This is the first installment in a newly re-branded series that we’ve actually been doing for a few years here at Guys Drinking Beer but didn’t quite know it: Makers.
The series features Q & A’s and interviews with brewers, owners and interest group presidents giving you a unique look at what happens behind the scenes at some of your favorite breweries or inside the statehouse, where Illinois’ beverage industry policy is shaped.
Today, we feature a timely sit-down with Bob Myers, President of the Associated Beer Distributors of Illinois. Bob spoke, quite candidly, about the Illinois Craft Brewers Guild, a meeting this week with the Illinois Liquor Control Commission over a proposed rule change that would be detrimental to brewpubs in Illinois and the ABDI’s opposition to allowing bars to fill growlers.
Myers and I met for breakfast on the second-to-last day of the spring legislative session at Sunrise Cafe in Springfield.
https://instagram.com/p/olQVTwLwnU/
It’s a diner in the purest sense. The cozy (read tiny) restaurant features uneven legged wooden tables and black, weathered chairs, a cheap, no frills menu (save for the breakfast horseshoe), a seemingly unwritten pledge that your coffee mug will never get lower than half-empty and waitresses that lay plenty of sass on the locals while remaining pleasant to the visiting lobbyists and lawmakers.
Bob and I had met earlier in the session for an off the record chat; confirming suspicions and trading notes on moves among Illinois distributors. This time, however, we talked on the record and freely about some pressing issues facing Illinois brewers and distributors; namely a proposed rule change before the Illinois Liquor Control Commission that would limit the amount of beer a brewpub could send to a distributor.
The Chicago Reader was the first to report the suggested rule change, submitted by ILCC staff. It would cap the amount of beer a brewpub could send to a distributor at 50-thousand gallons. The Illinois Liquor Control Act currently states, “a brew pub licensee shall not sell for off-premises consumption more than 50,000 gallons per year.” The longstanding read on that line is that it impact to-go sales; growlers, bombers, six packs, etc. Not sales to distributors.
Guys Drinking Beer: Phil Montoro at the Chicago Reader beat me to the punch on this. I had seen those rules and I hadn’t had time to dig through them yet.
There is a set of rules submitted to JCAR [Joint Committee on Administrative Rules] now, you guys, the WSDI [Wine and Spirits Distributors of Illinois] and staff at the ILCC [Illinois Liquor Control Commission] have also submitted rules to the ILCC for approval, which is coming up next week for discussion. In reading through the one sentence regarding brewpubs, they can only send 50-thousand gallons to the distributor…
Bob Myers: Total bullshit.
If I can say that. Can I say that?
GDB: Absolutely.
So where did that come from because that seemed to come out of left field?
Myers: I have no idea. I was just as shocked. I was in my office, it was around 6:30 at night, and I pulled these off the internet. And I’m going through and I get to that sentence and I immediately fired a copy of it off to [Illinois Craft Brewers Guild Executive Director] Justin Maynard. I said, hey look, I’m going to give you a little bit of background on this. This was never the intent of the law, I don’t know where this is coming from, but it’s not coming from us. If you are interested in doing some sort of joint position – joint letter – to the Liquor Control Commission opposing this language we would be very much in support of that.
The history behind it, it was back in ’97, we were working on an Illinois wine bill and Scott Archer had come down. This was before the Guild, this was before the Dave Stricklin’s – they didn’t have a lobbyist. It was just this guy, named Scott Archer, who owned the Walter Payton Roundhouse.
He came down, he said: “I heard you guys were working on legislation for the Illinois wineries, I need to have some legislation done for brewpubs.” So, during the course of the conversation, I asked Scott: “how much beer do you sell?” “Well, we sell 50-thousand gallons.” I said, “well what are you trying to do?” He says, “I can sell it inside the place, but if somebody wants a growler” — that’s the first time I learned what a growler was, back in 1997, like”‘what the hell’s a growler?” He said, “if I want to sell a growler or I want to sell a six-pack to go, I’m prohibited. The commission is telling me I can’t do that. So all I want to do is have the ability to sell my beer to go, for carry out.” That’s when I asked him, I said, “how much beer do you manufacture?” He said “50-thousand gallons.” I said, “okay, I’ve got no problem with you selling all 50-thousand gallons out the door – whatever you want to do – sell everything you make out the door.”
So we put the 50-thousand gallons in there because that is what he manufactured. But in no time did we put any restrictions on how much they can manufacture nor did we talk about how much they can sell to a distributor – which is what this proposed rule does. I would never, never agree to that. Why would I? Why would I agree to limit the amount the amount that they can sell to my members?
