This morning an army of attorney’s representing Anheuser-Busch InBev will descend on the Michael A. Bilandic Building (pictured above) in downtown Chicago for the first substantive hearing since the Illinois Liquor Control Commission announced, in June, it is forcing Anheuser-Busch to divest its minority stake in Illinois distributor City Beverage.
There are four City Beverage locations in the state. Three of those locations are in the Chicago area; Arlington Heights, Chicago and Markham. A fourth location is in downstate Bloomington.
Anheuser-Busch currently has a 30-percent stake in the distributor through a wholly owned subsidiary named Wholesaler Equity Development Corporation or WEDCO.
AB InBev’s stake in City Beverage has been a hotbed of debate for months in Illinois because of a new law, passed last summer, that clearly spelled out who could and who could not self-distribute beer in Illinois. The new law raised the question; is a brewer holding even a minority stake in a distributor against the law because it is akin to self-distribution?
The Liquor Control Commission, in a citation (below) delivered to A-B, said the brewing giant is in fact breaking the law.
“4) That based upon 1) Declaration A of a March 10, 2010 decision of the Illinois Liquor Control Commission (ILCC); 2) Illinois Public Act 97-0005 commonly known as the Craft Brewer’s Act; and 3) Commission finding (F) from “Findings from the 12/7/2011 Meeting Regarding the Anheuser Busch Ownership Interest in City Beverage, LLC” dated May 9, 2012, an Illinois licenses Non-Resident Dealer and Illinois licensed Manufacturer of alcoholic liquors shall not posses an ownership interest in or management control of an Illinois licensed Distributor of alcohol liquors.
5) Based on the law and facts alleged in this notice, the Legal Division of the Illinois Liquor Control Commission recommends that the City Beverage, LLC licenses be revoked and that the revocation be stayed pending the divestiture of ownership interests of Anheuser Busch, LLC and its affiliates from City Beverage, LLC.”
On the agenda (also below) today are oral arguments on any motions filed prior to the hearing. According to the schedule released by the ILCC motions were to be filed by July 18th and responses to those motions were to be filed by July 27th. Prior to any arguments on the motions today there will be a pre-hearing conference to discuss any witnesses, documents or other evidence that will be used.
There may also be a revelation by the commission that they are expanding the scope of their investigation into Anheuser-Busch and City Beverage. A source informed us, late last week, of a possible amended citation seeing the light of day at today’s hearing. We reached out to a spokesperson for the commission who would not confirm nor deny that the citation would be amended only going as far as saying, “It’s up to the commissioners to determine when and what documents shall be released. They may make that decision as early as this Wednesday.”
We have eyes and ears in the hearing today and will bring you the latest information as soon as we have it.
Illinois Liquor Control Commission Citation
Illinois Liquor Control Commission Agenda For August 8th