Craft brewers can shift distributors under new bill
Photo/Grant Welker
The Greater Good brewery in Worcester. Craft brewers would be able to change distributors more easily under a proposal in the Legislature.
Certain craft brewers would have new freedom to change how their suds are sold under a bill that moved out of a powerful House committee on the last day of formal sessions.
Under current law, brewers who go into business with a distributor to ship their kegs and cans to Massachusetts bars and package stores become bound to that distributor and cannot fire them without good cause like a failure to promote the product.
A coalition of local breweries, from small batch startups to the industry giant that makes Sam Adams, have sought more leeway for them to swap distribution companies. Distributors have lobbied against such a change, arguing it would lead to consolidation in what is now a diverse marketplace.
Distributors have countered with their own proposal that gives additional maneuvering room to a smaller set of beer-makers, but would not apply to as many breweries as the beermakers want. Under a bill filed by Rep. John Mahoney, a Worcester Democrat, that is backed by the distributors, breweries that make less than 930,000 gallons of beer annually and are owner-operated and managed by the owner would be able to pull out of distribution agreements.
The brewers have previously pointed to that bill's requirement that the owner be manager as a "poison pill," arguing practically all breweries have hired outside professional management. The 930,000-gallon limit would leave local brewers like Night Shift, Cisco and Trillium still tied to their distributors.
The bill that cleared the House Committee on Ways and Means on Tuesday morning, a redraft of Mahoney's legislation, would give extra freedom to breweries that make less than 3.1 million gallons of beer a year so long as they are "managed only by the owners of the Brewery."
Within the committee, 17 state reps voted in favor of the legislation and three reserved their rights, essentially declining to stake out a position.
Dan Cence, who lobbies for the Massachusetts Brewers Guild, said the brewers have negotiated on the issue and the organization is "encouraged by the movement" shown by the distributors but believe the bill "does not go nearly far enough."
The bill could emerge for a vote in the House on Tuesday, but the standalone bill has not surfaced in the Senate so far this session. After today, the Legislature plans to embark on informal sessions for the rest of the year, sessions where an objection from any lawmakers can stop any bill.
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