Ohio lawmakers propose giving more freedom to craft brewers

COLUMBUS, Ohio — A new bill in the Ohio Senate would give craft brewers more freedom — and more options — to get their beers on shelves.

When you crack open a cold one on a Friday night, know that brewers like Richard Skains make that happen.

“It’s my blood, sweat and tears that I want to see succeed,” Skains, the owner of Working Class Brewery, said.

But he can’t.

“I feel trapped,” he said.

Ohio’s alcohol franchise law inhibits his ability to get fair contracts to get his beer to the consumer, he said.

If a brewer wants to work with a distributor, the Ohio Alcoholic Beverages Franchise Act requires a written contract — one that you can only leave with “just cause.” This makes the contracts virtually unbreakable, Skains said.

“[The distributors] are not going to negotiate with me if there’s an issue,” he said. “They’re not going to help rectify it for me as a business person.”

A new bill would change that. Senate Bill 138 would exempt craft brewers from the 1974 law, allowing them to leave the contract.

“This bill is about small business owners having the freedom and flexibility to make the best decisions for their employees, brewery and customers,” said bill sponsor Sen. Andrew Brenner (R-Delaware). “I’m proud to carry this legislation that I know will make Ohio an even better place to live and do business.”

This bill was introduced following lively discussions during budget committee hearings. The bill’s language was not included in the final budget.

Jacob Evans represents the Wholesale Beer and Wine Association, and he said this could put wholesalers’ jobs in jeopardy.

“A significant portion of their business… wrapped up with one or two of these craft brewers that could just simply walk away if they wanted to,” Evans said while giving testimony at the Statehouse in May. “And that’s after the wholesaler has put in an investment that they agreed to on the front end.”

Distributors would lose money, but he also argued that a contract is a signed legal document and there are already remedies if someone wants out.

“The way it may go is that you have to go to court,” he said. “However, if you have an issue, you can talk to your wholesaler and oftentimes get out of it.”

Skains understands that distributors can work hard, the brewer said, but there should be a way to make negotiations more fair.

“If I’m able to renegotiate that contract, have a seat at the table and not be locked into a lifetime contract — one that really doesn’t work for us at this level — that means everything because now those handcuffs can come off,” Skains added.

The bill will likely be heard in the fall.

Ohio craft brewers want carve out from 50 year old law locking them into distribution agreements

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