The bill addresses something called the Alcohol Franchise Law that has been on the books for 50 years. Senator Andrew Brenner (R-Delaware) is sponsoring the legislation and said it will help small breweries.
“This will give them some leeway to negotiate,” Brenner said.
The bill would exempt small craft breweries that make less than 250,000 barrels of beer a year, from that franchise law. The current law makes it so contracts between breweries and wholesalers are indefinite and do not give brewers an out from contracts if business models change.
Alan Szuter owns Wolf’s Ridge Brewing in Columbus, and said they are asking for a simple change.
“What we’re looking for is an exemption from that for the small breweries, that would also keep in place protections wholesalers have for the large breweries but would allow smaller breweries to put normal contracts in place that can be adhered to,” Szuter said.
Szuter said relationships with wholesalers are important to help grow brands.
“Being able to work with them is very beneficial,” Szuter said. “But there are many craft brewers that are holding back from entering into those agreements because of the nature of franchise law.”
“Right now, a craft brewer can in fact distribute it on their own, but it takes large economies of scale to do this if you’re trying to do it on a statewide basis,” Brenner said.
If fewer breweries have contracts with wholesalers, that can mean fewer options on the shelves.
“This is for the smaller craft brewers, to help small businesses grow in Ohio,” Brenner said. “But also, to help get more consumer choice out there.”
Senator Brenner said the distributors, in general, have some issues with the current version of the bill, but are not completely against it. He said revisions to it will likely come after testimony in committee this fall.