Kentucky House Bill 168

[trueblujr2]

This is the Bill before the state that is trying to protect the interests of smaller craft brewers by basically forcing AB/Inbev to sell their distributorships in Kentucky. There are a number of ads out there for both sides of the issue. I don't pretend to quite understand the full ramifications of the bill or its details, just what I've been able to understand and gather from news sources or some reading.

Basically a lot of the smaller Craft Brewers use local distributorships around the state to get their beers out into the market. Seems like a necessity for those small craft brewers to succeed, right? Well AB/Inbev for example now has been going in and buying these distributorships then dropping all of the beers except those manufactured under the AB/Inbev umbrella. so basically dropping all of the Craft Brewers or any brand not their own. They did this with a distributorship in Owensboro just this past December.

So now the opposition to this bill (AB/Inbev primarily) is putting out some really misleading ads, referring to these small businesses, Craft and Micro Brewers as "Greedy Self-Interest Groups" Isn't that the pot calling the kettle black?, They then go on to talk about how this bill will cost people their jobs and hurt the economy. Seriously? Tell me who the "Greedy Self-Interest Group" is when you go in and take over a distributorship then push out the small competiton. Tell me how allowing a company like AB/Inbev to shut out small businesses doesn't cost people their jobs, businesses and livelihoods when you close off their avenues for reaching the public?

Any thoughts? anyone have a better understanding of the bill that I'm missing?

 

[Bill Cosby]

Why would you force Inbev to sell anything? Why not just allow small breweries to do their own distribution?

Pretty sure that's how it works in OH and why the local breweries have done such a good job getting into restaurants and bars in Cincinnati.

 

[kyhusker2]

Originally posted by Bill Cosby:

Why would you force Inbev to sell anything? Why not just allow small breweries to do their own distribution?

Pretty sure that's how it works in OH and why the local breweries have done such a good job getting into restaurants and bars in Cincinnati.

My understanding is that state law prohibits a brewer from also distributing. They have to go through a distributor.

 

[Bill Cosby]

Yes, exactly. If we're changing laws, why not change the one that prevents small breweries from distributing their own beer.

 

[Mime-Is-Money]

Originally posted by kyhusker2:

Originally posted by Bill Cosby:

Why would you force Inbev to sell anything? Why not just allow small breweries to do their own distribution?

Pretty sure that's how it works in OH and why the local breweries have done such a good job getting into restaurants and bars in Cincinnati.

My understanding is that state law prohibits a brewer from also distributing. They have to go through a distributor.

^This

And if a brewery IS allowed to distribute based on their own state regulations, they are 99 times out of 100 still completely at the mercy of the large(st) distributor in the area, mostly due to the shelf space buying power / influence over downstream retail outlets.

The alcohol distribution industry is a quasi-monopolistic mafia.



This post was edited on 2/16 1:43 PM by Mime-Is-Money

 

[80 Proof]

Originally posted by kyhusker2:

Originally posted by Bill Cosby:

Why would you force Inbev to sell anything? Why not just allow small breweries to do their own distribution?

Pretty sure that's how it works in OH and why the local breweries have done such a good job getting into restaurants and bars in Cincinnati.

My understanding is that state law prohibits a brewer from also distributing. They have to go through a distributor.

This is correct. With Inbev recently buying a couple of distributors (and dropping the competitions goods from their inventory) it's creating a market where the local guys can't compete. The commercials that state "special interests are trying to force Budweiser out" are laughable, it's not about forcing anyone out so much as having a fair playing field for everyone.

 

[Bill Cosby]

I ask again, if we're changing laws, why not just allow all breweries to distribute their own products instead of requiring a distributor?

 

[bigblueinsanity]

I see the concern, but Im not sure the legislative process if the remedy. I love craft beer, as well as the yellow fizzy stuff. Theres plenty of room for both.

1) As Bill Cosby said - Why on earth is there a law preventing someone from distributing a product they make? That makes no sense. IF theres a legislative remedy, its the removal of this piece of legislation; not creating additional legislation.

2) In the free market, one would have to believe there would be other distributors that spring up. Theres obviously a need/demand. Seems like it could be filled by an entrepreneur. Or from a few of the craft breweries coming together to create a distribution company.

I don't want to see craft breweries cut out. But it seems theres much easier solutions to the problem, rather than adding an additional piece of legislation to the already mountains of unnecessary legislation.

 

[robo222]

Originally posted by bigblueinsanity:

I see the concern, but Im not sure the legislative process if the remedy. I love craft beer, as well as the yellow fizzy stuff. Theres plenty of room for both.