GDB: That doesn’t help you guys any.
Myers: No, exactly right. And I would have never agreed to that.
Well, in the meeting there was myself, there was State Representative Kay Wojick, a Republican from the Schaumburg area, we had Bill McCartney – he represents the Illinois wineries – and then Anne Treonis. She was an attorney for the Commission. And we all agreed on that language and we all agreed to allow them to sell that 50-thousand gallons for the purpose of carry out. That was the intent behind it. So when I read this, it was like, this is not what the law states – number one – and number two we never even talked about any type of restrictions on what a brewpub could sell to distributors.
In fact, two years ago, when Josh Deth had a situation where he was starting to bump up to the 15-thousand barrels, it was my suggestion to him, why don’t you surrender you craft brewers license and become a brewpub? There’s no limit on how much you can manufacture, you can sell to distributors, you’re not self-distributing so just become a brewpub.
And that seemed like a logical solution. In fact, I think [Illinois Liquor Control Commission Legal Counsel] Rick Haymaker agreed with me.
Where this came from, I don’t know. It came out of the blue and it’s something I totally disagree with. And I think this is going to be another situation where you’re going to find ABDI siding with our craft brewers/suppliers/partners and I think you’re going to start seeing more of that come.
GDB: Maybe it’s a little too conspiracy theorist, but we haven’t heard much out of Anheuser-Busch in a while. Is there a chance that, perhaps, one of their lobbyists planted a little seed with someone in the Commission?
Myers: I can’t imagine that ever happening.
GDB: No?
Myers: No, no.
GDB: Because I’m trying to think of who could benefit from this…
Myers: I just can’t imagine that. Let’s be honest, the craft brewer is the one that’s more of a concern for an Anheuser-Busch or a Miller than a brewpub. A brewpub? How much can they manufacture from the brewpub? Maybe 5-thousand barrels, max? I can’t see them having a role in it.
I think this is something Rick [Haymaker] thought was right. He misunderstood what the 50-thousand limit was, didn’t understand the history behind it, didn’t understand the legislative intent and I think he came to that conclusion all on his own.
“I’ve talked to my executive committee and said, you know, I’d like to set up a task force to concentrate on craft brewers, brewpubs, self-distribution and try to figure out a way to allow these entities to grow without hurting the three-tier system.”
GDB: Looking at this 50-thousand gallon number; we talked to John Barley at Solemn Oath – this was last year, after the production cap was bumped up – one of the things he said was the thing that kind of hampers them is this 50-thousand gallon cap on what they can sell to go. Because that’s what a great deal of their business is. His concern is, that if they open up a second location in Chicago, they’re going to approach that cap pretty quickly.
Is there any thought of increasing that cap to allow a place Solemn Oath or DESTIHL, to give them a little more breathing room, in terms of that cap on to-go beer?
Myers: It hasn’t been looked at since 1997.
GDB: Probably reason enough to at least take a glance at it right?
Myers: We can take a look at it. I don’t have a calculator in my head to figure out how much that is in terms of cases go. Actually, I can figure it out right now.
(Pulls out cell phone)
716 cases. (Editors note: we checked the math and it is actually 22,222 cases)
We’re in the process of developing a task force – and this is something I’ve wanted to do for a long time – and when you’re not in charge it makes things a little more difficult.
(laughs)
I’ve talked to my executive committee and said, you know, I’d like to set up a task force to concentrate on craft brewers, brewpubs, self-distribution and try to figure out a way to allow these entities to grow without hurting the three-tier system.
I think we need to come up with a long-term plan because these groups, I’m sure they don’t like coming down to Springfield — coming down every six months. I know I don’t like dealing with these issues every six months.
So if we can, together, as an association come up with some parameters as far as what we’re willing to do to help these individuals grow and how we can go about it without hurting the three-tier system and offer those suggestions to my executive committee, my board and more importantly talk to the Guild about it – sit down and try to hammer out these ideas. I think that will go a long way in solving a lot of these problems.
We’ll add that to the list.
“June 3rd, I’m driving up to Chicago and meeting with the officers of the Guild and trying to figure out what their wants are and say, hey, let’s sit down, break bread and have a beer and talk about what you need to grow”
GDB: That was going to be one of my questions is if there was a long-term plan, or even a short-term plan, to kind of sit down and look at all of the issues, look at the current statutes.
