Tennessee’s wholesale beer distributors are pushing legislation that would ban brewing companies from buying or owning their own distributorships in the state — a move aimed at Anheuser-Busch and its multinational owner InBev.
Further from Richard Locker:
Anheuser-Busch InBev says the bill runs counter to the free-enterprise principles espoused by lawmakers. Beer wholesalers argue that it protects competition by maintaining the state’s “three-tier” legal system of financial firewalls between the manufacturing, distributing and retailing of alcoholic beverages.
The bill, sponsored by Rep. Ryan Haynes, R-Knoxville, and Sen. Ken Yager, R-Harriman, jumped its first legislative hurdle Wednesday, winning approval in the House Local Government Subcommittee.
Tennessee Malt Beverage Association President Rich Foge, who represents the state’s 20 beer wholesalers, said Wednesday that the three-tier regulatory framework was set up in most states as Prohibition ended “because one of the major contributing factors to Prohibition was that the distillers and brewers owned the whole system … including the saloons. That led to a lot of bad marketplace practices to keep people in the saloons drinking, which led to social problems.”
Tennessee’s laws regulating liquor already ban manufacturers of distilled spirits from owning liquor wholesale and retail businesses in the state. Foge said the bill would close a loophole in the system for beer, even though no beer brewer currently owns a wholesale distributorship in the state.
Similar legislative brawls have been fought in other states, including Kentucky, where Anheuser-Busch owns a Louisville beer distributorship that wholesales the company’s Budweiser beer and other brands to retailers.
…Haynes said that ownership of distributorships by big manufacturers would hurt craft brewers. “I think it’s important that we allow our craft beers to flourish, and if Anheuser-Busch is allowed to own a wholesaler, I think they would close them out of the marketplace,” the House sponsor said.
Haynes also said the brewing giant MillerCoors sent him a letter in support of this bill.
Jose Gonzalez, a regional vice president for Anheuser-Busch, said after the subcommittee action that House Bill 543 “represents an unnecessary and biased government intrusion into the free market and private sector growth … Tennessee’s craft industry is experiencing record growth, consumers have more choices than ever before and there is healthy competition in all tiers.”