Being a small craft distributor, I am obviously going to choose the side of franchise laws because they protect me and my company from losing a brand to another distributor at the whim of a brewing company. But being a contract brewer I have to see both sides.

I have seen both sides abuse the situation. Without strong franchise laws, a brewery can simply take the brand to another distributor leaving the previous distributor with nothing for the time invested in developing the brand. On the other side with strong franchise laws, the distributor can “hold a brand captive”. And this isn’t just going on with craft….imagine what is going on with InBev brands that are now in Miller distribution cos. (*Budweiser is now the importer of InBev brands to the US).

One thing you should know about franchise laws and the brewing companies, the rights to distribute a brand(s) have value and in franchise states those rights become a commodity as a product sells. If a brewery wants out of a distribution company, they need to find a disributor willing to pay for the rights whose value is often based on sales. Less sales…brewery wants to change…value is low…price is low…find new distributor.

At the end of the day for small craft brewers, the decision to find a distributor is often one of the most important decisions they can make. Unfortunately, brewers are brewers and often don’t think like businessmen and are happy just to have someone that will sell their brands. The result can often be a disaster. This is part of what caused the shakeout in the 90′s.

Anyways…that’s my $.02 !

Cheers,

Adam