5 Things to Know About The Craft Brewer Bill
1) What will the bill do?
Legislation, H. 267 will allow brewers who do not represent 20 percent of their distributors’ sales to terminate their contacts whenever they please. The bill is currently pending in the Massachusetts State House.
2) If passed, who loses?
If passed, the legislation on Beacon Hill will hurt the small craft brewers , the distributors and the consumer. Without the current laws, small craft brewers will not be able to utilize the strategic marketing expertise of the distributor to get their beer on the shelf. In addition, distributors will lose the incentive to bring on new craft brands and that will cost existing jobs. Consumers also lose because they won’t have access to small, innovative beer brands.
3) Who wins?
Boston Beer Company and Harpoon are pushing this bill and portraying it as help to small craft brewers. The reality is that if passed as written it would keep new competition from entering their marketplace, and give consumers fewer choices.
4) What problems will it solve?
The bill is trying to solve a problem that doesn’t exist: craft brewers being able to get their products to consumers. Currently every craft beer brewer in the Bay State can get each type of its craft beer products into retail stores, restaurants, bars and hotels. Additionally there is an existing law that allows every brewer to fire a distributor when the distributor is not doing the job. When brewers are dissatisfied with service from their distributor, they are easily able to make a change to a new distributor relationship. In fact, in a 5 year period ending in 2012, 60 brands changed to a new distributor by agreement between the brewer and the distributor.
5) What is the current relationship like between distributors and craft brewers?
Distributors and craft brewers enjoy a long history of successful partnership which has led to the explosion of the craft beer market across Massachusetts and placed Massachusetts among the leaders of this craft beer boom. H. 267, as filed, threatens to damage that severely. Currently distributors offer craft brewers a range of services including merchandising, advertising, promotions, warehouses, equipment, trucks, a sales force, and warehouse crews to handle the business of distribution of the brewers’ products. The current network helps craft brewers market and distribute their products to be available for consumers. The best way to get a small craft brew to market is through a distributor. The state’s network of beer distributors is the best tool available to craft brewers for penetrating the market and achieving and maintaining visibility on store shelves.