The distributor told them their beer represented less than 1 percent of the wholesaler’s businesses, “and that is how much sales attention we would get,” Bates said.
“We had realized our biggest competitor had become our own distributor,” he said.
The company appealed to the state Alcoholic Beverages Control Commission, where disputes between distributors and wholesalers are handled. The ABCC stated the brewer must continue to do business with the distributor, Bates said. The brewery’s sales slipped, and the company is racking up legal fees without a resolution, he said.
Distributors argued that the law does not need to be changed, and there are plenty of examples where brewers are able to break ties with wholesalers by going before the ABCC.
Bill Kelly, president of the Beer Distributors of Massachusetts, said wholesalers would be open to termination “for no reason at all.” Under current law, beer makers can choose which distributor they want to sign on with, and can work with them for six months before they have any responsibility to the distributor, Kelly said.
Distributors need the protections, Kelly argued, because they spend money on marketing and sales for the beers, and make long-term investments in warehouses and employees to deliver on commitments to brewers.
As an example, Kelly pointed to a wholesaler in Everett who invested millions of dollars in a new 100,000 square foot warehouse that caters to small craft brewers. If the proposed changes moved forward, it would jeopardize those jobs, he said.
Chris Tkach, founder of Idle Hands Craft Ales, a small growing brewery in Everett, said he currently distributes his beer locally but hesitates to sign on with a distributor to get sales further afield.
“This marriage for life with our distributor is a huge risk that gives me great pause on whether I want to move forward,” Tkach said.