E-Malt.com News article: USA, KY: Lawmakers pass bill preventing brewers from distributing their beers in the state

Kentucky lawmakers passed a bill preventing brewers from distributing their own products in the state and the governor's office signals he will sign it, WCPO reported on March 4.

The bill was largely fought over a move by Anheuser-Busch to purchase another distributorship.

The bill would force Anheuser-Busch to sell its two Kentucky beer distributorships in Louisville and Owensboro. Anheuser-Busch condemns the bill as government overreach into the private market.

A clean version of the bill was passed on a 23-13 vote in the Kentucky Senate on March 4. An earlier attempted to allow Anheuser-Busch's two distributorships to be grandfathered in was removed.

The move also affects Cincinnati's Rhinegeist Brewing. The Over-the-Rhine-based brewery opened a new distributing company called Riverghost in December.

Earlier, the owners of the brewery said they'd have to shutter the facility if they can't find a buyer.

WCPO spoke with Rhinegeist co-founder and President Bob Bonder by phone after the vote.

“We’re still coming down a bit, but our general reaction is just shock. We’re shocked that they didn’t even mention us once on the floor. We spent weeks talking about our business in Frankfort. They took the weak way out. They’ve focused entirely on AB. … We’re the tricky part of this business and they did this to just make their lives easier,” Bonder said.

The Rhinegeist team was dismayed that their situation wasn’t addressed or mentioned during the Senate vote.

“It really embodies everything I hate about government. It’s a complete shame,” Bonder said.

Bonder personally emailed the senators several times and said he met with them in person but his pleas were ignored. He said it sends a bad message to prospective investors in the state.

“You say you want to encourage startup and investment -- so don’t issue licenses and then turn around and say, ‘Your business is no longer a valid investment,’” Bonder said.

The Rhinegeist team said it was their first investment in the state and they are unlikely to do business there in the future or encourage others to do so.

Bonder said the shock from the development is still setting in so they haven’t formulated an immediate plan yet. He is going to talk with his team at Riverghost and work with them to decide what to do.

Fortunately, Bonder believes the team will have team to get things settled. He said they will likely be able to operate until their license renewal in December.

“Everyone in Kentucky will still have Rhinegeist beer for the time being,” Bonder said.

The heavily lobbied bill was advanced Tuesday by the Senate Licensing, Occupations and Administrative Regulations Committee without being amended.

Gov. Steve Beshear later issued a statement on the bill saying, “I will be pleased to sign House Bill 168, which protects the integrity of the three-tier system for alcohol sales in Kentucky. This system was designed to protect consumers as well as small producers like new breweries. This aligns the rules for beer with rules for other alcoholic beverages, so everyone is on a level playing field.”

House Speaker Greg Stumbo says his bill is needed to preserve a system separating producers, distributors and retailers.

Sen. Tom Buford predicted the issue is likely to end up in court. Anheuser-Busch executive Damon Williams said afterward his company will do anything it can to protect its rights.


06 March, 2015