Beer wholesalers enlist lawmakers in fight against Monarch

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By: Kathleen McLaughlin for theIndianaLawyer.com

The Statehouse is a common battlefield for factions in Indiana’s alcoholic beverage industry, and this session, one group of beer wholesalers is firing shots in multiple directions.

Driven by the Indiana Beverage Alliance, Senate Bill 415 seeks to derail federal court cases brought by the group’s opponents–  including Indianapolis-based Monarch Beverage Co. – who claim Indiana’s Prohibition-era alcohol laws are unconstitutional.

The bill also contains a long list of rules on how beer companies can do business with wholesalers, a set of provisions meant to remedy the trade group’s ongoing quarrel with Anheuser-Busch InBev.

Indiana Beverage Alliance President Marc Carmichael called the bill “my turd in the punch bowl.”

“We’ve certainly gotten a lot of attention,” Carmichael said.

Republican Sen. Ron Alting, chairman of the Public Policy Committee, is sponsoring the bill.

Indiana’s beer wholesalers split into two camps as Monarch tried to change Indiana law so that it could distribute liquor as well as beer. Liquor wholesalers oppose that change, and so do the beer wholesalers represented by the Indiana Beverage Alliance. Both groups fear that it would help create a distribution monopoly.

Having failed to get bills passed over four sessions, Monarch turned last year to federal court with a lawsuit against the Alcohol and Tobacco Commission, saying Indiana’s law violates the equal protection clause of the 14th Amendment.

The convenience store lobby, the Indiana Petroleum Marketers and Convenience Store Association, filed a similar lawsuit in May over the fact that its members aren’t allowed to sell cold beer.

SB 415 states that if any portion of the Indiana code on alcohol is found to be invalid, the rest shall be interpreted to limit, rather than expand, commerce in that industry.

Monarch CEO Phil Terry said he’s opposing the bill, even though he agrees that Indiana’s laws are intended to be restrictive. “We don’t necessarily disagree with the policy statement they’ve got in there,” he said. “It’s just, I know why they put it in there, to affect our lawsuit.”

The Indiana Beverage Alliance supports liquor distributors who are trying to intervene in Monarch’s lawsuit, but Carmichael said SB 415 isn’t aimed at one case or trade group.

He said the goal is to prevent deep-pocketed companies from challenging state alcohol laws in court. “It’s been a phenomenon around the country over the last several years as various groups have tried to deregulate alcohol to their advantage.”

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2 COMMENTS

  1. Why Indiana (and other States) don’t allow consumers and retailers to buy products directly from the manufacturer (the brewer and the distiller) makes NO common sense. The consumer would be buying direct. NO middle-man. (Now if either wanted to use a distributor, no problem. Just no need to dictate that by law.)

    I am not advocating reducing the State and Federal taxes…JUST the middle tier which typically bumps up the price a minimum of 25% or more. ALL to the wholesaler/distributor.

    It doesn’t make any sense. American business is supposed to be founded on competition.

    This article is about all of the middle-men fighting over the pie (the middle tier) when their shouldn’t be a middle tier at ALL.

    This is a State mandated selling process that drives up the price. Nothing else.

  2. Now if CCO really, REALLY wanted to advocate market efficiencies without government interference..

    …THIS legally mandated middle-tier wholesaler system is low hanging fruit like NOTHING else in America. The buyer/consumer is needlessly paying an extra 25% or more (not in taxes or the government mind you, but revenue to to the middle-man).

    But everyone is fine and dandy ignoring this day in and day out.

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