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January 23, 2017

Beer distribution debate continues

WBJ File

Renewing what has become a frequent battle on Beacon Hill, the Beer Distributors of Massachusetts on Friday filed a bill that they say will give breweries more choice and flexibility in their partnerships with distributors.

The bill (HD 3525), filed by Worcester Rep. John Mahoney, would allow privately owned and operated breweries that brew less than about 413,000 cases of beer annually to "refuse to sell beer to any of their distributors at any time, for no reason at all," according to the Beer Distributors Inc.

"This proposal is an equitable solution for emerging breweries," William Kelley, president of the organization, said in a statement. "It provides unprecedented opportunity for smaller breweries to develop and grow their businesses, while protecting the independent local distributors and the jobs they create from the economic leverage of larger multinational corporations."

To end its sales to a distributor, a brewery would have to "reimburse the distributor for the distributor’s inventory, and the fair market value of the business being taken from the distributor," the distributors said.

Under current law, which has been in effect since 1971, once a beer supplier has worked with a particular distributor for six months, that distributor has indefinite distribution rights to the products it has already distributed. A beer supplier can only terminate its contract with a distributor if the Alcoholic Beverages Control Commission determines that the distributor has violated one of five statutorily-defined conditions.

Similar bills have been proposed in the last several sessions, including one that was the subject of a well-attended hearing last session. The bill did not advance out of the committee despite having about 85 legislative co-sponsors.

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