COLUMBUS, Ohio — This week, Senator Andrew Brenner introduced S.B. 23, a bill to modernize the Ohio Alcoholic Beverages Franchise Act and support small businesses across the state. Enacted in 1974, Ohio’s franchise law has bestowed protected and favored status on large, powerful wholesale beer distributors in their contracts with the small and independent breweries that supply them. The Brewers Freedom Alliance urges Ohio lawmakers to support S.B. 23 to reform this antiquated law that punishes small businesses.
Under the terms of the 1974 franchise law, beer distribution contracts are effectively unbreakable, a feature that the nearly 200 small, regional distributors of the time had written to protect them from the undue influence of massive brewing companies. More than five decades of consolidation have made the few dozen remaining distributors exponentially larger and more powerful. They now abuse the 50-year-old franchise law to exert leverage over small and independent brewers — including the more than 440 doing business in Ohio — locking them into the same permanent distribution contracts they have with the industry giants.
“Since 1974, the state of Ohio has held its thumb on the scale in favor of beer distributors and to the detriment of independent breweries due to franchise law,” says Mary MacDonald, executive director of the Ohio Craft Brewers Association. “Lawmakers on both sides of the aisle recognize that franchise law is anticompetitive and actively harmful to small businesses. We appreciate Senator Brenner’s continued action on behalf of Ohio’s small and independent breweries, and we urge the General Assembly to support reasonable, common sense reform of this outdated law.”
S.B. 23 would exempt small and independent breweries from the 1974 franchise law, allowing them to more easily terminate agreements with wholesale beer and wine distributors, and enabling them to pursue new partnerships that align with their growth and distribution goals.
“This legislation is about leveling the playing field for Ohio’s small craft brewers,” said Senator Brenner. “These businesses are a vital part of our local economy, creating jobs and producing high quality products. By reducing the barriers to changing distribution contracts, we’re giving them the tools they need to grow, innovate and reach more customers across the state.”
Studies by the Buckeye Institute, the U.S. Treasury Department and the Brewers Association have all found franchise laws to be anticompetitive and harmful to the growth potential of small and independent breweries.
“This is a common sense solution that supports entrepreneurship and strengthens Ohio’s reputation as a leader in craft brewing,” added Senator Brenner. “It’s about fostering innovation and allowing our small brewers to thrive.”
Founded in 2007, the Ohio Craft Brewers Association is a nonprofit guild that exists to promote, preserve and unify Ohio’s craft brewing industry. We aspire to be recognized as the industry leader at both state and national levels for preserving the art of making high-quality, unique craft beer; to serve as the unified voice for craft brewers across the state; to advocate on behalf of the Ohio craft beer industry; to contribute to systemic, local community development by driving economic and job growth, while creating experiences that bring people together; to promote safe, responsible enjoyment of Ohio craft beer; and to serve as a beacon for local production and manufacturing through craft beer, resulting in diverse choices for consumers.
