Changes in Distribution Law Sought by Small Massachusetts Breweries

Changes in Distribution Law Sought by Small Massachusetts Breweries

03/6/2011

Another battle looms between breweries and wholesalers of beer, wine and alcohol in Massachusetts this legislative session. A recent bill, filed by Rep. Alice Peisch, a Democrat from Wellesley, seeks to exempt small brewers from laws that have been protecting wholesalers since 1971.

Robert Martin, the founder of Ipswich Ale Brewery, said, “The law is written right now in a way that protects wholesalers whether he’s doing a good job or not.”

When these laws were enacted, there were only about 100 domestic brewers including one in Massachusetts. During that time, an unhappy and dissatisfied brewer could potentially put a family wholesale operation out of business.

Currently there are more than 1,400 small breweries in America, including around 40 in the state of Massachusetts. These breweries continuously rely on a dwindling number of local wholesalers to market and sell their products to retailers.

Under the present laws, in order to switch to another wholesale distributor, the breweries must show “good cause” for doing so. This includes showing proof that the distributor was not able to exert enough efforts to promote a particular brand.

In case a wholesaler will challenge the request of the brewer to take their product to a competitor, a costly legal battle can make it hard for craft brewers to prevail.

According to Martin, who is also the president of the Massachusetts Brewers Guild, “It’s a small company. I cannot afford to fight that battle.”

Peisch’s bill would allow small brewers to switch to another wholesaler without showing cause, as long as the wholesaler will be fairly compensated for the loss of business.

For his part, John Stasiowski, the president of the Beer Distributors of Massachusetts, said, “I’m sorry, but they have protections right now. They have the capability to move it right away if they have an issue with the distributor

WRITTEN BY:

blakeh@wellsdrew.com