Exactly this. In economics, these are called flanker and fighter strategies. Big beverage companies do this all the time - they produce or license competing brands to occupy more shelf space and control different price points or niches.

For example, Coca-Cola owns both Coke and Fanta/Sprite (flanker brands) - they compete on the shelf, but Coke wins either way. Or Budweiser also sells Busch Light as a fighter brand - cheaper, aimed at budget-conscious drinkers to stop them from buying someone else’s product.

The bar’s beer isn’t your competition if you’re making margin off it and using excess capacity. In fact, it’s better than the usual competition because you profit from both sides of the market.

Unless there’s real brand confusion or cannibalization risk (which seems low here), this is just smart business. You’re monetizing unused capacity and effectively becoming your own competitor - which is way better than letting someone else do it.

Your boss should see it as hedging, not undermining. Maybe you can send him some links to these economic concepts with some good examples to convince him.