Bill Prohibiting A Brewer From Owning A Distributor Passes IL Senate, Headed To Gov’s Desk

In Beer News by Ryan

Legislation that would make it illegal for a brewer to hold an ownership interest in an Illinois distributor cleared the state Senate Tuesday on a unanimous, 52-0 vote. The bill previously passed the House and now goes to the governor for his signature.ilcapitol

Once signed into law, the bill will effectively end Anheuser-Busch’s minority ownership interest in, but majority control of, Illinois distributor City Beverage.

The wholesaler, which has four locations in the state, was the focal point of a bitter dispute before the Illinois Liquor Control Commission that began in 2010 and culminated last fall when the Commission voted to allow A-B to retain its 30-percent interest in City Beverage. The vote went against the Commission’s own legal counsel, who cited A-B over the summer for violating the Illinois Liquor Control Act. Commissioners voting in the affirmative said Illinois law was too vague in regards to who can and who cannot own a distributor and challenged the Illinois legislature to address the issue directly.

State Senator Tony Munoz (D-Chicago), chief sponsor of HB 2606 in the Senate, says the legislation does just that. “HB 2606 reaffirms Illinois’ policy and the State’s regulatory structure that manufacturers of beer, including out-of-state brewers, are prohibited from holding a distributor’s license, from owning any ownership interest in a distributorship, and from exercising vertical integration between a manufacturer of beer and a distributor or importing distributor through any ownership interest or through control of the distributor or importing distributor,” said Munoz.

Anheuser-Busch, last month, publicly conceded to selling off its interest in City Beverage by 2015 – as the pending new law dictates.

The Associated Beer Distributors of Illinois, and powerful lobbying arm for distributors in the state, was among the groups pushing for passage of the bill. ABDI President Bill Olson says the bill’s passage means Illinois will remain an open market for new local and regional craft brands. “If brewers had been allowed to hold any interest in distributorships, the ability for new products to enter the market would have been limited,” said Olson. “Brewer-owned distributorships would have no incentive to carry brands other than their own.”

We have reached out to Governor Pat Quinn’s office to see if he’ll sign HB 2606 once it arrives on his desk. We are still awaiting comment.

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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.