MANHATTAN BEER / PHOENIX BEVERAGE TRANSACTION Presentation by John Ulrich Vice President

Teamster Local 812

BACKGROUND

The Soft Drink and Brewery Workers Union, Local 812 IBT faces a significant problem that requires the assistance and cooperation of the International Union, Change to Win and Workers United, SEIU (formerly affiliated with UNITE). Manhattan Beer Distributors LLC (“Manhattan Beer”) was created more than 15 years ago in order for the Coors brand to be brought into the New York market by the Honickman organization, the largest independent bottler in the United States. The Honickman companies employ nearly 3,000 people in 12 states, with more than half (approximately 1,600) being employed in the New York market among three separate companies. 900 of these workers are members of Local 812 IBT, and 700 are members of SEIU working for Manhattan Beer. Manhattan Beer has a collective bargaining agreement with Laundry, Distribution and Food Service Joint Board, Workers United, Affiliated with SEIU (the “Joint Board”). The existing unit was the subject of a prior Article 20 proceeding, which resulted in an unfavorable decision in 2003, giving representational rights to the predecessor of the Joint Board which was known as UNITE Local 99. The initial collective bargaining agreement at Manhattan Beer was ratified in April 2004. The current collective bargaining agreement will expire in April of 2016. The Pepsi Bottling Company of New York, Inc. covers Westchester, the five boroughs of New York City and Long Island in regard to both production and distribution of carbonated and non-carbonated beverage products. The Canada Dry Bottling Company of New York, Inc. covers the total Hudson Valley, Westchester, the five boroughs and Long Island. These companies, along with Manhattan Beer are the Honickman companies operating in the New York region. In 1998, Manhattan Beer acquired the distribution rights from the Coors Brewing Company and expanded from its existing distribution regions into four more counties in the Hudson Valley: Orange, Sullivan, Duchess and Ulster. This transition caused the displacement of many Local 812 members and forced them to seek employment elsewhere, due to the fact that Coors and its brands had previously distributed by independent companies that employed Local 812 members. At that time, additional products such as Becks, Grolsch, and Evian were also added to Manhattan Beer's stable of products.

ISSUE & STATUS

For the last 8 months, Local 812 has attempted to resolve the impact and representational issues surrounding the transaction between Manhattan Beer and Phoenix. Representatives and attorneys from Local 812 have unsuccessfully attempted to negotiate a

consensual agreement with the representatives and counsel of the Joint Board. At the onset, the Joint Board indicated to both Local 812, its counsel as well as to the IBT’s associated general counsel, that it was desirous of a 50/50 relationship, a concept that Local 812 was willing to entertain and has pursued consistently throughout the negotiations. While both parties have met numerous times, there has been no resolution to date, and in light of recent communications, there is no reason to believe that the parties are close. Consistent with the initial discussions, Local 812 has repeatedly attempted to meet somewhere in the “middle”, and has exhausted all possible avenues of resolution consistent with the requests of the Union’s leadership. The Union has participated in dozens of meetings, and been open minded – willing to listen to any suggestion or theory that would bring this to a reasonable conclusion. Throughout this process, Local 812 has been careful to maintain a strong manner of professionalism and integrity so not to cast the IBT or its representatives in a negative light. The Joint Board, on the other hand, has acted unprofessionally and in bad faith throughout this process. At the outset, there were unprofessional outbursts by Christine Kerber (the Joint Board’s co-manager) involving yelling, threats against the IBT and even against the SEIU, leaving the room, promoting lies among her membership and closed door meetings with Manhattan Beer which she later disavowed when confronted. There has been a manipulation of the process, including misrepresentations throughout the process as well as the tactical retention and termination of counsel to slow the process as well as scheduling meetings with counsel only to then have their counsel not appear. The Joint Board is currently on its third set of counsel. By way of example:

• Joint Board originally retained Rick Greenspan who represented that the Joint Board was willing to consider entering into an agreement pursuant to which (i) both unions would initially represent the Manhattan Beer membership through a “joint council” or servicing agreement, (ii) after the existing CBA expired, the Joint Board would then cede representation to Local 812 in exchange for financial consideration paid over a period of time. Note: Kerber later disavowed this and said that Greenspan had no authority to make those representations. Greenspan was subsequently replaced.

• Joint Board then retained Brett Garren who met had conversations with Local 812’s

counsel and with Neil Ditchek as well as face to face meetings – he represented that the Joint Board was willing to consider entering into an agreement pursuant to which both unions would have equal representation of the Manhattan Beer membership through a “joint council” with a neutral third-party to resolve all disputes. This was confirmed in a meeting with all present, including Mr. Ditchek. Note: Kerber and Wilfredo Lauracent (her co-manager) later disavowed that concept after stringing Local 812 along for about 1 ½ months, terminating Garren and retaining Tom Kennedy who is the author of the most recent series of proposals.

The unprofessional and unethical actions clearly suggest that there was never an intent on the

Joint Board to come to a resolution. Even more troubling are the unethical practices, involving what Local 812 believes to be back door agreements with the Company in order to push their agenda. For example, the owner of Phoenix (Rod Brayman) had initially advised us unsolicited that their intention was to close Maspeth and to move that work into the pier, a Local 812 facility where Phoenix has historically operated. When this was discussed with Kerber, she then went and met with the owner of Manhattan Beer who then announced that this would not be taking place. While both unions have made proposals and counter proposals, with neither side agreeing to certain terms, the Joint Board and its counsel have offered nothing more than to eliminate Teamster jobs to promote its own agenda. The Joint Board has taken the position that as a result of this transaction that there would be an accretion and that because they have more members, the Local 812 members should be accreted into their bargaining unit and all represented by the Joint Board. Local 812 believes differently – we believe that the transaction is a merger since the current owner will remain as an 18% owner of Manhattan Beer, and that regardless of the nature of the transaction, that (i) this is a consolidation which would trigger a right to an election among both unions, and (ii) alternatively, that each location would qualify as a proper unit separate and distinct from the others.

