A Crash Course on the 3-Tier System is on Tap at Today’s Illinois Liquor Control Commission Meeting

In Beer News by Ryan

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Representatives from the three-tiers (manufacturer, distributor and retailer) will be on hand at this morning’s Illinois Liquor Control Commission hearing for what one insider is calling “HB 2606 101.”

Members from each tier will be asked to give a brief presentation and to answer questions pertaining to the brewer/distributor relationship. The hearing, open to the public, stems from a new law prohibiting a brewer from holding an ownership interest in a distributor. While the legislation, passed during the spring legislative session and signed into law this summer, specifically targeted Anheuser-Busch’s stake — through a wholly owned subsidiary – in Illinois distributor City Beverage it does impact who can own what moving forward.

Among the questions the Commission will be asking:

1. What is the extent of the authority that a brewer has over distributor managers/employees?
2. Does a brewer directly or indirectly control retail prices?
3. Does a brewer directly or indirectly control wholesale prices?
4. Specifically, how do brewers influence retail or wholesale prices?
5. Does the brewer directly or indirectly prohibit a distributor from selling competing brands?
6. Does a brewer require a distributor to gain product supremacy at a retail establishment?
7. Does a brewer finance the marketing operations of the distributor? How often? How much?
8. Does a brewer write the distributor business plan or approve the business plan?
9. Does the brewer audit distributor operations? How regular?
10. Does the brewer have first right to purchase the distributor?
11. Does the brewer have right of approval of a new owner?
12. Can a brewer prevent a distributor from forming a publicly traded company?

Representing craft brewers at today’s meeting are Illinois Craft Brewers Guild Executive Director Justin Maynard and President Pete Crowley, Kevin Cary from Begyle Brewing and the Guild’s lobbying firm Stricklin and Associates.

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About the Author

Ryan

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Equal parts beer nerd and policy geek, Ryan is now the curator of the Guys Drinking Beer cellar. The skills he once used to dig through the annals of state government as a political reporter are now put to use offering unique takes on barrel-aged stouts, years-old barleywines and 10 + year verticals.