Rose are losing money because they’re out of work. The local businesses that participate in the boycott won’t be able to sell cheap beer on Memorial Day weekend—that’s likely a pretty big chunk of change. But what about AB-InBev and 7-Eleven and Heineken?
While there may be some independent stores that choose to join the boycott, large chains like 7-Eleven and suppliers like AB-InBev have national contracts with one another. So not even community-scale revolt can disrupt their supply chain in any significant way. Even if a 7-Eleven operator is best friends with a Clare Rose striker, he has to accept his InBev deliveries—regardless of who is driving the truck.
“There are businesses that would love to support,” Vitta explains. “A manager of the store, even though he’s sympathetic, can’t refuse the order even though he’d like to—because it’s a national agreement.” So even though there’s only one AB InBev distributor on Long Island, and even though its employees and other small businesses are boycotting its decisions, the beer still lands on the shelf.