Note: The Company will likely be forced (if necessary) to take the position that this is an accretion because a change in representation would trigger a withdrawal liability in excess of $77 million. That liability was restated in the late summer of last year from $24 million to $77 million, in apparent response to becoming aware of the possibility of the transaction.

Representatives of the Joint Board have dismissed Local 812’s efforts and have recently given the principals at Manhattan Beer a “Take it or Leave it” Offer. The Joint Board has also taken it upon itself to speak on the behalf of Local 812 without Local 812 or its representatives’ approval or permission. We believe that the collusive efforts have accelerated in recent weeks. The Joint Board and its’ representatives have gone as far as to speak through Manhattan Beer’s President, Simon Bergson, in order to contact Local 812 for the purposes of making a proposal and pursuing the possibility of negotiations. Mr. Bergson even went as far to make an offer to Local 812 that it could remain on the Red Hook piers (where it presently represents Phoenix employees) and that the Joint Board would keep the rest. Local 812’s Vice President John Ulrich informed Mr. Bergson that it would not be appropriate for Local 812 to negotiate any agreement unless all parties were present – to date, despite efforts to have a meeting with all present, the Joint Board has been unwilling to attend. We consider the actions of the Joint Board to constitute “RAIDING” our Union and the industry – Local 812 is the predominant Soft Drink & Brewery Local Union in New York and has been for over 50 years. The soft drink and brewery field is a “CORE” Teamster Industry with Local

812 being the largest in the country servicing over 30 majors companies and 4,000 members compared to the Joint Board with only one company and 700 individuals

THE JOINT BOARD

Manhattan Beer is the only “beverage” company that the Joint Board represents, as its core representational jurisdiction and membership is dedicated to the laundry and textile industries.

The Joint Board is part of the Workers United segment of the SEIU. It was formerly known as UNITE, formed in 1995 as a result of a merger between the International Ladies' Garment Workers' Union (ILGWU) and the Amalgamated Clothing and Textile Workers Union (ACTWU).

In 2004, UNITE announced that it would merge with the Hotel Employees and Restaurant Employees Union (HERE) to form UNITE HERE. Which has since been dissolved creating Workers United.

UNITE's core industries exclusively had been historically tied to textile and apparel manufacturing, distribution, and retailing, but they also had locals involved in industrial laundry, and manufacturing in other industries.

UNITE (and its successors) had and continue to hold no relevant presence in the brewery and soft drink industry. They are struggling in their core industries, with massive layoffs, closings and outsourcing.

These problems are exposed in their national pension fund that currently is in financial trouble. The Joint Board has been forced to make continuous cuts and faces the possibility of insolvency sooner rather than later due to recent casino closings in Atlantic City.

Furthermore, the standard put forth in the Joint Board/Manhattan Beer agreement can only be described as sub-par in comparison to the Local 812 companies, despite the fact that they are significantly smaller in regard to case volume, number of employees and dollar sales delivering and doing business in the same geographical areas.

TEAMSTERS LOCAL 812

Teamsters Local 812 is currently the largest and most well established Soft Drink & Brewery local in the Teamsters and the United States representing 4,000 men and woman. Local 812 has set the standard for all beverage industry locals as it has had industry dominance because it has represented 100% of the job categories and positions in the New York metropolitan region’s soft drink and brewery industry.

The Brewery & Soft Drink Industry has been a “core” Teamster Industry dating back to 1886 as the “National Union of United Brewery Workmen”. The union's members were almost entirely Germans, and from 1886 to 1903 the union's convention and publications were in German.

The union affiliated with the American Federation of Labor (AFL) in 1887. The Brewery Workers were given a very wide jurisdictional charter by the AFL, making it one of the first industrial unions in the U.S.

In 1903, the union changed its name to the International Union of United Brewery Workmen of America. In 1917, the union changed its name to the International Union of United Brewery and Soft Drink Workers of America. Three years later, it changed its name yet again, this time to the International Union of United Brewery, Flour, Cereal and Soft Drink Workers of America.

Teamsters Local 812 was actually formed in 1936, and was considered a “Seltzer Local” mostly made up of Jewish immigrants with their ancestors beginning in the United Hebrew Trades.

In 1973 the Brewery Workers voted to merge with the International Brotherhood of Teamsters and become the Brewery and Soft Drink Workers Conference of the Teamsters union as it is presently known.

Teamsters Local 812 has maintained its control and dominance of the New York soft drink and brewery industry for close to 80 years. It has done so through incessant, tireless efforts in organizing as well as an unyielding will to negotiate strong contracts that include recognition language that allow it to grow with the companies it represents.

LOCAL 812 TODAY

1. Local 812 has a strong financial foundation, with a $400 million dollar Pension Plan that provides its members with a $100 multiplier

2. A Pre Taft Hartley Health Fund with over $40 million in reserves and no membership contribution for coverage. The Plan is recognized as a Platinum plan with full medical, dental, eye care and $125,000 life insurance policy

3. Local 812 collects over $300,000 in dues each month and has assets over $1,000,000 including a $500,000 Organizing, Strike Defense fund. It has less than 2% of total membership on suspension.

