Give craft brewers distribution flexibility
John J. Mahoney
With more than 110 craft breweries in Massachusetts providing nearly 3,400 jobs between brewing and distributing, the industry in our state is burgeoning.
This economic engine continues to drive our local economy with hundreds of jobs in Worcester County between locally owned and operated breweries and family-owned distributors. This results in millions of dollars in wages and economic activity that contribute to our city's education, infrastructure and livelihood.
We are in the midst of a golden age for beer, and it is imperative that we don't take our foot off the gas. This is why I proudly filed “An Act to Promote Economic Development and Market Access for Emerging Businesses,” to continue the great success of our brewing industry, by making it easier to switch distributors.
This bill will provide flexibility for breweries and minimize any disruption to the mature beer distribution industry. It will allow emerging breweries (privately owned and operated breweries that manufacture less than 30,000 barrels – about 413,000 cases – of beer per year) to refuse to sell beer to any of their distributors. Other bills have attempted to do this by easing the 46-year-old laws requiring brewers work with one distributor, but they would destroy and significantly damage our small business distributors by taking 20 percent of a distributor's annual sales away, devastating these businesses. We cannot afford to lose well-paid, full-time jobs.
Under the bill, an emerging brewer can end its sales to a distributor by: 1) Notifying the distributor of the date sales would cease, then 2) reimburse the distributor for the inventory, related sales and marketing materials, and the fair market value of the business being taken from the distributor.
This will allow 96 percent of U.S. breweries to have the choice of their distributor, including emerging breweries. It gives new choices to breweries while not endangering the many high quality, family-sustaining jobs delivered by beer distributors. It will also promote opportunities for emerging breweries in Worcester and Massachusetts to propel into the next stage of development and market expansion. On top of it all, emerging breweries can continue to have the options to distribute their beer themselves, add second, third or even more distributors, or choose to sell their IPA to one distributor and their pilsner to a different distributor.
Emerging breweries and distributors will be able to continue their mutually beneficial relationship. The bill is built on transparency, trust and fairness. I look forward to working with my colleagues in the legislature for the passage of this bill, and to ensure the brewing industry flourishes for working families and businesses alike.
John J. Mahoney is a Democratic state representative serving Worcester.
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