You could make the argument that Missouri’s a Big Beer state. Its Big Beer capital would be St. Louis, but even in its real capital (Jefferson City), the Missouri General Assembly has been pushing some Big Beer agendas. The controversy of late is “Beer Bill” SB 919. That bill does many things (including allowing growler sales, which is cool; read the whole thing here), but the bill also contains what craft brewers consider a dicey business move — the ability for breweries or wholesalers to lease a refrigeration unit to a convenience store.
But since the legislative calendar is up on May 13, SB 919 is not scheduled to be heard on the House floor after passing in the Senate with one vote. So, in supreme sneakiness, legislators and lovers of Anheuser-Busch put forth an amendment with the same legislation to a wine bill (SB 994), and it passed in the House last week. We came out hating on this beer cooler leasing idea back in March, but as the language passed the House last week, ready to go into the Senate, there have been some changes made. Was it enough?
A lot of craft breweries don’t think so, some reps don’t think so either. Consider this scenario: What if you could lease a refrigeration unit to a convenience store? You could put your branding all over it, and you know what, you could probably ensure you beer gets in that cooler, too. Sounds like a great idea, right? Well, only if you or your distributor has the money and influence with convenience stores (something a lot of craft brewers don’t). But do you know who does have that influence, specifically in Missouri? Beer Voltron (a.k.a. Anheuser-Busch InBev), who has been pushing and supporting the bill.
As mentioned, changes have been made. To limit the ability of large brewers to push out small brewers, that provision has now been limited to allow just one cooler per corporation, and brewers are not allowed to dictate what goes inside the coolers. So a Bud Light cooler could technically be filled with Klondike bars and Schlafly beer, but is that how it will go? The government thinks so, and readers, please quit giving these guys such a hard time already. It’s causing indigestion. We quote The Missouri Times.
“I have had a lot of heart burn with this provision,” said Rep. Jack Bondon, R-Belton, who works for his family’s liquor store business and recused himself from voting. “But all of the sides involved have come to the table. I went to the negotiating table, and we got everything we asked for.”
But not everyone feels the same — even in the government. Apparently, Missouri’s two smartest representatives are Keiths (a rad name for sure). According to the same The Missouri Times feature, Rep. Keith Frederick, R-Rolla, and Rep. Keith English, R-Florissant, expressed concern.
“It sure seems to me that if you have in-store marketing, I worry that the little guys who can’t really afford to finance all of this will not have the in-store point-of-sale marketing,” Frederick said. “I have some small craft brewers and micro-breweries in my district and the feedback that I’m getting is that this is not a level playing field.”
You go, Keiths. Of course, the bill’s proponents say the bill will allow craft brewers more access to the market via cooler space, and everyone likes cold beer, right? Keith English probably does, but he also knows bullshit when he smells it:
“The reason why they had this bill is because they [Big Beer] are losing market share and the only way they can get back in is to buy these coolers,” he said. “This is a horrible bill. It is not for any small business. … the only reason why we had this … is so that the big business here in downtown St. Louis can get a little bit more of their market share.”
Well put. Unfortunately, the amendment passed mightily — 103-38 — and along with the bill will head to the Senate. Here’s the original language from SB 919 that started the controversy (read the whole bill here if you’re a masochist):
311.198. 1. Notwithstanding any other provision of law, rule, or regulation to the contrary, a brewer may lease to the retail licensee and the retail licensee may accept portable refrigeration units at a total lease value equal to the cost of the unit to the brewer plus two percent of the total lease value as of the execution of the lease. Such portable refrigeration units shall remain the property of the brewer. The brewer may also enter into lease agreements with wholesalers, who may enter into sublease agreements with retail licensees in which the value contained in the sublease is equal to the unit cost to the brewer plus two percent of the total lease value as of the execution of the lease. If the lease agreement is with a wholesaler, the portable refrigeration units shall become the property of the wholesaler at the end of the lease period, which is to be defined between the brewer and the wholesaler.
A wholesaler shall not directly or indirectly fund the cost or maintenance of the portable refrigeration units. Brewers shall be responsible for maintaining adequate records of retailer payments to be able to verify fulfillment of lease agreements. No portable refrigeration unit may exceed forty cubic feet in storage space.
A brewer may lease, or wholesaler may sublease, not more than one portable refrigeration unit per retail location. For the purposes of this section, a brewer shall include any business whose primary activity is the brewing, manufacturing, and selling of intoxicating liquor along with such business’s wholly and partially owned subsidiaries, parent or holding companies, interest holders, or affiliates thereof. Such portable refrigeration unit may bear in a conspicuous manner substantial advertising matter about a product or products of the brewer and shall be visible to consumers inside the retail outlet.
Notwithstanding any other provision of law, rule, regulation, or lease to the contrary, the retail licensee is hereby authorized to stock, display, and sell any product in and from the portable refrigeration units. No dispensing equipment shall be attached to a leased portable refrigeration unit, and no beer, wine, or intoxicating liquor shall be dispensed directly from a leased portable refrigeration unit. Any brewer or wholesaler that provides portable refrigeration units shall within thirty days thereafter notify the division of alcohol and tobacco control on forms designated by the division of the location, lease terms, and total cubic storage space of the units. The division is hereby given authority, including rulemaking authority, to enforce this se ction and to ensure compliance by having access to and copies of lease, payment, and portable re frige ration unit records and information.
Any lease or sublease executed under this section shall not exceed five years in duration and shall not contain any provision allowing for or requiring the automatic renewal of the lease or sublease.