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An Exit Interview with ABDI President Bill Olson: Part 1

In Makers by RyanLeave a Comment

Associated Beer Distributors of Illinois President Bill Olson is stepping down at the end of the year ending a nearly 30-year run at one of the most powerful lobbies in the state. The man has seen a lot and done a lot and has been at the forefront of some of the most important pieces of legislation impacting the craft brewing industry in Illinois. And we wanted to hear all about it.

So, at the end of the first week of the legislature’s fall session I was granted unfettered access to Olson to talk about his time at the ABDI, the changes he’s seen in the distribution industry and Illinois politics and what really went on behind closed doors when those key bills were negotiated.

In an over hour-long conversation Olson talked quite candidly about the negotiations on SB 754 (self-distribution) and HB 2606 (prohibiting a brewer from owning a distributor). In the first of this two-part, Guys Drinking Beer exclusive, Olson looks back at his time under the statehouse dome, the changes he’s seen in Illinois politics and the distribution industry as well as a sneak-peek into the early negotiations into SB 754. We know this is going to come off a bit wonky and it’s not all about beer — but this does play into the bigger of picture of how beer legislation works in Illinois.

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Guys Drinking Beer: We’ll start off with something easy: Who is Bill Olson the drinker? Are you a whisky guy, a scotch guy or a beer guy?

Bill Olson: You know, I’ll imbibe in all three: wine, spirits and beer. It sometimes varies on occasion. A beer is still the best thing to have, for me, in the summertime and when you want to cool off – refresh yourself. Then there are other times when you are sitting down to dinner and it’s more of a cocktail thing. I don’t have any one particular favorite. I’ll just…drink it all.

GDB: You don’t discriminate. I can appreciate that.

Let’s talk about your time here at the ABDI. You’ve been here for almost 30 years. Talk to me a little bit about what you’ve seen over that time with the distribution industry. What kinds of changes have you seen?

Olson: The biggest change has been in the number of distributors. When I started in 1985 we had, if I can recall right, 178 distributors. Just about every town, community – Peoria, Kankakee, you name it – had anywhere between one to three distributors in it. That was their main warehouse location. And over the years, what we’ve seen has been consolidated.

And it’s all caused by trying to remain competitive. Because, as your competitor gets bigger, their costs get reduced so if you’re going to compete with them then you’ve got to consolidate with someone else. It’s all economics of scale so they can keep their costs down, remain competitive, and still sell beer to retailers at a price where they can stay in business.

That’s the biggest change because the amount of beer sold in the state hasn’t varied that much. But the number of distributors has gone from 178 to, I think, 62.

GDB: Has that been good for the consumer?

Olson: I think it has allowed for a lower price to retail by cutting costs. Yes, the consumer has benefited from that. We want to stay in business. We’ve got to be competitive: competitive is the lowest price you can sell to the retailer and the lowest possible price are passed on to the consumer.
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The whole General Assembly would go to it and they’d interact and they’d talk and they’d get to know each other as people. And I think that type of interaction has just disappeared. You just don’t see legislators interacting with each other on almost any occasion.

GDB: Looking bigger picture politically in Illinois – beyond just a new governor or a new speaker of the house, not that we’ve had one of those in a while – what kind of changes have you seen at the statehouse in that political environment?

Olson: When I first started it was a lot less partisan. People could separate the difference between their political party and just being a legislator and working to pass laws that are going to affect all the people of the state of Illinois. The biggest change I have seen is that the parties don’t interact – legislators don’t interact like they used to.

I’ll tell you a story or two here that are funny, that people wouldn’t believe today. When I first started there were at least three dinners, one was like the Soul Food Soirée, one was an Italian dinner and another one was a dinner put on the by the Polish and the Irish. The point was that the legislators, whether they were Polish or Italian, would get together – both sides of the aisle both houses – and say we’re all Italian legislators, Italian heritage legislators, let’s throw a dinner…evening…banquet…dance…whatever – Just celebrating being Italian and our Italian heritage.

They organized it. Nobody else organized it. The legislators organized it and did all the work for it. The legislators sold the tickets but it was not a fundraiser. The price of the ticket was basically the cost of putting on the event. But what they did is it brought everybody together.

The whole General Assembly would go to it and they’d interact and they’d talk and they’d get to know each other as people. And I think that type of interaction has just disappeared. You just don’t see legislators interacting with each other on almost any occasion.

I’m talking about the entire General Assembly being together. Maybe not everybody showed up, but at that time you had 177 members of the House and you might have 100-some show up at this thing. And you still had 59 in the Senate and you might have 40-some show up. But they had occasion to talk to some people that they normally don’t talk to – somebody from the other party maybe a downstate something talks to a Chicago somebody – and actually find something in common that they could talk about.

And it built a camaraderie and a rapport that is absolutely missing today.

GDB: Is there anything that you can point to or look back on over the stretch of your career – a turning point where things changed? Whether it was personalities, or mirroring things in [Washington] D.C., or just a change in mentality for politicians in general that has led to this partisanship?

