Craft brewers in Massachusetts can pour a cold one now and celebrate the last-minute approval of compromise legislation on Beacon Hill to help them break free of relationships with their distributors that may be hindering their growth.
The measure, enacted in the early morning hours on Wednesday, solidifies a deal struck between the Massachusetts Brewers Guild and the Beer Distributors of Massachusetts in July. The two sides reached a truce after a decade or so of warring over legal changes that would make it easier for brewers to walk away from their distributors.
It was a truce that almost didn’t make it into state law. The Senate approved the compromise in the summer, under the direction of Senate President Karen Spilka, but the House waited until the final moments of the two-year session to approve it. Over the course of the fall, as the brewers waited and wondered, there was speculation that House leaders could be holding up the bill as a bargaining chip in broader negotiations with the Senate. In the end, the House made only two minor tweaks, neither of which changed the substance of the bill. The bill will take effect as soon as Governor Charlie Baker signs it.
“We really didn’t get a solid word that it was happening until after midnight,” Massachusetts Brewers Guild president Sam Hendler said on Wednesday. “There were points [on Tuesday] where if you had asked me, I was 100 percent sure it was never going to happen.”
The bill addresses an issue that brewers claim is stifling their ability to grow: Under current state law, if they have a disagreement with a distributor, it is almost impossible for them to break up with their wholesaler after their first six months together. This has given wholesalers tremendous clout, often leaving brewers stuck, even if the distributors choose to no longer properly promote the beer they make, or opt to box the brewers out of a certain market where they would like to expand.
The new compromise changes this dynamic. It allows brewers that produce fewer than 250,000 barrels a year (the equivalent of about 3.5 million cases) to leave their distributor, without proving cause, and with just 30 days notice. The distributor would need to be compensated for marketing materials and distribution rights — by the brewer or the brewer’s future distribution partner, or both.
“More than anything else, this will level the playing field,” said Hendler, co-owner of Jack’s Abby brewery in Framingham. “This is a huge moment for the industry, 10-plus years in the making.”
Boston Beer Co., the maker of Samuel Adams beers, is the sole brewer in Massachusetts, out of more than 200, that is above the 250,000-barrels-per-year threshold. Boston Beer had helped pay for the brewers’ efforts to lobby for this change over the years. But in the end, Boston Beer founder Jim Koch decided he didn’t want to wait any longer for reform to take place and said he agreed for his company to be “carved out” of the bill as a concession to the wholesalers.
Joe Salois, president of Atlas Distributing, said the beer wholesalers are thrilled with the outcome, now that the saga has ended and they’ve been able to consummate a truce with an important business partner. “For the beer distributors and the craft brewers, this is certainly a great day,” Salois said.
Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.
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Craft breweries score a long-awaited victory at the State House - BetaBoston
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