Just this past year, in Michigan, they had a state commission look at the entire liquor control act there, came back with a ton of recommendations and they did a giant package of bills to address a lot of the issues facing Michigan brewers. Is that something we could see, eventually, in Illinois where you guys and the Craft Brewers Guild sit down and see what people need and what’s possible to do and move out some legislation so, like you said, they don’t have to come down every six months?
Myers: I think that’s a good idea for 2031 because I’ll be retired then.
(laughs)
That’s kind of what the Commission is doing now right now with these rules. They’re taking all these trade practice policies and they’re trying to convert them to rules. It’s a very arduous process, as you can imagine. I’m trying to do everything I can to make sure the three-tier system is protected, to make sure the integrity of the three-tier system is maintained and that the distributors will always play a role in the regulatory aspect of the product.
I get where you’re coming from and I understand and I think that’s why we want to do this type of task force.
In addition, June 3rd, I’m driving up to Chicago and meeting with the officers of the Guild and trying to figure out what their wants are and say, hey, let’s sit down, break bread and have a beer and talk about what you need to grow. And take this information back to my task force and see if we can’t come up with some kind of way to get you where you need to go, help you grow but at the same time maintain the integrity of the three-tier system.
“And I sat down with Justin and Pete and I said, rather than us being constant adversaries, let’s work as partners for the betterment of beer.”
GDB: It seems like the ABDI and the Craft Brewers Guild are in regular contact. You’ve had, from what I’ve been aware of, at least three or four meetings this legislative session. You’re going up to talk to them. It seems like there is more of an effort to work together on the things you can work together on. Is that an accurate assessment?
Myers: Yeah, I agree.
The first thing I did, Ryan, when I first started in this position was I reached out to our brewery partners. I reached out to Anheuser-Busch, I reached out to MillerCoors. As you can imagine, that relationship between us and AB was not all that great at the time, but they understand that there’s someone new there now and we’re making an effort to rebuild that effort.
At the same time I put in a call to Justin Maynard. I don’t know how long Justin’s been there, but I had never met the man. And I gotta tell ya, he’s a pretty cool dude. I get along with him very, very well. He’s got a great passion for beer. And I sat down with Justin and [Illinois Craft Brewers Guild President] Pete [Crowley] and I said, rather than us being constant adversaries, let’s work as partners for the betterment of beer. That’s what we should be focusing on.
At that time I asked them what their position was on growlers. I told them that our concern was that once growlers got into a retail establishment, like a C-store [convenience store], that perhaps the lines wouldn’t be cleaned as well and if that consumer tasted that beer and it’s tainted in any way that consumer would be highly unlikely to purchase that product off the shelf.
In our opinion, to protect the integrity of the product, we don’t necessarily like the idea of having growlers in C-stores. But, we’re willing to work with you. What is your opinion on it? And they came back and said the very same thing.
I said we’re happy to submit a joint position paper, whatever the case may be, to the Commission to let them know we’re working together on that. We never got it done but we’re on the same side for the very first time. And now we’ve got the same situation with the brewpub language that’s coming out of the Liquor Control Commission.
We’re starting to see that relationship getting better. We’re being more open. I have Justin’s cell phone number, he has my cell phone number, we’ve got each others email. We communicate constantly. He asked me, can we get together, I said I’ll drive up there so it’s less of an inconvenience for you. We’ll sit down, let’s have lunch, a couple of beers – let’s talk.
GDB: Justin’s been known to post selfies on Facebook. He doesn’t send you selfies, does he?
Myers: No.
(laughs)
GDB: You’re not at that level yet?
Myers: No we’re not at that level – no, no – but I look forward to the day we are at that level.
“They are doing a great job with their presence here in Springfield. They have great representation and they’re selling their story. And legislators pick up on that and they’re listening.”
GDB: From your vantage point how have you seen the Guild as an organization grow? Back when they were working on the self-distribution bill they didn’t seem to have a big statehouse presence.
Myers: Well, they do now.
GDB: Yeah, they’re coming down here and doing receptions at the Governor’s mansion, they’re doing receptions in Chicago. It seems like they have really stepped things up in terms of exposing craft beer to lawmakers here and the Guild to lawmakers as well.
Myers: They’ve done a fantastic job. You know, when I first started back in ’93, there were two breweries in the state of Illinois and there were 130 beer distributors. Today there are 100-plus breweries in the state of Illinois and I have about 63 members now. Times have definitely changed.
