On Monday, the Brewers Association (BA) submitted comments to the Department of Justice (DOJ) on state laws that have significant adverse effects on the national economy and on interstate commerce, highlighting how outdated state alcohol laws stifle competition, raise costs, and harm consumers.
Many state regulations that were originally designed to prevent alcohol abuse now serve to protect wholesalers at the expense of small breweries. These laws limit consumer choice, restrict market access, and make it nearly impossible for small brewers to compete fairly.
Key Issues
- Franchise Laws: Once intended to protect small wholesalers, these laws now lock small breweries into long-term, one-sided relationships with wholesalers. Small brewers often cannot change wholesalers, even if the wholesaler neglects their brand.
- Three-Tier Mandates for Small Brands: In many states, even small brands of beer must pass through a wholesaler before reaching retailers. This restricts direct-to-consumer sales, limits consumer access, and reduces opportunities for innovation and growth.
- Mandated Exclusivity: Many states force breweries to give wholesalers exclusive rights in specific territories, preventing competition and leaving retailers with no choice of supplier.
Call for Federal Action
Federal law, including antitrust statutes, can override state alcohol laws that harm competition. The BA urges the DOJ to use its authority to restore balance and fairness to the beer market through closer scrutiny of mergers and effectively addressing harmful state laws.
The BA is committed to ongoing work with federal regulators to modernize alcohol policy and ensure a competitive marketplace for America’s small and independent craft breweries.
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