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5 Things to Know About The Craft Brewer Bill

1)  What will the bill do?

Legislation, H. 267 will allow brewers who do not represent 20 percent of their distributors’ sales to terminate their contacts whenever they please.   The bill is currently pending in the Massachusetts State House.

2)  If passed, who loses?

If passed, the legislation on Beacon Hill will hurt the small craft brewers , the distributors and the consumer.   Without the current laws, small craft brewers will  not be able to utilize the strategic marketing expertise of the distributor to get their beer on the shelf.  In addition, distributors will lose the incentive to bring on new craft brands and that will cost existing jobs. Consumers also lose because they won’t have access to small, innovative beer brands.

3)  Who wins?

Boston Beer Company and Harpoon are pushing this bill and portraying it as help to small craft brewers.  The reality is that if passed as written it would keep new competition from entering their marketplace, and give consumers fewer choices.

4)  What problems will it solve?

The bill is trying to solve a problem that doesn’t exist: craft brewers being able to get their products to consumers. Currently every craft beer brewer in the Bay State can get each type of its craft beer products into retail stores, restaurants, bars and hotels.  Additionally there is an existing law that allows every brewer to fire a distributor when the distributor is not doing the job.  When brewers are dissatisfied with service from their distributor, they are easily able to make a change to a new distributor relationship.  In fact, in a  5 year period ending in 2012, 60 brands changed to a new distributor by agreement between the brewer and the distributor.

5) What is the current relationship like between distributors and craft brewers?

Distributors and craft brewers enjoy a long history of successful partnership which has led to the explosion of the craft beer market across Massachusetts and placed Massachusetts among the leaders of this craft beer boom.   H. 267, as filed, threatens to damage that severely. Currently distributors offer craft brewers a range of services including merchandising, advertising, promotions, warehouses, equipment, trucks, a sales force, and warehouse crews to handle the business of distribution of the brewers’ products.  The current network helps craft brewers market and distribute their products to be available for consumers.  The best way to get a small craft brew to market is through a distributor.   The state’s network of beer distributors is the best tool available to craft brewers for penetrating the market and achieving and maintaining visibility on store shelves.

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Boston Ranked Among Best Beer Cities, But That Could Change

Boasting scores of breweries and hand-crafted beers, the city of Boston has long been known as one of the meccas of beer in America.

Widely renowned for its large variety of local brews, Boston was just rated the fourth best beer city it America, ranking higher than Philadelphia, Austin,TX and San Francisco, according to Boston.com. Bigger cities like New York, Chicago and even the “Brew City,” Milwaukee did not even make the list.

But if one particular law passes, the beer business could drastically change in Bean Town, ruining its rich history of brewing.

The proposed legislation – H 267 – also known as “An Act Relative to Small Brewers” – would damage long-standing business partnerships between craft brewers and distributors by making unneeded and harmful changes to the relationships that have allowed distributors to be a crucial marketing force for the craft brew industry

This legislation on Beacon Hill threatens to damage the craft beer consumer by significantly limiting new and innovative brands that are brought to store shelves.  It will allow brewers who do not represent 20 percent of their distributors’ sales to terminate their contacts whenever they please.  For many distributors, this could mean up to 40 percent of their business and in a struggling economy, many businesses will not be able to take that risk.

If passed, this legislation will deal a substantial blow to many family-owned distributors throughout the Commonwealth, and ultimately end up hurting many of the true small craft brewers relying on these partnerships.

If this legislation is passed, no one wins.  It will not only hurt the true small craft brewers who are not able to utilize the strategic marketing expertise of the distributor to get their beer on the shelf, but also the consumer who will miss out on seeing new innovative brands at their local liquor stores.

Craft Beer Business is Booming, Why Make Changes?

Business is booming for Massachusetts craft brewers under the current state laws.

Crafts brews now comprise nearly 15.5 percent of total beer sales volume in the Commonwealth, more than double the national average, according to craftbrewingbusiness.com.  Data reveals that total beer sales in Massachusetts grew by 2.2 percent, from almost 91,000 barrels in 2012, to just under 4.17-million barrels in 2013. Nearly 82 percent of the total growth was concentrated in the craft category.