4. Local 812 has spent over $500,000 in industry based organizing campaigns, awareness and training in the last 10 years. Training 250 Local 812 member volunteers.

5. Local 812 members have created a volunteer member Scholarship Fund – the Scholarship Fund has given over $500,000 in scholarships to children of 812 members.

6. Local 812 has a strong political presence with a State PAC fund of $250,000. Successfully fighting off a Soda Tax and Serving Size limit.

7. Local 812 has been on the cutting edge of technology and education, holding yearly seminars for its members and providing them with the tools necessary such as Android tablets for shop stewards in order for them to be successful in their facilities

8. Local 812 has negotiated over 25 beverage industry leading contracts over the past 4 years totaling over 1.5 billion dollars in total fresh cash without any work stoppages or job actions.

Teamster Local 812 represents the following job categories in each of the following companies. Coca Cola Refreshments – Drivers, Helpers, Warehouse, Merchandisers, Production Workers, Quality Control, Production Mechanics, Fleet Mechanics, Haulage Drivers, Vending Drivers, Vending Helpers, Vending Mechanics, Fountain Installers, Fountain Service.

Pepsi Cola Bottling of New York - Drivers, Helpers, Warehouse, Merchandisers, Production Workers, Quality Control, Production Mechanics, Fleet Mechanics, Haulage Drivers, Vending Drivers, Vending Helpers, Vending Mechanics, Fountain Installers, Fountain Service.

Pepsi Cola Distributors Association - Drivers, Helpers,

Anheuser Busch InBev - Drivers, Helpers, Warehouse

Clare Rose Inc. Anheuser Busch Nassau & Suffolk - Drivers, Helpers, Warehouse

Phoenix/Lobo Beverages - Drivers, Helpers, Warehouse, Merchandisers, Haulage Drivers, Vending Drivers, Vending Helpers, Vending Mechanics, Recycling Workers.

Canada Dry Bottling of New York - Drivers, Helpers, Warehouse, Merchandisers

Dr. Pepper/ Snapple Group of New York - Drivers, Warehouse, Merchandisers

Union Beer Anheuser Busch Brooklyn - Drivers, Helpers, Warehouse

Ippolito Distributors Anheuser Busch Staten Island - Drivers, Helpers, Warehouse

Oak Beverage - Drivers, Helpers, Warehouse

Cedar Beverages - Drivers, Helpers, Warehouse

Boening Brothers Distributors - Drivers, Helpers, Warehouse

Betta-Way Trucking - Drivers, Warehouse

ACG Gas - Drivers, Helpers, Warehouse

Boro Recycling - Drivers, Helpers, Warehouse

InBev /Anheuser Busch has already agreed to recognition with Local 812 in regards to the upstate wholesalers (Dana, Dutchess and Bertolini Dist.) These companies currently cover the

counties of Westchester, Putnam, Rockland, Orange, Dutchess, and Sullivan in 2012 and are located in Local 812 territory. Expectation 200 New Jobs Local 812 has secured other organizing victories and recognition agreements over the past 10 years has catapulted the Union’s reputation and has led to continued success with companies such as:

Dr. Pepper/Snapple Group – Newburgh, Elmsford and Long Island 70 New Jobs

MTC Trucking - Port Drivers in Red Hook Brooklyn 40 New Jobs

Lobo Distributors – Hudson Valley 75 New Jobs

Phoenix Merchandisers – Brooklyn & Hudson Valley 120 New Jobs

Union Beer Salespeople – Brooklyn, NY 40 New Jobs

MTO Recycling – Brooklyn, NY 20 New Jobs

IBT Local 812 has gained recognition with such companies like;

Brooklyn Brewery - First major brewery to build in NYC since early 60’s Expectation 80 New Jobs

Transfer discussions have begun and ongoing with IBEW 363 for the Anheuser Busch Metal Container facility in Newburgh, NY. Expectation 120 Jobs Other campaigns, while not victorious, have created positive publicity included Poland Spring, Red Bull, Craft Brewers Guild, Oak Salespeople and finally Big Geyser who recently was stripped of all their major brands (Vitamin Water) by parent company Coca Cola.

Coca Cola through negotiations with Local 812, has agreed to move 5 million cases of Vitamin Water, Smart Water and Monster Energy drinks onto Local 812 trucks due to the organizing campaign initiated against Big Geyser in 2013, and ALSO to close a non-union blow mold facility (Eastern Container Corp) and move it to a Local 812 represented production facility.

These Significant Changes Will Create and Generate Close To 300 New Jobs at Coca Cola. All these positive achievements have only been possible for the simple reasons of membership density, as well as experience and knowledge of the union’s industry and culture. That is the

diagram for success. The transaction between these two companies, Manhattan Beer and Phoenix, and the prospect of the workers not being represented by Local 812 in favor of the Joint Board will, without question threaten that success, and will lead to Teamsters Local 812 meeting the same demise and fate as those once strong Teamster brewery locals of the past such as Local 46, and Local 918.