1) As Bill Cosby said - Why on earth is there a law preventing someone from distributing a product they make? That makes no sense. IF theres a legislative remedy, its the removal of this piece of legislation; not creating additional legislation.

2) In the free market, one would have to believe there would be other distributors that spring up. Theres obviously a need/demand. Seems like it could be filled by an entrepreneur. Or from a few of the craft breweries coming together to create a distribution company.

I don't want to see craft breweries cut out. But it seems theres much easier solutions to the problem, rather than adding an additional piece of legislation to the already mountains of unnecessary legislation.

For sure the problem is political in its making but I have little expectation that they'll be the ones to correct it...
Excuse me if any of you are hard working folks making a dime off the taxpayer but government has lost its way in my world...
When a business makes good product that people want and can't get it to market because the deck is stacked against them... Something has gone terribly wrong.

 

[SmackDaddy38]

Watch this Documentary Beer Wars, which gives you an idea of the issues new brewers have.

Link


Some key points.

1. The beer industry is one of the largest lobbies in DC
2. No direct sales from brewer to consumer, so you have to use a distributor and a store, some states it's ABC stores
3. Large brewers will blackmail distributors and stores, if AB InBev is 50% of your business and they say they will find someone else if you don't quit distributing "XXXXXX" beer, then what do you think you're going to do, lose your business over a craft beer?

 

[CatsFanGG24]

This has been going on for years to my understanding...

Many smaller operations were trying to run AB out with BS laws (to have a KY distributorship, owner must live/reside in KY and things of that nature), AB found a way around that and now have gone on the offensive - basically a screw you for coming after them for years.

 

[John Barleycorn]

One of the biggest flaws here is that there are 3 other beer distributors in the state. 2 are craft only, the third is the MillerCoors distributor, which also has a craft portfolio.

ANYTHING that has ANY sales volume will be immediately snatched up by one of those three in today's craft centric market. Even a tiny amount of cases.

The argument that they are denied a route to market is 100% bogus.

 

[80 Proof]

Originally posted by John Barleycorn:

The argument that they are denied a route to market is 100% bogus.

So the distributors that were bought up by Inbev didn't drop the craft brewers from distribution?

 

[Beavis606]

Add another reason for us to hate the gd Busch family. Next they'll be sending that cocksucker Yadier Molina around to rough up craft brewery owners and patrons in the off season.

 

[bbonds]

Yay - 67
Nay - 31

 

[BigTyrone]

Yay!
Posted from Rivals Mobile

 

[Beavis606]

It's actually Yea

 

[Bill Cosby]

Illogical goverment policies thanks to special interest influence win again.

 

[trueblujr2]

What I want to know is how a small craft Brew Business, trying to market its product to the local consumers is a "Greedy Self-Interest Group" when compared to a corporate behemoth like AB/Inbev who would love nothing more than to see those small businesses pillaged and burned.

 

[Bill Cosby]

Anyone can be a greedy self interest group if you're trying to get public policy change for your own self profit. Doesn't matter how big or small you are.


The fact that I can't just brew my own beer and take it to restaurants and sell it is moronic. I'm not even a big fan of Rhinegeist's beer, but they got absolutely screwed in all of this. But who gives a shit, because they're operating in NKY and aren't some hilljacks with Frankfort influence.

 

[Seth C]

Craft brewers already have enough laws to fight against in this state. For example, did you know that...

1. If you want to sell outside your brewery you must find a distributor (you cannot self distribute as you can in, say, California)
2. The contract you sign with the distributor is in perpetuity (as in, permanent)
3. To get out of said contract you have to BUY your rights back from the distributor
4. The distributor decides the value of your contract, which will be an impossibly large sum (because hey, it's the value your contract is worth FOREVER)

This law really only imposes upon InBev what was ALREADY law, that a brewer can't also be a distributor.

 

[Bill Cosby]

Originally posted by Seth C:
Craft brewers already have enough laws to fight against in this state. For example, did you know that...

1. If you want to sell outside your brewery you must find a distributor (you cannot self distribute as you can in, say, California)
***
This law really only imposes upon InBev what was ALREADY law, that a brewer can't also be a distributor.

Yes, and that's a moronic law.

The fact that Rhinegeist could become successful in Cincinnati distributing their own beer to restaurants and stores, but had to establish a separate distributorship across the river so it could drive across the bridges is just flat out stupid. Then, that rug was pulled out right from under them.

So no, the solution to the problem that not allowing breweries to distribute their own beer is causing is not forcing those who were operating successfully under the existing law to sell off their assets. The solution would be to change the dumbass law preventing breweries from distributing their beer.