They are doing a great job with their presence here in Springfield. They have great representation and they’re selling their story. And legislators pick up on that and they’re listening.
We, as an association, we have to do a better job of partnering with them. Let’s face it, they’re growing at an exponential rate and we’ve got to recognize that. There are many things that we can agree on. There are some things we are never going to agree on. I understand that. In order for our relationship to grow we should try to work out the things we can work on together first before we get to those bigger issues.
GDB: Just out of curiosity, if you have it all put together, who is on your task force?
Myers: I don’t have it all put together yet but how I’m envisioning this, it’s gotta be a balanced task force: somebody from Anheuser-Busch, somebody from Miller somebody that deals with craft brands primarily. It makes no sense to have a member on a task force that doesn’t sell craft brands. That’s the first requirement, they have to sell craft, and then go from there.
I want to get this going this summer.
“We started talking about brand movements, in the last five years, and I think we’re at maybe 70 – 75-brands that have changed hands in a five-year period, which is just remarkable. That’s telling me that the law is working.”
GDB: Any other balls in the air? I know there was talk about amending bits and pieces of the Beer Industry Fair Dealing Act and I know you and Justin are going to reconvene on at some point.
Myers: BIFDA is one of those things that we’re going to agree to disagree. If I were to sit there and tell you, yes, we’re going to going in to BIFDA and carve out and this, that and the other thing this would be the shortest stint in ABDI history for a president of the association. I wouldn’t be around much longer.
The formula is there already. We’ve got it at 10-percent, anyone that has less than 10-percent of that distributor’s volume, they have an opportunity to get out right now. Very few states have that. In fact I think New York is maybe at 3-percent. Ours is at 10. That mechanism is there and it’s working.
We started talking about brand movements, in the last five years, and I think we’re at maybe 70 – 75-brands that have changed hands in a five-year period, which is just remarkable. That’s telling me that the law is working. When we first developed it we didn’t envision it was going to be used the way it is being used now.
“If we go into the law and say you can sell growlers as a retailer that means ALL retailers, regardless of what kind of retailer they are, would be allowed to sell growlers.”
GDB: Let’s circle back for a minute. In talking about the stance on growler fills, and you mention C-stores, do you really think it would reach a point where a convenience store would want to fill growlers?
Myers: They possibly could. In Illinois law, all retailers – doesn’t matter if you’re Chicago Cut, if you’re Walgreens, if you’re a 7-Eleven — they all get the very same license.
GDB: So everyone is under one umbrella?
Myers: Exactly. So what that means is if we go into the law and say you can sell growlers as a retailer that means ALL retailers, regardless of what kind of retailer they are, would be allowed to sell growlers. And that there lies the problem.
That’s the reason we have the laws in place right now where you’re required to clean your lines on a timely basis. And that’s one of the top ten violations a retailer will commit. If those lines aren’t clean the taste can change significantly and we’re afraid that consumer gets that growler, takes it home and says, oh my god this is terrible. The chances of them going to the grocery store and picking up that craft beer is highly unlikely.
GDB: In researching new legislation in Michigan that allowed bars to fill growlers I found Michigan has different classifications of retailers. In theory, to allow a Fountainhead or Sheffield’s to fill a growler, you’d need to go in a break it down like that.
Myers: Similar to what locals do, you have Class A, Class B — you’d have to do that.
GDB: Seems like a lot of fun.
Myers: Yeah, and then you’re bringing in groups like the Illinois Licensed Beverage Association, the convenience store association, the Illinois Retail Merchants Association – yeah – you’re bringing in a lot of players that would obviously have a right to voice their opinion on that legislation.
GDB: And as you and I have seen before, when you have that many groups coming in, it tends to slow down the process significantly.
Myers: Yeah, absolutely.
It’s clear from Myers comments that the ABDI sees a value in aligning itself with the Illinois Craft Brewers Guild, when it makes sense to do so.
This is a break from tradition.
The ABDI has long-been in lock-step with the Wine and Spirits Distributors of Illinois and the ICBG was seen more as an adversary. Now they’re becoming an ally. This change in mentality is most likely due to the change in leadership. Myers took over for Bill Olson, who retired at the end of the year.
When Olson was president I always saw Myers as the good-cop to Olson’s bad-cop. Olson was quick to say no while Myers was more likely to say he’d look into something before discounting it. Both fight tooth and nail for their members, they just approach things a bit differently.
Olson, by the way, is still working contractually for the ABDI, consulting on issues as need.