Commission to discuss beer
sales
By Heather Mangold
City
Editor
If a state rule is not re-adopted by the Indiana
Alcohol and Tobacco Commission, students may have to purchase their
favorite brands of beer from designated stores only, rather than from
the one just around the corner.
The Indiana Alcohol and Tobacco Commission meets
today with concerned Indiana beer distributors and retailers to hear
their worries about the possibility that State Rule 28 would not be
re-adopted. If the commission rejects the re-adoption of the rule, beer
wholesalers would be required to distribute their product to retailers
in exclusive territories only.
"This guarantees that service will go down and
prices will go up," said Dave McClatchey, general manager of Little
Beverage, a beer distributor that supplies beer to several local liquor
stores.
McClatchey used the example that currently any
number of Anheuser-Busch wholesalers can sell to retailers in the area
if those retailers ask for service. If State Rule 28 is not re-adopted,
however, only one Anheuser-Busch wholesaler could do so.
"Retailers no longer would have a choice who they
buy from," said McClatchey. "I think if you took the average college
student who is old enough to drink beer, and ask if they think buying
from one place is a better idea than buying from several sources —
I think most would say they should be able to buy from whoever they
want."
For McClatchey, State Rule 28 has been a matter
of practice for some time.
The rule has been in place for 22 years and is
set to expire at the end of this year.
Little Beverage has built a new facility and hired
new employees because State Rule 28 has been in place for so many years,
said McClatchey. Now, the commission has an opening to reject the re-adoption
of the rule without an appealing process, he said.
"That's bad public policy," he said. "It's unfair
because they didn't go through any type of process that's required.
It eliminates competition."
Stephen Diamond of the Indiana Alcohol and Tobacco
commission said there are several reasons why State Rule 28 seems to
lack enough reasons to be re-adopted.
Diamond said in a news release that the rule is
a "flat ban on exclusive territory challenges the position reached two
years earlier by the U.S. Supreme Court."
He added that Indiana is the only state that currently
does not allow beer wholesalers to conduct business in exclusive territories
either through contract or grants.
"They (other states) presumably all reached the
conclusion that the inter-brand pro-competitive effects are more significant
than possible anti-competitive intra-brand effects," said Diamond in
the release.
Greg Emig, owner of the Lafayette Brewing Co.,
said that large breweries may agree with Diamond.
"I think that what you're going to find is the
bigger breweries are probably going to be in favor of letting the rule
expire," said Emig. "Then they can establish protected territories for
wholesales."
While McClatchey said he is concerned about the
possible elimination of competition, Diamond is not worried.
Diamond said in a news release that states that
have adopted the exclusive territory policy have decided that such a
system allows competition without permitting it excessively, in which
case, can lead to disorderly markets.
McClatchey is hoping that today's public hearing
will change the minds of commissioners who feel that the rule has worn
out its welcome.
"We don’t want to see a loss of property and
a loss of jobs," said McClatchey.
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