Craft Beer’s Climb: Tapping Into Profit


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As Breweries opened up to Distribution

After Prohibition ended, the US setup a unusual 3-tier system designed to maintain beer and liquor producers from interfacing straight with the general public. Beer companies need to sell their item to a distributor. The distributor sells the merchandise to a retailer then. However, some companies (notably InBev), want to circumvent that imposition by investing in a distribution company (many already own shares in the firms they use). In Illinois, this step has incited some legal complications.

Illinois allows craft beer nano and producers breweries to distribute their beer directly, without having to proceed through a distribution company. InBev wished to take advantage of this, however when denied, claimed prejudice against out of condition brewers. The problem degenerated and the legal program became involved rapidly. An Illinois judge actually agreed with the point, and offered two alternatives – either all breweries (regardless of size or location) should be allowed to sell directly to retailers, or none of them should.

Craft Beer’s Climb: Tapping Into Profit

Craft Beer’s Climb: Tapping Into Profit

Obviously, small breweries like Chicago’s Revolution Brewing, Metropolitan Brewing and Finch’s Beer Co. cannot afford to do this. It’s simply not economically feasible. The ultimate ruling came in the form of nullification – that is, all brewers have to sell to a distributor. However, the judge making the ruling actually gave the state legislature a chance to step in. Currently, there is a movement that might actually offer some benefits to beleaguered Illinois craft brewers, while keeping greedy mega-corporations at bay.

Lobbyists like Guys Drinking Beer, have drafted a proposal that allows those who produce fewer than 60,000 barrels of beer per year to distribute freely by purchasing their own distributor’s license. For those who produce more than this (and there are some Illinois craft breweries that produce more than 100,000 barrels per year), the new regulations would enforce that they have to sell to a different distributor.

This seems to offer the best solution for everyone. It provides a means for brewpubs to do something as distributors even, helping to bolster the whole craft beer industry. However, the problem is far from settled. Both homely house Expenses 205 and Senate Bill 88 remain open. Still, Illinois residents do have an opportunity to contact their legislators and urge them to vote and only these bills. The only additional choice is either nullification or open up distribution, neither which can be palatable for all parties in this quagmire particularly. Cooler heads will prevail hopefully.

Author: Poto Cervesia, Dustin Canestorp

Dustin Canestorp is the Founder and General of the Beer Army. Join the ranks of the Beer Army at Take a stand and let the world know your position. If you are going to drink, drink BEER!

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