MANHATTAN BEER

Today, Manhattan Beer services more than 25,000 accounts with over 75 suppliers. The company manages more than 350 delivery routes per day, covers 14 counties and employs over 1,400 employees. Manhattan Beer is currently ranked #1 and the largest beer distributor in New York. Manhattan Beer is the 5th largest Beer Distributor in the country according to “Beverage Executive” magazine. In 1978 with the demise of the Rheingold Brewery, Manhattan Beer was born. With a fleet of three used trucks, one sales manager, and four salesmen, the company began distributing Carling Black Label and Tuborg beer as the centerpiece of its’ 100,000 case volume in their first year. In 1981, Joseph Schlitz Brewing Company gave Manhattan Beer the distributing rights to Old Milwaukee Light. In 1982, with the closing of Schaefer's Brooklyn Brewery, came Schlitz, Schlitz Malt Liquor and Old Milwaukee. Within thirty days, Pabst and Old English were included. In the following years Manhattan Beer was successful in attracting other brewers such as Latrobe (Rolling Rock) and Genesee. In 1985 with Legislation permitting the sale of wine coolers, Manhattan Beer added products of the Ernest and Julio Gallo, the winery supplier of the full line of Bartle’s and Jayme’s Wine Coolers. In 1988, The Company was appointed master distributor for the state of New York for Corona Extra and expanded distribution to Nassau and Suffolk Counties of Long Island. In 1992, the company expanded direct distributions into Westchester and Putnam Counties. In 1996, Manhattan Beer expanded with Corona and Rolling Rock by distributing to Rockland County. Under Manhattan Beer, Corona Extra recorded numerous years of double digit growth and Rolling Rock established itself as an alternative to Budweiser while Samuel Adams and Pete's claimed over 75% of specialty beer sales in the region. Manhattan Beer was created to move the Coors brand into the New York market by the Honickman organization, the largest independent bottler in the United States. The Honickman

companies employ nearly 3,000 people in 12 states, with more than half (approximately 1,600) being employed in the New York market among three separate companies. 900 of these workers are members of Local 812 IBT, and 700 are members of SEIU working for Manhattan Beer. The Pepsi Bottling Company of New York, Inc. covers Westchester, the five boroughs of New York City and Long Island in regard to both production and distribution of carbonated and non-carbonated beverage products. The Canada Dry Bottling Company of New York, Inc. covers the total Hudson Valley, Westchester, the five boroughs and Long Island. These companies, along with Manhattan Beer are the Honickman companies operating in the New York region. In 1998, Manhattan Beer acquired the distribution rights from the Coors Brewing Company and expanded from its existing distribution regions into four more counties in the Hudson Valley: Orange, Sullivan, Duchess and Ulster. This transition caused the displacement of many Local 812 members and forced them to seek employment elsewhere, due to the fact that Coors and its brands had previously distributed by independent companies that employed Local 812 members. At that time, additional products such as Becks, Grolsch, and Evian were also added to Manhattan Beer's stable of products. The company has a fleet of over 500 trucks, and has undertaken an initiative to re power 30 of those trucks to run on compressed natural gas. Manhattan Beer received $1.6 million in funding from the New York State Energy Research and Development Authority (NYSERDA) to offset the costs of the conversion, and contributed $4.6 million of its own money. The goal of the program is to displace approximately 20 tons of Nitrous Oxides (NOx), 10 tons of Hydrocarbons (HC), 200 tons of Carbon Monoxide(CO),and 2 tons of Particulate Matter(PM) over the life of the vehicles, as well as reducing maintenance costs. Manhattan Beer's Distribution include products from Miller/Coors Brewing Company, Heineken and InBev (Rolling Rock), Genesis Brewing Company (Dundee's), Blue Moon, Killian's, Pete's, Rheingold, Sam Adams, Saranac, Sierra Nevada, A Marca Bavaria, Bass, Beamish, Becks, Boddington Bohemia, Carib, Klausthaler, Corona, Dinkelacker, DosEquis, Franziskaner, Grolsch, Hoegarirden, John Courage, Kronenbourg, Labatt, Leffe, McEwans, Modelo Especial, Molson, Molson XXX, Moosehead, Negra Modello, New Castle, Pacifico, Sol, Spaten, Staropramen, Stella Artois, Tecate, Tennents, Bartles & Jaymes, Boones, Chateau Diana, Mike's Hard, Seagram's Smooth, Verdi, Zema, Evian, Sole, Voss, Hard Core, Hornsby's, Magner's, plus many wines, liquors, spirits and of course the increasingly growing popularity of craft beers. Manhattan Beer has five locations: The new Bronx facility in Hunts Point services the Bronx and Manhattan; Bronx Coca Cola which is represented by Local 812 is adjacent to Manhattan Beer and shares the same parking area. The Brooklyn facility serving Brooklyn and Staten Island; The Queens facility services Queens; The Hudson Valley facility services the counties of Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester; and the Long Island facility services the counties of Nassau and Suffolk. The key members of management of Manhattan Beer Distributors are listed below:

Key Executives for Manhattan Beer Distributors LLC Mr. Simon Bergson Chief Executive Officer and President Mr. George Wertheimer Chief Financial Officer Mr. Bill Bessette Chief Operating Officer The Estimated Sales for 2014 (Mil.) $680.0

PHOENIX BEVERAGES Phoenix Beverages is currently one of New York City's largest beer distributors. It is the exclusive distributor of Heineken, Miller, Guinness, and countless other products in both the New York City, Long Island, Westchester as well as throughout entire Hudson Valley regions.

Phoenix Beverages also holds ownership of several other LLC’s: Lobo Distributors, Beehive Beer, Windmill Distributors and Long Feng Trucking.

Phoenix employees have been members of Teamsters Local 812, Local 918, Local 202 or Local 46 from the Company’s inception and following its purchase and sale of Better Brands Inc. The Brayman family has owned and operated Phoenix Beverages since 1951.

Through Teamster Union consolidations and company mergers or acquisitions (Lobo) all employees are currently members of Local 812. Local 812 has received recognition in every company merger or takeover that Phoenix Beverage or the Brayman family has purchased.

The company’s fleet of some 150 trucks delivers a range of alcoholic and other beverage brand names, such as Miller, Peroni, Pilsner, Urquell, Guinness Stout, Harp Lager, Smirnoff's Ice, Drinks Americas' Trump Vodka, and most Brooklyn Brewery products.

