Commission votes to discontinue
State Rule
By Heather Mangold
City
Editor
On Tuesday, the Indiana Alcohol and Tobacco Commission
voted 3-0 against the re-adoption of State Rule 28, during a public
hearing in Indianapolis.
Following the rule's expiration, beer wholesalers
in Indiana would join all other 49 states in that they would be required
to distribute their product to retailers in exclusive territories only.
State Rule 28 will expire on Dec. 31.
"It was really a dog and pony show," said David
McClatchey, general manager for Little Beverage, a beer distributor
that supplies its product to several local stores. "We knew that the
commission had made up its mind before we attended the hearing."
McClatchey represents his company in his opposition
to the retirement of State Rule 28. He said if the commission would
not re-adopt the rule, retailers would have no choice for which wholesalers
they purchased their beer from.
Within the extinction of State Rule 28, beer wholesalers
in Indiana will be designated with territories in which they can distribute
their product to retailers. McClatchey called this a "state sanctioned
monopoly."
"If you are a wholesaler with protected property
and no price restriction, it's a good situation to be in," said McClatchey.
"But if you are a retailer like us, no evidence was given as to why
it was good for retailers."
McClatchey said he saw no reason for government
involvement in a matter that has been in place for 22 years.
Chairman Clifford Ong of the Alcohol and Tobacco
Commission disagreed. Ong said it was his duty to keep the interests
of beer consuming Hoosiers in mind.
"Really what it comes down to here is a freedom
of contract," said Ong. "Wholesalers can set contracts with brewers
and brewers can set contracts with wholesalers and Rule 28 interferes
with this."
Ong said that State Rule 28 did not provide better
service or better price to beer consumers in Indiana.
"I asked myself what I'd be getting for it (the
re-adoption of the rule), on behalf of the people in Indiana," said
Ong. "I don't think anything."
McClatchey said the fight is not over.
He is concerned that the commission presented bad
public policy in that it did not give retailers a fair chance to dispute
the commission's rejection to the re-adoption of the rule.
"The main issue that we want to emphasize is that
this is not good public policy," said McClatchey. "There's just not
reason for a complete change of 22 years of Indiana public policy.
Ong said this is not the case; the commission was
not required to hold a public hearing.
Ong said the commission went above and beyond its
duties in researching the matter. Holding a public hearing was a way
to find out all the facts and information within the issue, said Ong.
"They aren't getting what they want, so they don't
like it," said Ong.
McClatchey also suggested that if the commission
did not re-adopt the rule, business at Little Beverage and other companies
could suffer.
Ong said this was a concern of his also.
"I don't take it likely that their business model
is going to be harmed," said Ong.
Little Beverage built a new facility and hired
new personnel because of the statutes of State Rule 28.
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