It Seems the Stock Market Doesn't Care What Joe Curtatone Drinks

Friday, August 24, 2018

With all due respect to the mayor of Somerville, sometimes you just got to have a Sam -- a Sam Adams beer, that is.

Which is why, today, it’s looking like the recent Trump-favorable remarks by the inventor of Sam Adams are not going to hurt beer sales, calls for a boycott notwithstanding.
Let’s back up to the start of this story.

On the night of Tuesday, August 7, Jim Koch, founder of the Boston Beer Co., which produces Sam Adams, was among 13 business leaders invited to a dinner-conference at the Trump National Golf Club in Bedminster, New Jersey.  It was a political event designed to highlight the president’s economic agenda and record.
Following a brief speech, the president asked every business leader in the room to stand, introduce himself, and offer brief remarks.  When Koch’s turn came, he said, in part:

“I’m not quite sure why I’m here.  I’m like the smallest company by far.  I’m Jim Koch and I started making Sam Adams Beer in my kitchen 37 years ago…I guess I’m sort of speaking on behalf of what is now 7,000 small brewers in the United States.
“When I started Sam Adams, American beer was a joke, and it pissed me off…now, American brewers make the best beer in the world…the (Trump/Republican Party) tax reform was a very big deal for all of us because 85 percent of the beer made in the United States is owned by foreign companies…

“I’m the largest American-owned brewery at 2 percent market share.  We were paying 38 percent taxes…and competing against people (foreign brewers) who were paying 20…now we have a level playing field and we’re going to kick their ass.” 
The next day, I read Koch’s comments in The Boston Globe and was surprised he had stuck his neck out that far.  Maybe he’d been over-served his own product last night, I thought.  Purveyors of consumer products are famously reluctant to take outspoken positions for or against policies and elected office holders for fear of turning off their customers who might feel otherwise. When you live and die by volume sales, it’s best to steer clear of hot-button political issues.

And here we had one of the most successful entrepreneurs in the history of Massachusetts, if not the USA, throwing political caution to the wind. 
Koch is a genius-level business visionary and one of the world’s best salesmen --  a man with three Harvard degrees (BA, MBA and JD) who quit a $250,000-a-year job with the Boston Consulting Group in 1984, took his life savings and parlayed it into a company that, 34 years later, is worth more than a billion dollars.

Soon there were calls for a boycott of all Boston Beer Co. products, with the sharpest-edged one delivered by eight-term Somerville Mayor Joseph Curtatone.  “We need to hold these complicit profiteers of Trump’s white nationalist agenda accountable!” Curtatone tweeted, adding a few minutes later:
“I will never drink Sam Adams beer again!”

It’s been over a week since Curtatone slammed Koch for “sucking up to Trump” and floated his boycott idea.  There have been no reports so far of a negative impact on sales of Sam Adams.
One thing is clear, however. The controversy has not hurt the price of Boston Beer Co. stock.  As of this morning, company shares were trading at $307.70 apiece, only slightly below their all-time high of $314.52 in January, 2015, and miles above their low point of recent years, $163.05, which was recorded in February of this year, a mere seven months ago. 

I waver on Koch’s Bedminster escapade.  I think he was acting servilely and selfishly when he endorsed Trump’s deficits-be-damned/make-the-grandkids-pay-for-our-lifestyle approach to stoking the economy.  On the other hand, I think he deserves credit for having the guts to stand up in public and hail a widely reviled and detested president for actions that have strengthened his company and benefited his shareholders.



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