The Company unloads approximately 20,000 containers a year, including up to 13 million cases of beer, from freighters at two piers in Red Hook, Brooklyn.

Beer Distributor Makes a Deal to Move to Two Piers in Red Hook By CHARLES V. BAGLI Published: February 10, 2009 One of the city’s largest beer distributors has reached a tentative agreement to move to two piers on the waterfront in Red Hook, Brooklyn, where the distributor, stevedores and government officials hope to revive and expand once-bustling cargo operations. Phoenix Beverages, which distributes Heineken, Guinness, Brooklyn Beer, Smirnoff Ice and other brands, plans to move its operations from Long Island City, Queens, and Elizabeth, N.J., to Pier 7, at the foot of Atlantic Avenue, and nearby Pier 11 at Atlantic Basin, which the city leases from the Port Authority of New York and New Jersey. The company said it expected to unload about 20,000 containers a year from freighters. “This will be a real boon for port commerce in Brooklyn and the region,” said Representative Jerrold L. Nadler, a longtime advocate for expanded maritime operations in Brooklyn. “It will save and grow high-wage jobs, keep a key New York company here in New York where it belongs, and stabilize and expand critical container port operations at Red Hook.” American Stevedoring, which operates Piers 7 through 10, said that Phoenix would serve as an anchor and help attract additional cargo ships bearing goods bound for New York, Long Island and Westchester County. Currently, American Stevedoring handles only a fraction of the cargo coming into New York Harbor and much of that is put on barges and sent to warehouses on the New Jersey side of the Hudson River. Company executives said the deal would lead to an increase in New York-bound cargo and more jobs. Phoenix, which employs about 600 drivers and warehouse workers, had considered moving all operations to New Jersey. The company reached an agreement on Tuesday with American Stevedoring as well as the Port Authority, the city’s Economic Development Corporation and Mr. Nadler. ____________________________________________________________________________

Phoenix Beverage along with its sister company Lobo Distributors in Montgomery NY is the employer of 400 Teamster Local 812 members in the following categories:

Drivers, Helpers, Warehouse, Merchandisers, Haulage Drivers, Vending Drivers, Vending Helpers, Vending Mechanics, Recycling Workers

Rod Brayman the son of Phoenix Beverages’ founder, Max Brayman, and is the Owner/President and CEO. He is also a Trustee on the Local 812 Pension Fund. Key Executives for Phoenix Beer Distributors LLC Mr. Greg Brayman Chief Operating Officer Mr. Richard Kapp Chief Financial Officer Mrs. Laura Brito Vice President

Phoenix Beverage recently signed a new 5 year agreement with Local 812 which included significant improvements in wages, benefits, pension, work rules and quality of life issues. The collective bargaining agreement was voted in by the membership by a 3-1 margin.

The new ratified contract also included recognition for the 130 merchandisers, recycling employees and Vending employees, all of whom unanimously voted to join Teamsters Local 812 unanimously.

Phoenix Beverage is considered the largest contract and the standard in New York, in terms of wages, health benefits, pension, quality of life and advancement opportunities. The Brayman family has always held a high regard for their employees, believing that the core principles of Health Care, Pension, Wages, Quality of life should be integrated in every collective bargaining agreement.

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News Article – Teamsters.org

NY Teamsters Ratify Contract with Phoenix/Lobo Beverages

Local 812, Great Neck, N.Y., members working as beverage distributor drivers at Phoenix/Lobo

Distributors have ratified a new, five-year contract. The terrific contract solidifies job security, pay

increases, pension and medical protection.

John Ulrich, lead negotiator, and the local's executive board spent four days going over the entire contract

proposal with members. Handouts were issued in English and Spanish. The contract was approved by a

3-1 margin.

John Ulrich, Vice President of Teamsters Local 812, said the executive board is extremely happy the

company was able to rebound after suffering $30 million in damage from Hurricane Sandy last year. "We

as the 812 executive board unanimously endorsed this contract proposal in its entirety and are happy to

see the hardworking 812 members at Phoenix/Lobo achieve their goals and have five years of job

security as well."

"Congratulations to John and the rest of the agents on a job well done," said Joe Vitta, secretary-treasurer

of Local 812.

Phoenix/ Lobo Beverages employs over 400 Local 812 members and delivers products such as

Heineken, Miller, Guinness, Pabst Blue Ribbon, Brooklyn Brewery, Newburgh Brewery, Polar Beverages,

Snapple, Canada Dry, RC Cola and Diet Rite from Long Island, all of New York City through Westchester

County all the way up to Columbia County in upstate New York.

DISCUSSION

As the SEIU notes in its discussion paper entitled "United We Win":

"A focused industry and market strategy is essential for ... Achieving breakthroughs in raising standards for pay, benefits, and working conditions.”

Where working people consolidate under one Union banner in an industry, the gains achievable for working families are the greatest. Multiple unions that organize in a given region, industry and employer divide the strength of workers. Where multiple unions work against each other in an industry, the resulting division deflates conditions for the entire industry. Workers outside the primary focus of a union cannot exert the pressure on an employer for substantial gains in the way that a large percentage of an industry's key regional market being in the same union can.

Bringing these rules of labor economics forward for the advantage of workers can be difficult. The difficulties amongst unions who find themselves undercutting one another for the sake of holding on to declining memberships, severely affects both the standards for labor and makes organizing and collective bargaining more difficult.

