Legislation To Strip ABI Of Its Stake In IL Distributor City Beverage Is Picking Up Steam

In Beer News by Ryan1 Comment

CITY BEV beverage_chicagoProposed legislation that could ultimately force Anheuser-Busch to divest its ownership interest in Illinois distributor City Beverage is gaining momentum in Springfield.

Mirroring pieces of legislation in the Illinois House and Senate were approved, unanimously, in committee prior to lawmakers departing for a two-week spring break.

Legislators return to the capitol this week.

The legislation appears to clearly define who can and who cannot hold an interest in an Illinois distributor, according to a synopsis of the bill posted to the Illinois General Assembly’s website.

“Provides that no person licensed as a manufacturer of beer by any licensing authority, or any partnership, corporation, subsidiary, limited liability company, trust, agent, affiliate, or other form of business enterprise thereof, shall have any interest, directly or indirectly, in a holder of a distributor’s license or importing distributor’s license,” according to the synopsis.

The legislation also lays out a step-by-step process to revoke the licenses of manufacturers found in violation of proposed law.

The bills, SB 1855 in the Senate and HB 2606 in the House, were introduced in response to a Halloween day ruling by the Illinois Liquor Control Commission allowing ABI to maintain its minority ownership interest in the four City Beverage distributors through a wholly owned subsidiary, Wholesaler Equity Development Corporation, or WEDCO.

In fact, in its controversial ruling the Commission challenged the General Assembly to tackle the issue head on. “[T]he Commission respectfully requests that the Illinois General Assembly consider the issue of whether to amend the Illinois Liquor Control Act to clearly redefine the historic three-tier system of alcohol regulation in Illinois as it applies to allowable ownership interests so as to prevent cross-ownership among tiers…”

Last years ruling went against the Commission’s own legal counsel who cited ABI over the summer for violating the Illinois Liquor Control Act.

Currently, in the House, 61 lawmakers have signed on in support of the legislation. In that chamber, 60 “yes” votes are required for passage. In the Senate, where 30 “yes” votes are required to pass a bill, a bipartisan coalition of eight high-profile lawmakers are publicly supporting the legislation.

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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.

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