Berkshire brewers weigh in on beer distribution bill
BOSTON — Backers of the beer distribution industry passed out leaflets in front of the State House on Wednesday registering their opposition to legislation that would free up brewers to change who brings their products to market.
Under a 1971 law, once a brewer has worked with a distributor for half a year that distributor gains indefinite distribution rights for that product. The law bars breweries from ending their deal with a distributor except for specific reasons.
A Rep. Alice Peisch bill (H 245) seeks to give breweries more freedom to change distributors, something the distribution industry claims will sever the partnership that successfully delivers beer to consumers.
The owners of two Berkshire breweries said they are in favor of the measure because it gives them more options to deliver their products.
"The balance of power is kind of set in the legislation right now and it's very much in favor of distributors," said Chris Post, who owns Wandering Star Brewery in Pittsfield.
"The distributors say there are protections in (the bill) for small brewers, but without the arbitration contained in this bill a distributor can sit on his hands," and suck the "lifeblood" out of the agreement, Post said.
"I don't always find myself in favor with the Mass. Brewers Guild but in this case I very much can," he said.
Bill Heaton, who owns Big Elm Brewing in Sheffield, said the roots of the current distribution system began in the aftermath of Prohibition in order to take the power away from the country's big breweries.
"What's happened along the way is that the distributors are now in a really powerful seat because they're controlling the entire market," Heaton said. "Every distributor is associated with an individual major brand.
"The other problem is in the state of Massachusetts when you sign with a distributor it's a contract for life," he said. "The only way to get out of it is to pay the distributor to buy your brand back. For a small brewery that's impossible. Once you sign on with a beer distributor you're stuck.
"It's supposed to enable us to leave our distributor if we become unhappy in our relationship just like any other business would have the legal means to do so," said Heaton, referring to the new legislation. "Especially with a small company like ours, we don't have the resources to not sell beer for three months. That would put us out of business."
The distributors disagree.
"The craft beer industry's success is the result of a partnership — the brewer who creates the unique taste, and the distributor who cultivates and markets the brand," reads the flyer handed out outside the State House. It says, "The Beer Distributor invests a tremendous amount of money, time and energy and, just like the brewery, takes a serious financial risk when building a brand of beer — but it's a partnership that works because the risk is split evenly."
On its website the Beer Distributors of Massachusetts said it expects the Senate to consider a "similar proposal" to Peisch's bill when it debates an economic development bill (S 2423) on Thursday. Amendments to the bill are due Wednesday at 2 p.m.
Supporters of the proposal say it will allow brewers to find a distributor that best meets their needs.
"Under the current law, we are locked in forever. Not my life, not my children's life, not my grandchildren's life, under the current law we are locked in for all eternity," Boston Beer Company co-founder and chairman Jim Koch said in September.
According to the beer distributors, craft breweries in Massachusetts are experiencing significant growth in sales and craft brews comprise more than 15 percent of total beer sales volume in Massachusetts, more than double the national average.
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