When we look to the future, there are many historical situations that e we would not care to repeat where multiple unions compete against one another. As the SEIU notes:

"There are many examples of unions undercutting each other, either deliberately or simply because a union lacks the strength, experience, knowledge, or focus that a primary union in that industry or market has developed. The current culture in the labor movement precludes

the affected unions not only from doing anything about it but even from talking about it publicly."

ARTICLES REGARDING MERGER:

Manhattan Beer Distributors gulps down rival

The acquisition, which would reduce the number of major players in the New York area from three to two, has elicited protests from merchants and independent distributors. BY LISA FICKENSCHER

DECEMBER 16, 2014 3:30 P.M. Manhattan Beer Distributors will acquire competitor Windmill Distributing Company. Bloomberg News

Bronx-based Manhattan Beer Distributors announced Tuesday that it reached an agreement to acquire a competitor—Windmill Distributing Co.—which is the parent of Brooklyn-based Phoenix/Beehive Beverage Distributors. The acquisition will essentially reduce the number of major beer distributors in the New York metro area from three to two, with Manhattan Beer controlling the distribution of such brands as Coors, Corona, Heineken, Miller and Brooklyn Brewery.

In a statement Manhattan Beer's founder and Chief Executive Simon Bergson said, "Our goal is to bring our entire portfolio of great beers to New York consumers at every possible outlet and at a great value."

According to the announcement, the combined company would result in operating efficiencies, improved customer service and create more choice for retailers. Ramon Murphy, president of the Bodega Association of United States, expressed concern about the acquisition, noting that his constituents will have fewer options. He said the legislation will protect their interests and those of consumers.

"Now [Manhattan Beer] is going to control at least 80% of the sale of beers and they can charge any price they want," Mr. Murphy said. "For us it's going to be real hard and we will have to pass the higher prices to our customers who are in low income neighborhoods." _________________________________________________________________________________________

Merger of Two of the City's Largest Beer Distributors Could Threaten Thousands of Minority-Owned Bodegas

A merger of Manhattan Beer Distributors and Phoenix Beehive Beverage Distributors would create one massive company capable of imposing a chokehold on the city's beer market. Bodegas sell 60% to 70% of all the beer in New York Sunday, December 14, 2014, 2:00 AM

Corona Extra, brewed by Grupo Modelo, is the number one selling imported beer sold in the U.S. It is one of the multinational brewers that control 90% of beer production in the country. It is a classic David vs. Goliath story.

A mega-merger between two of New York City’s largest beer distributors that could take place at the beginning of next year would endanger the survival of the city’s mostly minority-owned 13,000 bodegas and its 100 independent beer suppliers, 30% of which are owned by minorities and women.

“If the merger happens we would have to deal with a monopoly,” said Ramon Murphy, president of the Bodega Association of the United States. “They would dictate prices, limit brands and make it much more expensive for the public. There are anti-monopoly laws and they need to be enforced.”

Murphy is right. If the merger goes ahead, the Bronx-based Manhattan Beer Distributors — which will sell and deliver more than 35 million cases of beer in 2014 — and the Brooklyn-based Phoenix Beehive Beverage Distributors, which will sell and deliver 13 million cases, would become one company of cyclopean proportions capable of imposing a chokehold on the city’s beer market.

On Wednesday the Bodega Association will hold a press conference to make public “The Fight for Small Business Survival in an Age of Box Stores and Wholesaler Consolidation,” a report done on their and the Empire State Beer Association’s behalf, making it clear why the merger is a bad idea for them and for consumers.

“Our coalition opposes the merger,” said the Bodega Association in a written statement. “It seriously threatens the New York State beer market as a whole.”

According to the report, large franchise beer wholesalers such as Manhattan Beer and Phoenix Beehive — anointed by multinational brewers Corona/Coors, and Miller and Heineken, which control 90% of beer production in the country — discriminate against small independent beer distributors and bodegas.

Even though bodegas sell 60% to 70% of all the beer in New York, the franchise wholesalers discriminate by refusing to give the independents a true wholesale discount and by charging bodegas more for beer than they charge chains and box stores.

“We are involved in a fight for survival,” Murphy said. “We cannot do it without beer sales” ______________________________________________________________________________

THE FUTURE “Industry Standards” are always at the forefront and a primary issue when two unions compete within the same industry. The following is a summary of some of the key differences in the Local 812 and Joint Board agreements:

Category Local 812 Joint Board Total Job Classifications 9 4

Vacation Pay 1/52 of total compensation

1/52 of average earnings (w/out overtime and special commissions included)

Driver Daily Pay Guarantees Yes No

Home D Rates

Guarantee of $200.00 (first three stops) and $50.00 for each stop thereafter $125.00

Driver Commissions - Upstate $.54 per each full case $.30 per each full case Reduction of Driver Commissions When Helper Employed No Yes - approximately 50% split Daily Overtime Yes - after 8 hours No (only after 40 per week) Warehouse Compensation $25.82 per hour $10.50 ($12.00 After 2 Years) Training Bonuses Yes No

Pension Fund Contribution $3.95/hour (all classifications)

Drivers - $3.63/hr Helpers - $1.52/hr Forklift Operators - $1.67/hr Warehouseman - $1.16/hr

Driver Pension Multiplier $100 per year of service (all classifications)

$32.00 per year of service for drivers (less for other classifications)

Employee Health Insurance Contributions (including dental) None

Individual - $336 per year Family - $864 per year

The disparity in Industry Standards is even more significant in this scenario where the Joint Board has only has one company compared to a dominant union that is dedicated to one industry like Local 812.

