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06.24.2009 9:49 am

Beer wholesalers to alcohol regulators: Regulate us!

St. Louis Post-Dispatch
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Lager Heads wouldn’t have expected the top honchos of the National Beer Wholesalers Association to be big fans of tighter regulations. But NBWA President Craig Purser are chairman Phil Terry are full of surprises.

Both men issued a challenge at the National Conference of State Liquor Administrators’ annual conference last week. Specifically, they challenged regulators to get active and aggressively regulate the alcohol industry’s middle tier. (In the U.S., according to state and federal laws, brewers sell beer to distributors - “wholesalers” - who then sell to retailers. That arrangement goes all the way back to the 1930s, when Prohibition ended.)

It’s not every day that you hear an industry invite more regulation. That has been especially true for beer distributors. According to trade publication Insights Express, it wasn’t that long ago that the beer wholesalers’ group had little or no presence at the annual meeting of state regulators. For years, “regulators listened to presentations by direct shippers and big suppliers seeking less onerous, more standardized regulation” to fit their business interests, Insights reported.

But regulators got the opposite message at the start of this year’s meeting in Nashville. For one thing, wholesalers and their pro-regulation allies apparently dominated the proceedings. For another, their enthusiastic embrace of state-based regulations broke the mold of the beer industry being focused on how states should streamline laws to accommodate the industry.

“Regulate us, make us accountable,” Terry said. He invited regulators to make distributors “more afraid of you” than suppliers or retailers to assure accountability.

The point: Distributors wanted to make the case that they - and state-based alcohol regulation - play a crucial role in providing “traceability,” accountability and transparency in the beer supply chain.

“The time-tested system of state alcohol controls that began with the 21st Amendment is an effective system that ensures alcohol, a unique product, is manufactured, distributed and sold safely and responsibly,” Purser said. “The need for state regulators to really regulate is greater now than ever before.”

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5 comments

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well played!…. if the distributors can get the state to regulate their existence as a requirement (in more places than currently exist) then InBev cannot cut the distributors out of the supply chain loop without getting new state laws and/or regulations passed. clever - will be interesting to see if it works as the distributors hope.

— Bottom Line
12:03 pm June 24th, 2009

It is clever, but it’s also desperate. It’s pretty evident they see the storm clouds on the horizon and are willing to undermine their present business interests to attempt to save their business. Bid Bad AB-I’s coming to take back that slice of the pie…

— STLM
12:07 pm June 24th, 2009

Anbody rememebr why brito wanted to buy A/B ? The great people who worked there, most who have left or been $h!t canned.Next was the three tier distrbution system and all the hard workers who sold the beers. Looks as if they will be next to feel the axe.Unreal buy an AMERICAN icon, a bussiness that was making good money and was not for sale and destroy it.I say look out Pepsi and Coke your next.I believe buffet owns a large chunk of Coke,will he sell out those workers also?

— can-man
12:24 pm June 24th, 2009

Thank you U.S. govt. for the bank Bailout without doing your homework. Thanks Bank of America and Citibank for getting the hand out almost to the billion that two weeks later was lent to Inbust to buy A-B.

One for the history books. U.S. Govt bails out u.s. banks , to lend bail out money to another countries company, To buy out U.S. Company so that U.S. citizians can lose there jobs to people from another counrty.. Gee america what a great place.

— hhmmm
6:03 pm June 24th, 2009

Certainly distributors are protecting their business, but their healthy business also benefits consumers. Other countries without the three tiered system have less beer selection than the US. Without the third tier, a major brewery(s) have an easier time squeezing out the small guys.

There’s also an economic benefit as the third tier streamlines delivery systems that would otherwise have to involve each brewery or retailer making their own deliveries. Again, more cost squeezes out the smaller independent retailers in favor of the big ones.

— Bob Mack
11:56 am June 25th, 2009