Save The Craft: Picking Up Where We Left Off

In Beer Politics by Ryan

A little over two weeks ago the future of craft beer in Illinois rested in the hands of the Illinois Senate. Senate Bill 754 was positioned for a vote in the “upper chamber” but was never called for third reading before senators ducked out for a two week spring break. Lawmakers are due back in Springfield today with a looming May 31st deadline to pass legislation continuing the self-distribution rights of craft brewers in the state.  With that in mind we thought we should give you a refresher course on where things stand and what new developments, if any, have transpired over the last few weeks.

First, a refresher on SB754:

  • The barrel limit for breweries and brewpubs that want to self-distribute is now 7,500 barrels. That is down from 60,000 barrels and 20,000 barrels respectively.
  • The bill creates the classification of “Craft Brewer” in Illinois and defines it as, “a licensed brewer or licensed non-resident dealer who manufactures up to 465,000 gallons of beer (or 15,000 barrels) per year and who may make sales and deliveries to importing distributors and distributors and to retail licensees…”
  • A licensed “Craft Brewer” can apply for a self-distribution exemption through the Illinois Liquor Control Commission. In that application the licensee must state, “its efforts to establish distributor relationships; (4) that a self-distribution exemption is necessary to facilitate the marketing of its beer…”
  • Someone who holds a brewpub license can also apply for a “Craft Brewer” license in order to self distribute their beer with a caveat, ” if he or she otherwise qualifies for the craft brewer license and the craft brewer license is for a location separate from the brew pub’s licensed premises.”
  • Once the licensee exceeds the 465,000 gallons of beer per year cap they lose their right to self-distribute.

The barrel limit and requirement for brewpubs to have a separate location caused the Illinois Craft Brewers Guild and Associated Beer Distributors of Illinois to flip their opinions on the legislation.  Originally the Craft Brewers Guild supported the legislation, because – in part – they wrote it, and the beer distributors opposed the measure.  Now, the brewers guild opposes the current bill and the beer distributors support it.  Here is a breakdown on where each side stands and why.

  • The Associated Beer Distributors of Illinois: The ABDI represents distributors across the state, and has opposed the legislation from the get-go.  They are willing to allow Argus Brewery in Chicago and Big Muddy in Murphysboro to continue to self-distribute but no one else.  They balked at the original 60,000 barrel limit for self-distribution and did not want to extend the right to self-distribute to brewpubs.  ABDI supports the current legislation because of the lower barrel limit for self-distribution.
  • The Illinois Craft Brewers Guild: They represent brewers and brewpubs across the state, wrote the original legislation and have been on this like a hawk since the get-go.  They supported the previous 60,000 barrel cap for breweries to gain self-distribution rights and the 50,000 gallon limit for brewpubs to self-distribute.  They oppose the current legislation because they don’t feel the current self-distribution limit of 7,500 barrels is high enough and they don’t like the restriction placed on brewpubs requiring them to have a separate “location” in order to acquire a “Craft Brewer” license and handle their own distro.  This is the specific line the ICBG is referring to; “A person who holds a brew pub license may simultaneously hold a craft brewer license if he or she otherwise qualifies for the craft brewer license and the craft brewer license is for a location separate from the brew pub’s licensed premises.”
  • Chuck Stuhrenberg, founder of Big Muddy Brewing in Murphysboro:  Big Muddy is one of two breweries in the state that exercises its right to self-distribute.  While Chuck is a member of the craft brewers guild he has been representing his own interests during negotiations.  Chuck currently supports SB754.
  • Anhueser-Busch: A-B and its army of A-list lobbyists are working to kill this legislation and possibly push to gain self-distribution rights or a majority stake in City Beverage.  The latter  is what brought this issue to the General Assembly in the first place.
  • MillerCoors: There’s talk that they may be backing anything that AB is against in an attempt to keep their top competitor from gaining more ground in Chicago.
  • If you’re looking for a point of comparison to the 7,500 barrels currently proposed for self-distribution, Half Acre brewed around 2,000 barrels in 2010.  The same goes for Metropolitan BrewingBig Muddy is closer to the 500 barrel mark.
  • If no bill is passed by May 31st and the federal judge does not issue a second stay then both Argus and Big Muddy will lose their self-distribution rights as will every future brewery and brewpub in Illinois.

We’ll repeat that, since we believe it’s the most important point:  If all parties remain deadlocked and no agreement is reached or enough support is garnered, it means the end of all self-distribution rights for microbreweries and craft brewers in Illinois.  If that doesn’t seem like much to you, look at it this way: it slams a door shut that will be extremely hard to reopen in the future.  As we’ve said, if you’re a fan of microbreweries or local products, and want to support their products over the InBevs of the world, it’s in your best interest to look closely at this – and act accordingly.

The bill’s sponsor, State Senator Donne Trotter (D-Chicago), also left us with an odd twist before departing for spring break.  He said he didn’t call the bill for a vote prior to leaving because he wanted to go back to the negotiating table with Anheuser-Busch.  Why did this move cause us to raise an eyebrow?  As we wrote at the time, the move didn’t seem to make much sense considering A-B’s endgame.

“Anheuser-Busch intends to do everything in its power, evident by employing now thirteen fourteen lobbyists, to stop any bill extending self-distribution rights to craft brewers and brewpubs and wants to to take its chances in federal court. The court’s initial remedy was to take away the self-distribution rights of current and future breweries in Illinois. State Senator Donne Trotter, the sponsor of legislation continuing the rights of breweries in Illinois to self-distribute and extending the same rights to brewpubs, wants to go back and talk with Anheuser-Busch.”

It appears that meeting did happen and, according to an article in Springfield’s State Journal Register on Rolling Meadows Brewery, nothing changed.

“Some of the participants wanted to have another discussion before we passed it,” Trotter said. He said that discussion has taken place, but “I’m not inclined to make any changes.”

That could also likely mean any attempts by the Illinois Craft Brewers Guild to up the barrel limit for self-distribution or remove the location provision for brewpubs fell short.  We heard from a number of people over this two week stretch that felt the “compromise” legislation was unfair to craft brewers and others who felt it was fair enough.  Chicago Bars made, on Twitter, what may be the most sensible observation about this legislation that we’ve heard to date.

“@guysdrinkinbeer Any bill that AB InBev’s lobbyists & some of the craft brewers hate that much has to be a perfect compromise.”

The only other development of interest is that SB754 did pick up another co-sponsor.  State Senator Tony Munoz signed on in support of the legislation joining chief sponsor State Sen. Donne Trotter (D-Chicago) and State Sen Dave Luechtefeld (R-Okawville).  So…there’s that.

As always, we leave you with this: Please, call your representatives and state senators and tell them how you feel about this bill.  We’re in the stretch run of this process and your input is needed now more than ever.  If you’ve called or emailed before, then tell a friend.  Tell a person at the bar.  Talk to the person pulling that 6’er of local beer out of the cooler.  Every little bit helps us Save the Craft.

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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.