Liquor Control Commission ruling is contrary to public policy

November 14, 2012

Oct. 31, the Illinois Liquor Control Commission ruled that Anheuser-Busch InBev (ABI) could continue to hold an interest in four Illinois distributorships despite a law enacted June 1, 2011, which prohibits brewers from owning beer distributorships. This ruling is contrary to public policy established by our legislature and fully conflicts with Illinois’ three-tier regulatory distribution system.

Every state regulates alcohol by using some form of a three-tier regulatory system (manufacturer, distributor, and retailer). Distributors are intended to be an independent licensee separating a brewer from a retailer. Brewer ownership of a distributorship is vertical integration of the three-tier system, thereby destroying the purpose of the three-tier system.

There are also concerns about Illinois’ job loss. In 2008, ABI, a Belgium-based international corporation slashed costs of the combined company by $1.1 billion on the backs of American workers — they laid off approximately 1,400 people, about 6 percent of their U.S. workforce. By 2011, ABI was able to pay off a significant portion of the $54 billion it had borrowed to finance the Anheuser-Busch takover, and 40 executives split $1.3 billion in stock-option bonuses. Also interesting is that this foreign entity that reaps profits from North America has no North Ameerican on its Board of Directors. Particularly since in North America, ABI generates around 40 percent of its revenue.

The Associated Beer Distributors of Illinois, a not-for-profit business trade association, represents, maintains and improves the interests of its members who distribute beer of all brewers. Distributors are licensed by the State of Illinois to import and distribute beer to licensed retailers. ABDI members directly employ more than 3,300 people across the state. They collect and pay $63 million each year in excise taxes to the state and pay more than $280 million in direct wages and health care benefits.

William D. Olson
President
Associated Beer Distributors of Illinois
Springfield

From the Nov. 14-20, 2012, issue

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