A state House of Representatives committee has advanced legislation that craft brewers say will help their industry grow.
Retailers, distributors and large brewers have raised concerns that the changes would create an unfair competitive advantage and undermine regulations that protect public safety.
House bills 494 and 554 would let small brewers distribute their beers directly to retailers without going through a middleman distributor and to transfer products made in one facility for sale at another. Brewers say self-distribution would help new brewers gain a foothold in the marketplace, while transfer rights make expansion easier.
“This is a good step in the right direction to update this industry,” says Cary Koch, executive director of the Louisiana Craft Brewers Guild.
He says 44 states allow transfer and 38 allow self-distribution.
“Other states have successfully accomplished this,” Koch says. “The distributors are still very much in business.”
But John Williams with the Beer Industry League of Louisiana, which represents distributors, says the legislation as currently written creates an unfair playing field. Brewers would not be required to own and maintain their own trucks driven by their own employees as distributors are, for example.
Williams says lawmakers should not upend the traditional three-tier regulation system, whereby manufacturers provide alcoholic products to wholesalers, who distribute the products to retailers, who sell to the consumers. He says the legislation would effectively deregulate the industry for one sector.
“The independent three-tier system provides a separation of power,” Williams told the House Judiciary Committee. “It’s intended to do that to create a safe marketplace.”