Beer Distributors of Mass. oppose HB 245, urge continued growth of craft beer industry

The Beer Distributors of Massachusetts urged legislators to oppose legislation drastically altering the relationships between breweries and distributors at a hearing of the state’s Joint Committee on Consumer Protection and Professional Licensure. The proposal, House Bill 245, would allow breweries to end relationships with distributors at any time, without cause, no matter what was negotiated in agreements between the two partners.

This could be a big win for the craft beer industry in the state, but in his testimony to the committee, Beer Distributors of Massachusetts President Bill Kelley says he believes this will disrupt the state’s successful and burgeoning craft beer industry, especially since the current system already allows breweries to switch distributors and hold distributors accountable for their work product.

“The craft beer industry is booming in Massachusetts,” Kelley said. “We have more variety and choice than ever, and we have a system that brings jobs and inspires innovation. There is no logical reason to pass a law that would upend a competitive marketplace that is already working so well.”

There are 61 breweries in Massachusetts, up from 45 in 2011. The state ranks 14th in the United States in barrels of craft beer produced per year, and Massachusetts was named by The Huffington Post as one of “The States with the Best Access to Great Craft Beer.”

The relationship between breweries and distributors draws on the beer-making talents of breweries and the distributors’ work developing marketing and branding for products in liquor stores and drinking establishments.

“Those supporting this proposal mischaracterize what is a strong, team-oriented partnership between breweries and their distributors as they work together toward shared goals,” said Kelley. “As in any business partnership, there are of course instances in which a brewery might feel a change is needed – those changes are able to be made with ease as the law is now.”

Between 2008 and 2013, over 70 breweries changed distributors. In the past 24 years, less than six cases have gone to the Alcoholic Beverages Control Commission as a result of disagreements, a number that the Beer Distributors of Massachusetts claim is not significant enough to pass legislation that would harm an entire industry.

“If passed, this law would take away the ladder for startup and local breweries,” said Kelley. “The proposed law cuts off a system that has allowed some of today’s most successful breweries to develop into major brands.”

Will be interesting to see how the strong opposition from the beer distributors will affect the viability of the bill going forward.