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Tuesday, December 9, 2014

Idaho Continues Efforts to Limit Anheuser-Busch

There's all kinds of good news in the world of craft beer. Today's Year in Beer report from the Brewers Association has all the details. The grey cloud hanging over the good news is Anheuser-Busch, which is buying up distributorships and mucking up the three-tier system wherever it can.

I've reported on the ongoing antics of AB in the past. Doing so has earned me a place on their list of undesirables. When the suits from AB and 10 Barrel were in town hoping to drum up some positive press for the acquisition, I failed to make the list of potential "friendlies."  Shucks, I suppose you can't blame them.

Forget the 10 Barrel deal for just a second. There are going to be more deals like it in coming months and years. If we truly are opening 1.5 new breweries a day in this country (that's a Brewers Association stat), there are going to be a lot of buyouts and consolidations coming down the pike. But never mind.

Last spring, I reported that Idaho was considering legislation that would block Anheuser-Busch's stated desire to acquire distributorships within the state. Such acquisitions are a clear violation of the three-tier laws that came into existence following Prohibition. Unfortunately, a lot of state laws have loopholes that have enabled AB to come in and buy distributors. Oregon, by the way, is one of those states. Idaho is one of a few states that decided to do something about it.

With the passage of House Bill 524 in late March, Idaho amended its laws to state that only brewers producing less than 30,000 barrels annually can hold a retail, wholesale (self-distribution) or brewpub license within the state. The intent of this amendment, which is slightly more detailed than this, is to prevent big beer from owning distributorships, retail outlets or pubs within the state. It effectively reinforces the three-tier system.

Now comes word that Idaho Beer and Wine Distributors are asking state courts to review the language of the law (Title 23) and verify that only brewers producing less than 30,000 barrels may enjoy the privileges as stated in the law. This comes on the heels of the 10 Barrel deal. If you aren't aware, 10 Barrel brews 40,000 barrels a year, owns a brewpub in Boise and is, of course, now fully owned by Anheuser-Busch (which produced 122 million barrels in 2013).

Some folks are wondering if the move by the Beer and Wine Distributors is directed specifically at Anheuser-Busch and 10 Barrel. Hmmm. That's a touchy question. But it's pretty obvious that the Distributors are testing the water to see if the barrel limit, signed into the state code well before the recent acquisition of 10 Barrel, will stick.

This ought to be interesting. For if the courts somehow rule that the 30,000 barrel limit is not a binding part of the law, it will mean passing laws designed to slow the encroachment of Anheuser-Busch and other big brands is an ineffective means of addressing this problem. Then what?

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