Here's the link for the press release on the Brewcraft purchase: http://www.graincorp.com.au/media/2010%20Media/Great%20Western%20Malting%20Company%20Purchases%20Brewcraft%20USA.pdf
How is public wholesale grain sales not undermining the retail network? Look at the empty storefronts on Main Street in any small town with a Wal-Mart a few miles away. Same difference.
In fact, I carry a Northern Brewer catalog in my briefcase to check my prices against, and will check prices online sometimes, so that I have realistic and competitive prices, and sales tax is generally less than shipping on a small order under $120 or so. I have been homebrewing and making wine since 1978 and selling supplies since 1991, and have some commercial winery experience. I haven't done it all yet, but I know more than most of the people who walk into the shop, and am able to help the ones who are able to listen.
The club I helped found 15 years ago has essentially divorced me over just the discussion for a bulk malt order. Unfortunately it was done entirely on the club's Yahoo Groups site, I was not able to talk to anyone in person in the couple of weeks it took for everything to fall apart. They said, let's do a bulk order, I said, OK, let's work out details, here's my wholesaler's website so you can see what is available, I guess I could do a 15% discount. They said, oh no, we want more like a 25% discount, and we don't want to pay sales tax (3% on food). 15% is about the limit of my profit margin in a good year, never mind when I am paying off a loan needed to recover from a flood that almost killed the business a year earlier. The guy who spends $600 a pop on wine kits, and the commercial winery that occasionally needs something, are happy with 5% off. Then someone who was trying to be helpful said, hey, look at the North Country Malt website, maybe their prices are better than your wholesaler's (nice selection, but about the same price level as it turned out). Someone else said, hey we could order together and you could take what we don't want of the specialty grains and sell it in the shop. Well, there is no way I could buy maybe 20-25 pounds of something I may only sell 5 or 10 of in a year (less, with the club not needing any), plus a legal-for-trade scale to weigh out pounds with. The club was wanting me to sell at a loss, evade taxes, do most of the work and paperwork,and take on extra expense and inventory that would be stale before it was all sold, all on the off chance that they would buy something else at regular price. Try that in any store and see how far you get. It's not realistic. So I said, all you need now is someone with a credit card and a forklift. The 55 pound bag of pale malt that was on the shelf when all this happened is still there, a year and a half later, until I use it, most likely. Net result, instead of being on the shelf, big bags are now special order, come back next week. I have about 30 different specialty malts, but no more than 5 pounds of each, and 3 to 5 base malts in 10 pound bags. I still relax, don't worry, and have a homebrew, and save money and time by being home and brewing instead of driving 70 miles round trip to a club meeting that was getting less enjoyable every time I went, even before this happened.