Olson: It’s interesting that you talk about mirroring D.C. because that is something that pretty much has happened here, and legislators today don’t even know it has happened.

The idea in Washington is that you have a rules committee and leadership controls all the process and which bills get to the floor. There was a time [in Springfield], if a legislator was told “your bill’s not going to get to the floor,” they would throw a fit and say “I’m elected to represent the people of my district. I’ve got constituents who care about this bill. Get my bill to the floor.”

Leadership wouldn’t really even take exception to that. That was the way at the time. But when you put in rules committees and all the other steps in the process that have created these hurdles, the individual legislator having control over their legislation has been lost.

GDB: You talking about that reminds of stories my former bureau chief used to tell me, in the 70’s and 80’s, where it would be the end of session and lawmakers would be heavily debating a bill – it would fall short – and they [some of the lawmakers] would kind break in to an informal conference committee in the back of the chamber and huddle up and they’d come back – and whatever they talked about – was enough to get it done [pass the bill].

It sounds like today, with the rules committee and such a tight control over bills, that lawmakers don’t have the opportunity to negotiate with others to get things done because their bill may not see the floor.

Olson: I don’t know if it was done as informally as you’re referring to, but a common occurrence was conference committees to resolve the differences between the houses. That would require, if one house had amended a bill, and the initiating house refused to agree to that amendment and the house that put the amendment on refused to take it off.

So they would call a conference committee because each body had voted on the same bill number but a little different content. There would usually be ten people, five senators, five reps, three from the majority party in each house and two from the minority party.

And they would actually meet and discuss and resolve differences and they would have somebody – a staff person – write a conference committee report. The conference committee report would then become the bill and it went back to floors of both houses to be acted upon.

Now, sometimes it failed and they would even appoint a second conference committee to resolve what the problem was with the first conference committee. But they had a method where it was the main interested parties, those being the legislators most directly affected by the legislation or having an interest in the legislation or being knowledgeable in the legislation, who would be talking about how to fix the problem.

We haven’t had conference committees around here in a long, long time. And part of that is because it can’t be controlled. Once the conference committee meets and comes up with a bill, it doesn’t have to go through rules committee.

Now the only instance of a conference committee that has been appointed is the one that is trying to work on pension reform. Outside of that I can’t think of the last time there was a real conference committee appointed. There used to be dozens of them at the end of every session.
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If you’re a person that likes order, routine, you’ll go nuts on this job. You just can’t do it. So it takes a certain type of personality. But it is wearing. It’s a never-ending keeping your eye on the ball and seeing what’s going on out there and not letting something happen and not be prepared for it.

GDB: Moving back to present day, as you stare down December 31st when you step down officially as president, do you feel like you’ve been able to accomplish everything you’ve wanted to accomplish?

Olson: What you accomplish in this business is often dependent on what needs to be done. It’s not necessarily setting out a path ahead of time of saying, “these are the things I want to accomplish at the start of a session or during a session.” The situation arises that it has been addressed. And then you have to find a way to address it and resolve it.

From that standpoint of being able to address issues and problems as they have arisen over the years I’m pretty happy with the way we’ve addressed those things and resolved them.

GDB: Why are you retiring?

Olson: One, I’m 67 years old. We had a mandatory retirement age of 65 but the board passed a special resolution overriding that policy and allowing me to continue until such time as we reached an agreement where I wanted to retire and they felt comfortable enough to let me go. I can honestly say that I think am looking forward to it. All the stuff that goes on here is so interesting and fascinating and it was a great career but it’s wearing on me.

One of the things that the average person doesn’t understand about the lobbying aspect of this General Assembly is that everything is out of your control. Lobbyists aren’t in control of almost anything. They are constantly in reaction mode. Somebody puts in a bill, an amendment, this is going to happen, there’s going to be a hearing.

They [the lawmakers] don’t call us up and say when there’s going to be a hearing: “Does this work out in your timeframe?” No, they don’t.

If you’re a person that likes order, routine, you’ll go nuts on this job. You just can’t do it. So it takes a certain type of personality. But it is wearing. It’s a never-ending keeping your eye on the ball and seeing what’s going on out there and not letting something happen and not be prepared for it. So that, in context of me retiring, I think I’ve got to say I’m tired of those types of constant pressures on me and I’ll be glad to get them off my back.

GDB: As in retiring, you’re not just leaving the ABDI to go work somewhere else, you’re retiring, retiring?

Olson: Yeah, I’ve had that question asked of me, Ryan, that after you retire – what do you plan to do? And I’ve found there are basically two bodies of thought: there’s the group that says, “Oh you have to have a plan or you’ll just go nuts.” And then there’s the group that says, “Don’t have a plan, just enjoy doing nothing for a while. Things will come to you, that you’re interested in, but let them come to you rather than jump into something right away.” I am in that mode.

