Major Fight in IL

Distributors amend bill to allow craft brewers to self-distribute

A major fight to retain self-distribution rights for craft brewers in Illinois is facing a May 31st deadline after distributors inserted significant amendments into a bill sponsored by small brewers to keep their distribution rights intact.

Last year a judge agreed that Illinois law illegally discriminated against AB by barring it from owning a Chicago wholesaler that it wished to acquire in whole. But his decision essentially barred self-distribution by craft brewers as well. Small brewers in the state turned to the legislature for a fix and introduced bills to allow them to continue self-distribution and to allow brewpubs broader self-distribution rights.

A Senate version of the bill (Senate Bill 754) was amended by beer distributors earlier this week to put a tight cap on craft brewers, only allowing brewers producing less than 15K bbls annually to self-distribute, and they can only self-distribute a total of 7500 bbls under the amended version. By comparison, Goose Island, which was just purchased by ABI, made 130,000 barrels of beer last year, over 8 times the proposed definition of a craft brewer. The Illinois Craft Brewers Guild (ICBG) stands in opposition to the amendment.

The amended bill also strips out valuable language allowing brewpubs to self-distribute a small amount of beer (up to 50,000 gallons). The bill now requires brewpubs to open a second facility in order to self-distribute, which is not economically feasible.

The Illinois General Assembly faces a court ordered deadline of May 31st to revise the Illinois Liquor Control Act or brewers of all sizes will lose their right to self-distribute their beer. There are currently 40 small brewers in Illinois and approximately 5 new brewers opening each year.