Craft brewers argue a nearly 50-year-old Ohio law locks them into contracts with distributors and hampers their industry's growth.
The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
So why would brewers avoid working with companies better equipped to move products around the state and help their spur growth? “There were only 116 breweries in the entire country, and they held unmatched power and leverage over the more than 5,000 regional wholesalers who distributed their beer,” she said. “The franchise law was passed in 1974 to protect those small businesses from the undue influence on their massive suppliers.”
To address that, craft brewers are seeking a carve out. Any brewer producing 250,000 barrels or less would not be subject to the franchise law. “So, when the argument is, ‘I can’t leave my wholesaler,’ the question is, why? Do you have just cause?” Evans asked. John Haggerty, the co-founder of Dayton brewery Warped Wing and advocacy chair for the Craft Brewers Association, brought up agreements on returning cooperage — kegs — on a regular basis. The distributor might agree to do so in negotiations, but if they don’t hold up their end, there’s little a brewer can do.
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