Kentucky bill pits micro breweries against big beer maker
LOUISVILLE, Ky. (WDRB) -- House Bill 168 is pitting micro breweries against big beer makers in a fight over distribution rights.
Kentucky micro breweries say the state's distribution system isn't fair and they want to close loop holes in the existing law. The bill would require all beer makers to use independent distributors.
Due to Kentucky's three-tier system, Kentucky beer makers must go through a distributor when selling their beer to retailers. Meanwhile, companies that make their beer outside the state can open their own distribution centers in Kentucky and cut out the middle man.
The Kentucky Guild of Brewers supports HB 168. The organization says that Anheuser-Busch is getting around this rule with their Louisville and Owensboro distribution centers.
"They can circumvent that three tier system, own that middle man, sell their own beer and under-cut all our prices and hedge us out of small markets," said Adam Watson, President of the Kentucky Guild of Brewers and partner in Against the Grain Brewery.
Watson says the fight isn't personal and his brewery doesn't want to self-distribute, he just wants the system to be fair.
"We're willing to continue going through a distributor as long as everyone else does as well," he said.
If HB 168 passed, Anheuser Busch says it would have to sell its two Kentucky distribution centers.
Anheuser-Busch Louisville calls the bill an "attack on a responsible corporate citizen."
In a statement, Director of Sales and Marketing for the Louisville distribution center, Damon Williams said, "This legislation has nothing to do with craft beers and everything to do with greedy special interests who are asking the government to change longstanding Kentucky law for their own benefit."
Anheuser-Busch bought the Louisville distribution center on Produce Lane in 1978. Since then, the number of employees has grown from around 30 to 175.
Teamsters Local 783 president John Stovall believes all those jobs will be lost if the bill becomes law.
"If they didn't lose their jobs, I truly believe their pay will be cut and they'll lose their union contract," he said.
Stovall said he believes the bill isn't really about distribution rights, but hedging out a competitor.
"[craft brewers] don't have a problem getting their beer out," he said. "What they want to do is eliminate Budweiser because Budweiser is the king of beer."
But Watson said this isn't about Anheuser-Busch or any of the other beer makers the bill effects.
"This is not about them, this is not about any particular brewery or distributor," he said. "This is about making sure the system is fair for everyone."
The bill is currently awaiting a hearing in the House Economic Development Committee.
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