The sales numbers in Massachusetts remain high across the board.  A smaller company, Cape Cod Beer reported product demand is rising, while giant billion dollar corporation, Boston Beer Company saw 2013 shipments increase 25 percent, according to Beer Business Daily.

The State of Massachusetts has some of the most successful craft brewers in the country.  Boston Beer Co. (Jamaica Plain) and Harpoon Brewery (Boston) each cracked the top 10 list of top selling craft beers in 2012and2013.

Despite their growing success, the two large brewers want to change the state’s distribution laws.

Both companies are in favor of the proposed legislation, H. 267, which aims to allow small brewers, who produce up to 6 million barrels a year, to terminate contracts with distributors without any prior notice.

If passed, this legislation would hurt small craft brewers who are not able to utilize the strategic marketing expertise of the distributor to get their beer on the shelf.  In addition, distributors will lose the incentive to bring on new craft brands and that will cost existing jobs.  As a result, consumers will have a smaller selection of innovative craft beer brands.

The only companies that win from the changes are the Boston Beer Co. and Harpoon.  The reality is that if passed as written it would keep new competition from entering their marketplace, and give consumers fewer choices.

The bill is trying to solve problems that don’t exist.  Cutting contracts with distributors would interfere with a system that has helped small crafters flourish. The distributors play a vital part in the sales and marketing process for craft brewers.  They provide the merchandising, advertising, promotions and warehouse and equipment for these companies who otherwise would not be able to manage it. They want to see small craft breweries succeed.

The current process strikes a balanced partnership between brewer and distributor that inures to their mutual success and fosters quality choices being made available to the Massachusetts consumer. We shouldn’t let unnecessary legislation prevent the craft brewery industry from thriving.

Why We Have Beer Distributors of Massachusetts

Beer Distributors of Massachusetts was created to protect the family-owned businesses in the beer distribution industry and works to promote the responsible use of the products they distribute.

Its primary mission is to advocate on behalf of member companies in the legislative, regulatory, and legal and public policy arenas.

Currently the organization stands in opposition against proposed legislation, H. 267, which aims to allow small brewers, who brew up to 6 million barrels a year, to terminate contracts with distributors without any prior notice.

This legislation on Beacon Hill threatens to damage the craft beer consumer by significantly limiting new and innovative brands that are brought to store shelves.

It will allow brewers who do not represent 20 percent of their distributors’ sales to terminate their contacts whenever they please.  For many distributors, this could mean up to 40 percent of their business and in a struggling economy, many businesses will not be able to take that risk.

If passed, this legislation will deal a substantial blow to many family-owned distributors throughout the Commonwealth, and ultimately end up hurting many of the brewers relying on these partnerships

The current network works.  It helps craft brewers market and distribute their products to be available for consumers.  The best way to get a small craft brew to market is through a distributor.   The state’s network of beer distributors is the best tool available to craft brewers for penetrating the market and achieving and maintaining visibility on store shelves.

The Beer Distributors of Massachusetts believes no one wins with this legislation.  It will not only hurt the true small craft brewers who are not able to utilize the strategic marketing expertise of the distributor to get their beer on the shelf, but also the consumer who will miss out on seeing new innovative brands at their local liquor stores.

Say No to Craft Brewer Bill

Massachusetts residents have a say in the proposed legislation, H. 267, which aims to allow small brewers to terminate contracts with distributors without any prior notice.

Say No to Craft Brewer Bill encourage residents to voice their opinion against the bill.  By doing so, residents will protect the beer market in the state.

This bill threatens to damage the craft beer consumer by significantly limiting new and innovative brands that are brought to store shelves.

This legislation would also hurt small craft brewers who are not able to utilize the strategic marketing expertise of the distributor to get their beer on the shelf.  It would also hurt distributors who will lose the incentive to bring on new craft brands and that will cost existing jobs.

To get involved, write a letter in opposition to your State Senator or House Rep.