Sparging The News: Breweries, Brewpubs & The Illinois General Assembly

In Beer Politics by Ryan

When it merits, GuysDrinkingBeer will bring you the relevant, generally-Chicago-centric information about what you’ll be imbibing around town. Here’s what’s running through our Mash Tun of Information:

The Illinois legislature is due to take up an issue near and dear to many of us during the spring legislative session; microbreweries and the distribution of their beer.

ilcapitol

Before we get to the gist of this new Illinois beer legislation, let’s get some background on why this is being discussed.  Lawmakers are taking up this issue because a federal judge said they have to.  This all stems from Anheuser-Busch’s attempt last year to gain self-distribution rights in Illinois.  The beer giant already owned a 30% stake in City Beverage and wanted to buy out the remaining 70%.  But the state’s liquor control commission said they would revoke their license if that happened because it would threaten Illinois’ three-tier distribution system.  So AB-InBev sued the commission essentially saying it wasn’t fair that an in-state brewery could self-distribute but they couldn’t.  A federal judge agreed and told state lawmakers they have until March 31st to fix the issue.  Here is Judge Robert M Dow Jr’s full decision.

Lawmakers in both the Illinois House and Illinois Senate have introduced bills to amend the liquor control act and make everything right with the world again.  Here are the additions and changes:

  • Includes brewers from outside of Illinois in the definition of a “brewer”
  • Includes distributors from outside of the state in the definition of a “distributor”
  • Distributors from outside of Illinois would have to acquire the proper licensing
  • Allows out of state dealers (brewers and brewpubs) to apply for an importing distribution license
  • Allows out of state brewpubs to sell to retailers, pending an importing distribution license
  • Defines a “Barrel” as 31 gallons of beer
  • Allows a brewer to make sales and deliveries to retailers as long as they produce 60,000 barrels of beer or less
  • A brewpub that currently holds a brewpub license and wants to sell beer to retailers would be required to get a either an importing distribution license or a distribution license

If you’d like to read the full text of the bill you can do so here.  It is not quite as boring as you might expect, and the changes are underlined making for quick skimming.

In a nutshell, this bill allows brewers that make less than 60,000 barrels a year to self-distribute and allows brewpubs that make less than 50,000 gallons of beer a year to self-distribute.  What I found interesting is the language that appears to address AB’s desire to gain self distribution rights in Illinois;  “A brewer may also make sales and deliveries of beer to retailers provided the brewer manufactures 60,000 barrels or less of beer per year and obtains an importing distributors license or distributors license in accordance with the provisions of this act.” Anyone think Anheuser Busch  produces less than 60,000 barrels, or 1.86 million gallons of beer, per year?  Didn’t think so.

Now before we buy a round of Dogfish Head 60 Minute IPA’s for everyone, there are still a few hurdles for this bill to clear.  First and foremost is getting approval from the Illinois Senate Executive Committee, where the bill is being heard today at 11:30.  State Senator Donne Trotter (D-Chicago) is the sponsor.  Now, during my time as a statehouse reporter in Springfield I don’t recall Donne being much of a beer guy but he is a member of the Senate Dems leadership team and is a whiz when it comes to the state budget.

There is a mirrored piece of legislation in the Illinois House, which is currently in the Rules Committee.  I covered the Illinois House for nearly 3 years and the Rules Committee was known as the place where, “good bills go to die.”  That is only a half-truth.  In the Illinois House ALL bills go to the Rules Committee first where they are reviewed by top ranking lawmakers, assigned to committees, sent back to the sponsoring lawmaker for some changes or…left there to die.  Don’t believe me?  Click here and see how many bills are before the committee right now.

Spearheading this proposal in the House are two lawmakers that have breweries in their districts.  State Representative Greg Harris (D-Chicago) and State Representative Mike Bost (R-Murphysboro).  Harris’ Chicago office is less than half a mile from Half Acre.  And Bost’s district houses Big Muddy Brewing Company, which boasts a dunkel named Saluki Dunkeldog – aptly named for the mascot of Southern Illinois University which is just up the road from Murphysboro.

photo courtesy Big Muddy Brewing

Bost is no stranger to Illinois’ Liquor Control Act.  He was on the front lines of legislation in 2007 that pertained to the shipment of wine in to and out of Illinois.  His district is also home to, arguably, some of the best wineries in the state.

The “X-factor” in this proposal could be the beer distributors.  I have reached out to Associated Beer Distributors of Illinois spokesman Bill Olsen to get his organizations take on the matter but he did not respond.  While the legislation appears to keep AB-INBev from self distributing in Illinois it does return distribution rights to smaller breweries.  Is that something the distributors would try and fight?  Now, I’m not going to go all “Beer Wars” on you, but let’s face it, beer distribution is a big business and granting self distribution rights to small brewers and brewpubs takes away from the distributors business.

I’ll be working my sources and network of contacts in Springfield to stay on top of this legislation.  Be sure to check back later today to see how this proposal fared in the Senate Executive Committee.

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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.

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