This situation is much more than that. I EMPHASIZE, this is not simply about wages and benefits nor is not about sick days, personal days or pension benefits. It is about density in the market and the future and survival of not only the industry but also the unions that represent the industry.

Again, it’s About the Future and the Survival of not Only the Industry but also the Unions that Represent employees within it.

The Manhattan/Phoenix combination is the beginning of enormous change in the New York beverage industry. This transaction will have a direct effect on every Beer Wholesaler, whether holding a Class C or D License, every supermarket chain, every drug store, bar, restaurant, corner convenience or bodega. It will further dictate the pricing for the New York metro beer market and force others to either consolidate like InBev “Anheuser Busch” by:

• Buying back the independent wholesalers in order to maintain control over its pricing and distribution so one wholesaler cannot undercut or trans-ship into another wholesalers territory to protect its own case volume by practice of significantly lowering case prices and thereby reducing their sales margin; and

• Muscle or bully distributors/wholesalers like Boening, Oak, Clare Rose and Cedar Beverages who distribute common, similar and even the same brands and distribution territories as Manhattan ex: Miller, Heineken, Guinness, Pabst Blue Ribbon Brooklyn Brewery, Sam Adams, and more with less than a third of the Manhattan Beer volume and sales.

These companies will be forced to sell the brands because their volume will significantly plummet due to the increase in trans-shipping and lower prices given by Manhattan Beer. Smaller companies like these cannot lower their prices or create substantial discount activity in order to compete with Manhattan Beer’s volume and their unlimited financial power.

This has taken effect already. In 2014, Manhattan Beer purchased the distribution rights to Corona or Modelo brands through Constellation Inc. a subsidiary of InBev “Anheuser Busch” or Budweiser wholesalers Dana, Dutchess and Bertolini Distributors.

DOMINANCE

This model can be created by “Brand Dominance”. Manhattan Beer, after this transaction, will have an unprecedented stable of brands including Corona, Heineken, Guinness, Sam Adams, Brooklyn Brewery, Miller and Coors products to name just a few.

No longer does Heineken and Corona fight for market dominance on the import side enabling the pricing schedule to never provide discounts or have one sell less than the other, the prices will be set strictly by the Brewery and the distributor no longer has to participate or “kick in” money in order to gain market share, price advantage or dominance in the trade which is used to gain extra shelf space, first position, displays and aisle wings, or for special ad activity and taps.

Now, Manhattan Beer can lower it’s domestics to (Coors Light, Miller, Miller Light) absurd rock bottom prices in order to undersell its competitors, Budweiser and Bud Light. Opening up the doors for significant volume, vehicle tonnage, dominant pricing and a totalitarian tap line up when adding Guinness, Sam Adams and Brooklyn Brewery.

Heineken, Corona and Guinness are the top 3 imports in New York. Now you add Sam Adams and Brooklyn Brewery which are the top 2 Craft Breweries in the country, then followed by low priced domestics Miller, Coors and Pabst Blue Ribbon? This is a monster and wholesalers dream as there is no weakness.

This will overwhelmingly change the pricing schedules and create brand dominance by Manhattan Beer in the market, whether it is on premises or off premises. At the end of the day it is one stop shopping with no relevant or capable competitor.

No wholesaler can compete or survive. Even Anheuser Busch will have to change its structure in order to compete. More specifically, Anheuser Busch will need to purchase all of its’ independent wholesalers over the course of five years in the NY, NJ metro market. This will begin with companies such as Ippolito Distributors and Bertolini Distributors in 2015.

When the dust settles, Manhattan Beer will immediately jump to the number two (2) beer distributor in the country. Leaping over companies like Silver Eagle, L.P in Texas, Ben E. Keith Beverages in Texas and Columbia Distributing in Washington. The only distributor larger that Manhattan Beer will be the Reyes Beverage Group (RBG) in Illinois.

New York is one of six major markets worldwide for the bottling industry. Employment in bottling, distribution, and sales is close to 7,000 people. The market segments in size order are soft drinks, beer, water, tea and juice. Wine and hard alcohols are also part of the increasing market, but the case volume is not yet very significant and is not included in the analysis. So as you can see by the charts, Local 812 and Manhattan Beer are the leaders in their fields.

Looking at the graph, the 4,000 men and women of Local 812 make up close to 70% of all the bottling, distribution employment in the New York area.

The 700 members of the Joint Board employed at Manhattan Beer make up approximately 11-13% of the industry’s membership density. The transaction with Phoenix will add another 7-8% propelling Manhattan Beer to a 20% share of total membership density.

While most might say it is only an 8% loss and Teamsters Local 812 is still the dominant Soft Drink & Brewery Union in New York, the true picture lies in the future consolidations that we are now seeing and which are poised to take place.

LOCAL 812 MEMBERSHIP DENSITY

COMPANY UNION EMPLOYEE DENSITY NY

a- This merger will force breweries to pressure the smaller companies like Oak, Boening & Cedar, all owned by the Boening, family to sell and or lose brands due to pricing and trans-shipping issues. This will virtually remove them from the equation. b- Manhattan Beer has already purchased the distribution rights to Corona or Modelo brands through Constellation Inc. from InBev Budweiser wholesalers Dana, Dutchess and Bertolini distributors which was effectively 30% of their business. c- Brooklyn Brewery has already informed those three companies of its intent and Guinness is in the process of pulling the brand. d- Other brands such as Yuengling and Pabst are also seeking ways to terminate their contracts with the Boening Family Warehouses and into Manhattan Beer. e- We expect that it will take less than 2 years for these three (3) Boening family owned companies that are represented by local 812 to be either sold or out of business. f- Finally, Heineken will buy out of their distribution contract with the Local 812 represented employer, Clare Rose distributors who is number 12 on the “Beverage Executive Top 20 Wholesalers” list and will then be awarded to Manhattan Beer as well. g- InBev or Anheuser Busch has already begun their consolidation of wholesalers in the region. InBev is currently purchasing Ippolito Distributors of Staten Island who is also a Local 812 company and they are on the verge of purchasing non – union Bertolini of Westchester County. h- InBev has communicated with Local 812 regarding their purchases as Local 812 negotiated recognition language in the 2012 Collective Bargaining Agreement for any wholesaler that is taken back and in Teamsters Local 812 territory. When I speak of the future and the changes that have begun due to this merger the future of the New York Beer Industry drastically changes. While Teamsters Local 812 may still be dominant in the New York Beverage market it will only be on the soda end.