I’m going to retire and take some time and then if things arise where I have an interest in it or someone approaches me and what’s me to help them – you name it – it could be charity it could be government affairs, it doesn’t matter. But something will interest me enough that it will start filling my time, I have no doubt about that.
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Quite honestly we were sensitive to the fact that these small brewers had already started self-distribution and at least one case, probably more, needed that ability to get their brewery going. We didn’t have a problem with that. We understand that there is some merit to a small brewer self-distributing…

GDB: Looking back at some specifics from the last couple of years, SB 754 first comes to mind. I’m curious about the Anheuser-Busch/City Beverage aspect of that. It seemed that there were two intentions of that bill. One dealt with small brewers and the other appeared to deal with Anheuser-Busch and City Beverage.

Some of the floor debate and statements included the fact that a brewer can’t own a distributor, but that language wasn’t in the bill. If you could go back and redo anything about that bill would you have included that specific language in the bill and if so could that have avoided the long, drawn out hearing with the Illinois Liquor Control Commission over the issue?

Olson: Well, if it could have been put in we anticipated it would have automatically prevented the hearing. But let’s remember the starting point on this and that was the decision that Judge Dow rendered in AB vs Schnorf and that was over the question primarily of, “can a brewer own a distributorship?” And Judge Dow ruled that, in his decision that I am going to rule that – level down – no brewer can own a distributorship. And if that would have gone in to effect – and he knew it – that two small brewers that started the problem, the problem being that the commission gave them a distributorship license with the understanding that they were just going to self-distribute, but it was a full distributorship license. There was no way under that license to limit them to self-distribution. The judge said, “you’re right, there is discrimination here between in-state and out-of-state.” So the judge said, “nobody can distribute.”

Now, right there, we could have stopped. Let that opinion go into effect, and we would have had our goal of preventing a brewer from owning a distributorship. Quite honestly we were sensitive to the fact that these small brewers had already started self-distribution and at least one case, probably more, needed that ability to get their brewery going. We didn’t have a problem with that. We understand that there is some merit to a small brewer self-distributing in order to do what any brewer needs to do: create a good product, get it out in the marketplace, create a consumer following and then be able to produce enough that you have a stream of product to replenish it.

It doesn’t matter if it’s Anheuser-Busch or the smallest craft brewer out there, if that brewer can’t make a good product nobody is going to distribute it. If they can’t create some interest in it through marketing so people know the brand, it’s not just going to jump off the shelf into people’s carts. You have to create some consumer following, get the buzz going, people like it – they want to see it in more places. The best way for a lot of small brewers to get going on all that is to self-distribute because they can target a few places, get the brand’s name out there, and we understood that. And we worked with a couple of those that were going to lose their self-distribution license. And they made these arguments and we agreed with them that there was some merit to some limited self distribution to get going. And we asked them, we said, what do you need to reach that level where you think you no longer need that boost to get your product out in the market and get going and they said 7,500 barrels. We didn’t say it, they said it. We said, “Fine, okay.”

But we need to have some way to avoid this discrimination problem that was in the suit that we are really trying to solve. Remember, the legislation was to address the opinion issued by Judge Dow and the suit. So it did have two aspects. It had one, to maintain the part where Judge Dow said nobody can distribute, including Anheuser-Busch InBev. And it also addressed the other part that said even the small brewers were going to lose their distribution license and we were going to work with them so they could have some self-distribution.

So that’s what happened on the bill. It was a balancing act between those things. We were very sensitive to other cases out there in other industries and our industry, that if you make an exception too large it becomes a preference for in-state brewers. And if you do that you are right back to where you started with the discrimination between in-state and out-of-state and we tried to accommodate that by saying, no matter what, if you are small brewer out-of-state making less than 15,000 barrels they could self-distribute in here too. We tried to resolve the commerce clause issue.

Now, we thought that was all we had to do because we were implementing Judge Dow’s decision. As far as we were concerned the judge had already ruled that it was illegal for a brewer to own a distributorship, under the law that existed in that point and time. We didn’t see any need to go any further than that, than to just keep current law in tact and make an accommodation to the small brewer to have some self-distribution.

Then the commission decided, oh, well, let’s go back on this whole thing and start trying to create our own analysis of what happened – entirely ignoring the situation, ignoring the suit they were involved in and ignoring the decision of the judge and just started all over again from the bill that was before them. And they re-argued the case that the judge had already decided, that current law already prohibited a brewer from owning a distributorship.

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We’ll have much more from our exclusive conversation with Olson Friday on the SB 754 negotiations including a claim that he was duped by a Chicago brewpub during late talks on the bill. We’ll also get his take on Anheuser-Busch and why the brewing giant was quick to agree to relinquish their ownership interest in distributor City Beverage.

Ryan

About Ryan

With over fifteen years of news experience under his belt, Ryan spearheads The Guys in-depth coverage of beer news and craft beer legislation in Illinois and neighboring states. When he’s not digging through the annals of state government he’s looking for unique beers to cellar.

RyanAn Exit Interview with ABDI President Bill Olson: Part 1

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