The craft beer community is a happy, hoppy, happening business sector, one fermenting, if not exactly fomenting, a marketplace, um, bevolution.
But when it comes to distributing their many exhilarating elixirs, the craft beer-makers, like the big macro brewers, find themselves locked into antiquated arrangements. Under state liquor laws, once a brewer has signed on with a distributor for six months, he or she is basically a captive in that relationship forever. To break those bonds, brewers must prove to regulators that the distributor has violated the law, failed to “exercise best efforts” in selling their beer, bad-mouthed their brew, or unfairly preferred a competitor’s product. Doing so is a long, cumbersome process.
That statute dates from decades ago, when the production of beer was basically limited to big national or international brands, whose exit from a business relationship could send a distributor over a cliff. It is hardly the only part of the state’s liquor laws that reflects a sensibility from a different era. Equally nonsensical: the limitation on wine and beer sales in supermarket chains. Those stores are now restricted to seven that sell beer and wine, though that cap is slated to rise to nine in 2020. And add to that list the restrictive quota system under which liquor licenses are given out.
Under Treasurer Deb Goldberg, a task force has been studying the state’s liquor laws, with an eye to modernizing them. That’s unlikely to happen anytime soon, however. But changing the law that governs distribution is on the more immediate agenda, in part because legislative leaders have signaled they want the craft brewers’ concerns addressed.
Senate legislation would do away with the current hard-to-break relationship altogether with regard to beer, and let contracts define the relationship between brewers and distributors. Several other proposals are also in play. One, which the small brewers also prefer to the current situation, would create an exception to current law for any brewer whose product makes up less than 20 percent of a distributor’s business. Those small brewers could terminate the relationship with 30 days’ notice.
The distributors want a much lower limit: any brewer who produces less than 30,000 barrels, or about 413,000 cases, annually. By way of comparison, the well-known Boston Beer Company, brewer of Sam Adams, produces 3.5 million barrels of beer a year in its three breweries, one of which is in Massachusetts; Harpoon, whose principal brewery in South Boston, produces about 250,000 barrels. Ninety percent of the craft beer brewed in Massachusetts would not, ah, flow free under the distributors’ bill.
As it is currently exists, this aspect of state liquor law has become a stale, cumbersome, craft-section-stifling arrangement. If any brewer, large or small, thinks he or she can get better sales and service by signing on with someone new, they should be free to do so, at least when a contract expires. But at very least, the small brewers need relief. Granting them that freedom would boost an energetic emerging part of the state’s small-business sector.