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The Legal Battle Over IL Distributor City Beverage Finally Comes To A Close

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With a few flicks of a pen today, Illinois Governor Pat Quinn signed HB 2606 into law effectively ending Anheuser-Busch’s minority ownership — and majority control — over distributor City Beverage.

The legislation, approved overwhelmingly by the Illinois House and Senate during the spring legislative session, would prohibit a brewer from owning a distributor.

Introduced in February, the bill specifically targeted Anheuser-Busch’s 30-percent stake in wholesaler City Beverage, which has four locations in Illinois; Arlington Heights, Bloomington, Chicago and Markham. The distributorship was seen as a pivotal piece in A-B’s attempt to chip away at MillerCoors’ stronghold on the Chicago market.

Anheuser-Busch has spent years and no doubt millions of dollars to hire lawyers and lobbyists to defend the legality of its ownership interest in City Beverage. And the brewer appeared to be in the clear last fall after the Illinois Liquor Control Commission sided with A-B, rebuffing claims by the Associated Beer Distributors of Illinois and Wine and Spirits Distributors of Illinois that the brewer was violating the Illinois liquor Control Act. Months later, in a rather surprising turn, A-B conceded to sell its interest in City Beverage and thanked lawmakers for giving them a few years to do so. The brewing giant’s admission came after meetings with the aforementioned distributor groups, MillerCoors and Senate President John Cullerton (D-Chicago).

Oh to have been a fly on the wall during those talks.

The ABDI, with its strong lobbying presence and deep pockets, led the charge under the statehouse dome.

“This has been a long, arduous process, but preserving a regulatory system that prevents illegal business practices, promotes competition, collects all liquor taxes due, and prevents counterfeit and illicit alcohol in the marketplace has certainly been worth it,” said ABDI President Bill Olson. “If brewers had been allowed to hold any interest in distributorships, the ability for new products to enter the market would have been limited.”

Illinois is the second state this year to pass a law making it illegal for a brewer to own a distributor. Ohio put a similar law on the books last month.

Anheuser-Busch now has until January 1st, 2015, to find a buyer for its 30-percent stake in City Beverage.

Ryan

About Ryan

With over fifteen years of news experience under his belt, Ryan spearheads The Guys in-depth coverage of beer news and craft beer legislation in Illinois and neighboring states. When he’s not digging through the annals of state government he’s looking for unique beers to cellar.

RyanThe Legal Battle Over IL Distributor City Beverage Finally Comes To A Close

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