Beer Wars
The future of the state’s beer market potentially is about to change, and not for the better. That is, if some legislators in Jefferson City get their way. The Missouri Senate is considering Senate Bill 876, in which the main provision states that no brewer, brewer employee, nor brewer affiliates “may have any financial interest in a beer wholesaler, or serve as a director, manager, employee, or agent of a beer wholesaler.”
There is an exception for small breweries (those that produce less than 10,000 barrels a year) owning wholesalers that sell only those breweries’ beers. My question is, why is the state interfering in beer distribution in the first place? Is there a great harm that the state needs to address? Is there anti-competitive behavior occurring? I have not seen an argument being made for this bill on its merits. However, I can see a potential negative. Middlemen, such as beer distributors, succeed when they add value to the process. Such middlemen can be important components of economic organization, but that is only if they add value to the process; state officials should not mandate them into existence.
While there are some legitimate roles for the government in regulating alcohol sales (i.e., age restrictions), the provision that would be created in this proposal is not one of them. If brewery officials do not think it is to their benefit to own or have a financial interest in wholesalers, they will make that decision. However, I do not see why the state should involve itself even more in the market with a mandate for the distribution system of a certain product. SB 876 is another example of the state meddling in areas that are best left to the market.
Fascinating. Can’t wait to hear more from you on this. Please keep everyone posted on developments.
Comment by Phil Eckelkamp — April 11, 2012 @ 11:02 a.m.
My guess is that the state is moving to protect existing independent distributors from direct competition by manufacturers. Much like Ford and GM are restricted from directly retailing automobiles by state franchise laws, it does make sense from that perspective. I would certainly want to see evidence that this is why the law is being proposed. If so, surely there is already some legislation on the books that applies. Maybe it is being re-visited to give the small independent brewers that have emerged in recent years some means of being more competitive at lower volumes by skipping the middle-man of the distributor.
As president of the Missouri PowerSports Dealers Association (MPSDA), I see the parallels to franchise laws, but certainly would like to have more information.
Comment by Tim Surdyke — April 11, 2012 @ 5:55 p.m.
Boy.
We had´so much work to do!
Thank you for proving this once again.
How important it is for us to continue to do so from here forward, never again going to sleep.
Whatva bunch of power-hungry *#$@^’s we have in government (products of our education system, I might add)!
It’s never too late for discipline!
Comment by HC — April 12, 2012 @ 6:20 a.m.
What is going on here? The idiots in Jeff City don’t have enough to do these days? Looking for more enterprises to control? I question the need to have the morons in Jeff City meddling in anything business related. Once they are elected into office they seem to lose all perspective on what is good for the state and its citizens.
My second question is who is pushing this crap? There has got to be someone who thinks it will give them an advantage of some sort. A special interest in the beer market no doubt. Find out who proposed this piece of crap (follow the money) and you have an answer as to who benefits from its implementation.
Hey, idiots, stay out of the marketplace and let it operate as it will if left alone.
Comment by J.Guidry — April 12, 2012 @ 10:48 a.m.
Direct distribution (from brewer to retailer) might lower prices for the consumer. There is a great deal of costs that are incurred in product distribution when those products go through a middleman (such as a wholesaler or distributor). Do those wholesalers/distributors provide value? In some cases, yes. But, large retailers, like Costco, Walmart/Sam’s, Schnucks, Dierberg’s already operate distribution centers that provide products to their stores. Beer could easily be shipped directly to those distribution centers and then be positioned into the retail outlets.
Beer wholesalers are the folks behind this type of legislation. They are trying to ensure their future. Legislators are lobbied by these wholesalers. Who is lobbying for the consumers?
Comment by Mark A. Harris — April 19, 2012 @ 8:07 a.m.