Illinois Assembly: Should craft brewers self-distribute?

Photo by TheDigitel Beaufort

A deadline has been set and the battle lines are drawn in what is shaping up to be one of the most significant changes to Illinois liquor laws since the original bill was passed in 1934. Following a ruling by a federal judge that certain sections of Illinois state liquor laws were unconstitutional because they favored in-state distributors, the Illinois General Assembly has until May 31st to rewrite the bill.

Illinois, like many states, currently has a three-tier system with brewers, distributors and retailers. One provision of the amendment would allow some small brewers to act as their own distributors.

As with any issue where a great deal of money is involved, brewers large and small have started lobbying efforts to sway amendments their way.

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Beer-giant Anheuser-Busch, which recently purchased Chicago’s Goose Island Brewery, is using this opportunity to push the state house to allow all brewers to self-distribute. The court battle that precipitated this change was over whether Anheuser-Busch should be allowed to own a distributor in the Chicago area. Barring a wholesale change, self-distribution limits would be so small that few brewers will be able to avoid using a third-party distributor.

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The Illinois Craft Brewers Association is opposed to the bill, saying that the Senate version is imposing production caps that rule out almost all small brewers. Under the current version, brewers who brew 15,000 barrels per year can self-distribute half of their product (7,500 barrels per year). Goose Island, one of Chicago’s most well-known craft brewers produced around 130,000 barrels in 2010, according to the association. You can see their entire statement here.

The Chicago Journal has an excellent analysis of why craft brewers deserve special treatment. The costs of working with a third-party distributor – both monetary and administrative – are often prohibitive to small brewers, reporter Amysue Mertens notes.

Guys Drinking Beer, a Chicago-based blog, has taken up the cause of local craft brewers and is following the news out of Springfield daily. They’ve definitely got a point of view, but for day-to-day analysis, they can’t be beat.

The bill as of April 21, 2011 appears below. It has been referred back to committees in both the House and the Senate.

Illinois General Assembly HB 205 Amendment to Liquor Control Act

Future progress for the bills can be found here:
House Bill 205
Senate Bill 88