Are some beer distributors killing craft beer?

Brooklyn Brewery Founder Steve Hindy isn’t afraid to tell it like it is. In a recent TV interview with CNBC Hindy recounts fighting an incompetent distributor and how difficult it can be for craft brewers when franchise laws favor distributors.

The frank interview comes directly after Hindy’s Op-Ed in the NY Times. In his opinion piece Mr. Hindy warns of the dangers of letting outdated laws dictate the success or failure of a craft beer brand of rather than consumer appeal. Hindy essentially warns us that if some of the franchise laws aren’t addressed some beer distributors could be killing craft beer at their whim. Most of the current laws were written at a time when large macro brewers would pit distributors against each other. The franchise statutes make it nearly impossible for a brewer to switch distributors without facing severe financial hardship. The risk of this hardship is very real and remains today.

So where does craft beer figure in to the conversation? The stakes are far higher for small craft brewers than for the large international brewers the laws  were originally written around. The results can be devastating when distributor chooses to focus on the “bread and butter” of their portfolio (yellow fizzy brew), or the next hot craft beer as is often the case. Small local craft brewers are left locked into distribution agreements with virtually no recourse. Craft beer brands suffer and languish while the distributors have virtually no motivation to change anything.

Steve Hindy is a craft beer legend and an industry leader, when he speaks beer lovers across the country should listen. I sincerely hope craft beer fans are paying attention to what he is saying. Minnesota beer lovers have seen what first hand what can happen when there are rocky relationships between distributors and brewers. Have you tried to buy a beer from Jolly Pumpkin or Avery lately?

… in Washington State, small brewers are excluded from the state’s franchise laws completely.

As with most liquor laws, while the rest of the nation is looking forward, it seems Minnesota is moving backward. It was just last year when small Minnesota brewers were forced to give up 5,000 bbls of self distribution to “save the growler.” And let’s not forget that Minnesota Beer Wholesalers have consistently fought against Sunday liquor sales in Minnesota.

Let’s ask Minnesota legislators to listen to Steve Hindy. Our beer distribution franchise laws could use some updating along the rest of the Minnesota liquor code.



About the author

Andrew is just a guy that likes beer. You can usually find him on the twitters or spending time with his family.