AB InBev & WEDCO; It’s Too Quiet

“The well has run dry.”

“The state is circling the wagons.”

“All is quiet on the western front.”

You can use whatever cliché you’d like, but the bottom line is no one – and we mean NO ONE – is talking about the current state of AB InBev’s wholly owned subsidiary WEDCO and its ability to conduct business in the state of Illinois or the legality of WEDCO holding a minority stake in distributor City Beverage.

abinbevSo what does that mean? Well, we could have pissed off the wrong person – which, frankly, is not beyond the realm of possibility. Or, and this is the more likely reason; something is going to happen soon on one or both fronts.

In my decade-plus working in broadcast journalism I’ve found that when people stop talking publicly they usually are talking privately and, quite possibly, nearing a decision.

Could that decision come tomorrow? Maybe. The Illinois Liquor Control Commission is meeting in Springfield. And while no timeline was given to make a decision on WEDCO retaining its 30-percent stake in City Beverage the commission hasn’t spoken publicly about it since December of 2011. Continue reading

WEDCO, Round TWO

Just when you thought talking about business registration, regulations and tax law couldn’t get any more boring…it has.

The Illinois Secretary of State’s Office just finished its first review in to claims that Anheuser-Busch InBev’s wholly owned subsidiary WEDCO – which holds a minority interest in the Chicago area and downstate distributor City Beverage – is breaking the law by not registering the company with the state.

If you care to get caught up, you can read all about the initial claims HERE.

I had a chance to speak with Terry McConnville, Assistant General Counsel for the Secretary of State’s Department of Business Services, who is handling the investigation. Unfortunately the juicy aspects of his investigation – if there are any – are confidential. That includes everything the state is asking A-B InBev and their responses. But, McConville did tell me that, as of right now, it appears A-B InBev is NOT breaking the law. But, just to be certain, he is sending a second round of questions to the brewing giant’s lawyers. Continue reading

Save The Craft: Anheuser-Busch InBev; The Response Is In

We received word late yesterday that Anheuser-Busch InBev has formally responded to the Illinois Secretary of State’s inquiry in to the brewing giant’s wholly owned subsidiary, Wholesaler Equity Development Corporation – or WEDCO. WEDCO currently owns a 30% stake in the Chicago area and downstate distributor City Beverage. The state is now reviewing A-B InBev’s response and will issue an opinion in a matter of days.

If you are just joining us on this issue here’s a recap. It came out during a hearing before the Illinois Liquor Control Commission last month that WEDCO was not registered to do business in the state of Illinois. Normally that wouldn’t be a big deal because WEDCO does not have outright ownership of a company – in this case a beer distributor. But, according to Illinois Liquor Control Commission spokesperson Sue Hofer, things are a bit different when you are talking about liquor. “The Liquor Control Act requires all owners and officers of a licensed corporation to qualify in the same way that the licensee corporation qualifies,” said Hofer.

If the Secretary of State’s Office finds WEDCO operated in Illinois without being registered, Anheuser-Busch InBev will face a number of fees, fines and late payments – with interest.

A-B, WEDCO & Illinois

As beer-industry bombshells go, a pretty substantial one was dropped during a hearing last Wednesday involving Anheuser-Busch, distributors in Illinois and the Illinois Liquor Control Commission.

We told you about the hearing last week, but to quickly recap, it was held to discuss A-B’s 30% stake in City Beverage, which is made up for four distributors (Chicago, Markham, Arlington Heights and Bloomington). At the heart of the debate was whether A-B can still have a hand in a distributor now that there is a new law on the books seemingly preventing a brewer from also owning a distribution outlet.

For the record, A-B doesn’t actually have the 30% stake in City Beverage. WEDCO, or Wholesaler Equity Deveopment Corporation, a wholly owned subsidiary of A-B is actually on record as having the 30% stake in City Beverage. But here’s the aforementioned bombshell, and the thing that reportedly raised some serious eyebrows at the ILCC hearing:

There is NO record of WEDCO being registered in Illinois. 

None. Zero. It is not a business licensed to do business in the Land of Lincoln. Continue reading