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Letter: O’boro deal will harm smaller distributors, craft beer brewers

To the editor,

In his op-ed that appeared recently, Jim Waters offers flawed logic in his defense of Anheuser-Busch’s acquisition of Budweiser of Owensboro. To begin and offer background, it should be noted that Anheuser-Busch’s full name is in fact Anheuser-Busch InBev (ABInBev), and today the company is headquartered in Belgium and led by a Brazilian management team.

letter-to-the-editorABInBev is a global giant that has made its desire clear—in order to maximize profits it must vertically integrate and bypass the three-tier system that has governed America’s alcohol industry. That is why the company is purchasing a distributorship in Owensboro and why it has tried to make similar moves in other states.

Waters argues that ABInBev’s purchase is a private transaction. But he leaves out that ABInBev is applying for a public state license to become a beer distributor. That application is subject to any open-records request. He also omits that ABInBev is a publicly traded corporation whose any move has significant impact on shareholders and the marketplace.

When it comes to Kentucky, the implications of ABInBev applying to be a beer distributor are very much public. In the balance are craft brewers, independent distributors, and retailers — all of whom employ thousands of Kentuckians and live and invest in our communities.

Kentucky’s beer distributors employ 1,520 people, and impact $104 million in state, local and federal taxes along with $150 million in excise taxes. These companies account for $102 million in wages earned by Kentucky workers. If we allow ABInBev to continue its path of blurring the lines of the three-tier system, jobs are at risk of moving out of Kentucky or being eliminated all together.

It’s true that in Louisville, craft brewers are experiencing phenomenal growth, but that is in spite of ABInBev’s existing distribution branch in the city. The rise of craft beer is a testament to the effectiveness of the three-tier system. Craft brands like Country Boy, Against the Grain, and Blue Stallion rely on independent distributors to make sure their great beer reaches customers all over the state. Keep in mind that in Louisville, ABInBev only distributes its own portfolio of products. Without an independent distribution system and franchise laws, brewers like ABInBev would be able to penalize independent distributors from taking on new brands.

ABInBev making inroads into Owensboro means there is one less choice for craft brewers to distribute their product statewide, along with a diminished opportunity for retailers to guarantee consumer choice on store shelves. Since 2010, seven other states (OH, IL, LA, ID, NE, WI, WY) have realized the danger of ABInBev expanding into beer distribution and have taken action to underscore the value of the three-tier system. At this critical juncture, Kentucky must do the same and protect its local jobs and businesses.

 

Kore Donnelly
Blue Stallion Brewing

Daniel Harrison
Country Boy Brewing

John King
Against the Grain Brewing

Ann Bakhaus
Kentucky Eagle, Inc.


Jim Bohannon III
JB Distributors, Inc. 

Jennifer Doering
Chas Seligman Distributing Co.

Bill Fields
Perry Distributors, Inc. 

Mark Meisenheier
Golden Eagle Distributing, Inc.

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