But even soda is now deceiving. With sugary carbonated beverages on the decline and states taking steps to tax, limit beverage size and label them as unhealthy, beer and craft beer is the future of the Brewery & Soft Drink Industry.

As I stated in my opening (below) over the connection between Manhattan Beer and the Honickman Group another 900 Pepsi, Canada Dry and Snapple Local 812 member’s jobs are at stake.

Manhattan Beer Distributors was created more than 15 years ago in order for the Coors brand to be brought into the New York market by the Honickman organization, the largest independent bottler in the United States. The Honickman companies employ nearly 3,000 people in 12 states, with more than half (approximately 1,600) being employed in the New York market among three separate companies. 900 of these workers are members of Local 812 IBT, and 700 are members of SEIU working for Manhattan Beer. The Pepsi Bottling Company of New York, Inc. covers Westchester, the five boroughs of New York City and Long Island in regard to both production and distribution of carbonated and non-carbonated beverage products. The Canada Dry Bottling Company of New York, Inc. covers the total Hudson Valley, Westchester, the five boroughs and Long Island. These companies, along with Manhattan Beer are the Honickman companies operating in the New York region.

OUTLOOK IN JUST BEER MEMBERSHIP DENSITY 2017

So when we look at the likely outcome and the big picture, while Coca Cola and Anheuser Busch remain relevant they will make up just 25% or just one quarter of the entire New York beverage market which calculates to roughly 1,800 members. On the other side, the Joint Board would benefit from all the consolidations and grow to 5,000 members becoming the dominant beverage Union in New York.

Note: This does not even take into consideration of the Liquor,Wine and Spirits volume that is significantly moving towards the beer distributors.

In the end and within ten (10) years, Teamsters Local 812 will likely be faced with continous decertifications by powerhouse global giants in the likes of InBev and Coca Cola with endless bank accounts to further their efforts of “union busting”.

As noted in the beginning- “Teamsters Local 812 is currently the largest most recognized Soft Drink & Brewery local in the Teamsters and the United States representing 4,000 men and woman.

Teamsters Local 812 sets the standard for all beverage locals as it is the epitome of industry dominance representing 100% of innumerable job categories and positions in the Brewery & Soft Drink Industry.”

70%

17%

7% 6%

TOTALNYBEVERAGEMembershipDensity

Basedon7000members

ManhattanBeer/Pepsi/CanadaDry/Snapple CocaCola AnhueserBusch Other

If Local 812 is NOT the Manhattan Beer Bargaining Agent and the Joint Board becomes the victor, then the very fate of the Brewery and Soft Drink Conference and the standards that the Teamsters have worked so hard to achieve and maintain will have been lost.

To further express my point, the union that if “Sneezes everyone else in the conference catches a cold” will deteriorate and set back the Teamsters twenty years. This is not to mention lose one of the strongest, political affluent Locals in Joint Council 16.

CLOSING

I have elected to present this in a much different fashion than has ever been done before. That is because the circumstances are much different than ever before.

Past discussions on these issues have focused on contract differences, industry standards, better pensions, better health care and/or protection of rights. While all those items are certainly important, those differences and standards are only part of the overall picture here since they can be accomplished through collective bargaining in the event that there were membership growth and density.

If Local 812 loses this impending battle over the membership of Phoenix Beverage/Manhattan Beer employees, we believe that we will eventually lose an industry war. This will result in a loss of a core Teamster industry in the most recognized city in the world, one where unions still have a strong and meaningful presence.

Phoenix Beverages was the wedge that kept every beer company or wholesaler alive in New York. It created transparency and created equality in the industry so no one company could dominate. After April 1, 2015 that equality will be forever lost.

In short, what that means for the Unions in these companies is simple - whoever is the title holder as a result of this transaction will be the dominant union in the beer and non-carbonated beverage industry in New York. While some might suggest that I am overly concerned, I can assure you with all I have and the 25 years of experience in this industry, I am not. This transaction will define the future of the beverage industry in New York.

In closing, Local 812 does not represent or seek to represent laundry or needle workers, or even doormen. We were and remain built by real beverage workers, Coca Cola workers, Pepsi Cola workers, Anheuser Busch workers and more. We have all come from this industry, our relatives have come from this industry and our sons and daughters are coming into this industry. We will have virtually no chance and run the risk of demise if the Joint Board is successful.

I hope that this presentation defines the importance of these issues. This will either significantly help or hurt four thousand (4,000) loyal active Teamster members, totaling over 10,000 with retirees and their families, that depend on Local 812 each day.

General President Hoffa, I personally thank you in advance for any assistance you can be in solving the very serious dilemma that Local 812 faces.

In Brotherhood & Solidarity,

John Ulrich John Ulrich Vice President, Teamsters Local 812 Soft Drink & Brewery Workers Great Neck, New York