What Does HB 168 Mean for Brewing?

With our home base in Louisville, Kentucky, a major discussing lately has been centered around HB 168, an amendment to KRS 243.110. The bill would allow breweries in Kentucky to self distribute. On the otherside, distributors are contending that it will cause a loss of jobs in Kentucky.

In preparation for our Spring issue, I was writing our cover featuring a well known Colorado brewery (you’ll have to read the issue to find out). In the interview there is talk of the early days of securing distribution.

As a small brewery it had to hustle to get beer moved into retailers. There was a lot of driving in station wagons and minivans to get beer from the brewery to other cities throughout Colorado. On a small scale this was definitely acceptable. However, as the brewery grew it outgrew the ability to self distribute entirely, and thus reached out to a distributor.

When listening back to the interview I thought about HB 168. How is it possible that one state can see a working relationship and success between breweries and distributors in another state, but still disregard the option for its own state?

Certainly the bill would level the playing field. It would allow breweries of all sizes to try and get beer sold in retail shops and restaurants. However, how much manpower does one brewery truly have that would allow it to get into all possible locations statewide? In my opinion the distributorship would maintain the largest accounts, and still have to work with a lot of craft breweries for larger distributorship.

In reality the vast majority of brewers don’t get into brewing so they can worry about distribution. It sort of comes to a lot of breweries simply as a means to gain exposure without having to spend a lot of energy and revenue worry about both sides.

It would also be good for distributorship to have breweries able to wholesale on their own. From a business perspective, it’s good to be able to see the water has been tested before diving in. If a Kentucky brewery opens, has good sales at its own tap room and is able to secure other relationships locally, and is successful, this opens the door for distributors to see there might be an opportunity for greater production and distribution.

In Kentucky there has been a long standing argument that one side can’t be good for the other. The closed-minded relationship from both sides isn’t good for the industry as a whole. Also, in Kentucky, with breweries slated to open in droves, it could be bad if they can’t establish a good business practice of selling beer. Not only could it be bad for breweries, but it could be bad for industry in Kentucky as a whole — it could lose competitive advantages with surrounding states looking to attract more breweries.

Leveling the playing field isn’t just good for one side, but is actually good for all sides. It’s time that all states take notice of the success of other states and open distribution and beer sales to the taste of the consumer, not outside restraints.