Craft brewers, distributors at odds over proposed contract rules

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Lawmakers on Beacon Hill weighed a bill Tuesday that supporters say would level the playing field for small beer brewers, while opponents say it would irreparably damage the craft-brewing industry that supports it. An overflow crowd gathered for the hearing, spilling into a State House hallway.

The legislation would rewrite the law on beer distribution to let some brewers end relationships with distributors. Under the current law, a beer supplier can only terminate its contract with a distributor if the state Alcoholic Beverages Control Commission determines that the distributor has violated one of five statutorily defined conditions.

Opponents say the bill (H 245) would let brewers break a contract with a distributor at any time and for any reason. Supporters say the bill would give small breweries a better chance to compete and grow by letting them move to more suitable distributors when needed.

“Under the current law, we are locked in forever. Not my life, not my children’s life, not my grandchildren’s life, under the current law we are locked in for all eternity,” said Jim Koch, founder and chairman of Boston Beer Co. “I don’t want to be forced by antiquated state regulations to work with the wrong partner.”

The Beer Distributors of Massachusetts, an industry group, and the Teamsters union told lawmakers that the bill would upend a successful and competitive marketplace for craft brewers in Massachusetts.

“Make no mistake, we are enjoying a brewing renaissance. But H 245 will throw us back into the dark ages,” Bill Kelley, president of the industry group, told the Joint Committee on Consumer Protection and Professional Licensure. “If this legislation is advanced and breweries get a new, unilateral power to fire a distributor for no reason, you will change the system in a very harmful way for all parties involved, including consumers.”

Written by Colin A. Young