Beer battle brewing in the Bluegrass State

Beer battle brewing in the Bluegrass StateBeers in Kentucky(Photo: File photo)FRANKFORT, Ky. – A move by the world’s largest brewer to run the beer distributorship in Owensboro, Ky., — as it already does in Louisville — is causing a beer battle throughout the state that could spill into next year’s legislative session.Depending on which side is talking, the decision about whether Anheuser-Busch can have a second beer distributorship in Kentucky either will hurt craft breweries in the state and discourage larger out-of-state breweries from selling their product in Kentucky — or it will have no impact on beer drinkers whatsoever.Anheuser-Busch, the American arm of Belgium-based Anheuser-Busch InBev (ABI), is trying to buy an Owensboro distributorship in a deal it says poses no threat to consumers, citing its ownership of a Louisville regional distributorship since 1978.Typically, one sees a three-tiered system with a beer producer, a separate distributor and retailers. Budweiser products are already sold in the Owensboro area, but Anheuser-Bush wants to take over the existing distributorship.Anheuser-Busch claims in a statement that its Owensboro deal would not impact consumers because, “in fact, there have never been more choices for beer consumers – including those in Kentucky where the craft beer industry is booming.”On the other side, some out-of-state breweries, in-state craft breweries and other distributors say the move is a threat to the three-tier system in place since post-Prohibition that seeks to regulate alcohol sales to protect the public and prevent alcohol sales from being controlled by only a few.USA TODAYPro golfers crafting new beer product lineThose opponents say allowing Anheuser-Busch to operate as a producer and distributor restricts options for brewers looking to sell their product in Kentucky and, consequently, causes some out-of-state producers to avoid Kentucky.Adam Watson, managing member and brewer of Against the Grain Brewery in Louisville, says Anheuser-Busch likely would favor its brands to the point that some smaller brewers eventually “disappear,” according to his letter to state Malt Beverage Administrator Stephanie Stumbo.”If a license is granted to Anheuser-Busch, the applicant would have increased economic power that clearly poses a threat to fair competition in the Kentucky beer market,” Watson said in the letter he wrote in his capacity as president of the Kentucky Guild of Brewers. “The combined Louisville-Owensboro territory includes counties where more than 1 million Kentucky citizens reside, approximately 24 percent of the state’s population.”Opponents say a win by Anheuser-Busch will lead to a domino effect of the brewing giant trying buy distributorships across the state, reducing jobs and hurting distillers. A loss by Anheuser-Busch in Owensboro would raise the possibility that its nearly 40-year run in the Louisville area distributing its own product could come into question as well.The battle over allowing brewers to act as wholesalers has been seen recently in other states like Ohio and Illinois and is now in Kentucky with Anheuser-Busch’s request to take over the Owensboro distributorship. Anheuser-Busch maintains the legal issue in Kentucky was decided almost 40 years ago by the courts in a 1978 ruling that allowed Anheuser-Busch to be a distributor in Louisville.The battle was in Franklin Circuit Court on Thursday where Judge Phillip Shepherd heard Anheuser-Busch’s request to force the a state regulator to approve its distributors license for Owensboro, which is necessary to complete the purchase of Budweiser of Owensboro by a Dec. 31 deadline from the Tennessee-based Hand family.

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