Moving Ohio’s craft beer industry out of the past
For most of us, 1974 is a lifetime ago: the world and everything in it has changed drastically. Nearly 50 years ago, Ohioans wouldn’t have thought we’d be preparing for a summer spent on a neighborhood brewery’s patio or heading to the market for a six pack of our favorite local craft beer. Times have changed, but you may be surprised to learn that certain laws surrounding the brewing industry have not.
In 1974, there were no cell phones, no internet and no craft brewers. In fact, there were just 116 breweries in the entire country, and they held unmatched power and leverage over the more than 5,000 regional beer wholesalers that distributed their beer. The Ohio Alcoholic Beverages Franchise Act of 1974 was passed to protect those small businesses from the undue influence of their massive suppliers. Franchise law made beer distribution contracts virtually unbreakable by design: if a big brewer could pull their business, the small wholesaler was out of business.
Over the past 50 years, we’ve seen the entire world change, and the beer world is no different. The power dynamics in the brewing industry have done a complete 180. We’ve gone from a hundred breweries to nearly 10,000 today, while wholesalers have consolidated through mergers and acquisitions, growing their wealth and power due to the competitive advantage they had enshrined in statute back in 1974. The franchise law meant to protect small businesses from large corporations now harms small businesses to the benefit of large corporations.
Despite this entrenched obstacle, the craft brewing industry is a modern-day success story, boosting local economies, creating jobs and fostering community. However, Ohio’s antiquated franchise law needlessly stifles their growth, blunts their impact and hampers their ability to adapt to changing market demands.
Because of this outdated law that was only meant for mega-breweries, small brewers in contracts with wholesalers have no realistic means to renegotiate or leave the partnership. Other small brewers won’t enter into a franchise agreement with a wholesaler for fear of being trapped, limiting their own growth to the home market they can serve with self-distribution. Amending franchise law would give small breweries the new ability to build sustainable partnerships with the companies they’ve entrusted to deliver their beer to market. Ultimately, this means the public will see the best of what our breweries offer, delivered by a distributor who’s motivated to help them succeed.
The craft beer revolution is driven by passionate consumers seeking unique alternatives to the status quo. The Ohio craft beer scene offers precisely that: bold flavors, local ingredients and an unwavering commitment to serving communities. However, because distributors often treat small breweries as assets to be held rather than true partners, the current franchise law can result in limited access to these products for beer enthusiasts. Distributors hold significant control over which brands reach your local grocery store, concert venue or convenience store. Right now, it’s often the distributors picking winners and losers, not consumers. Reforming franchise law would unlock a world of possibilities for Ohio consumers and return their market power back where it belongs.
Fifty years ago, the handful of large, American breweries were all churning out variations on the same beer, resistant to change, content not to rock the boat. As times changed, consumers demanded something different, something better. Craft brewers answered the call and provided an alternative, breathing fresh, new life into a stagnant industry. Despite having to play by rules that treat them the same as the multinational beer conglomerates, small craft brewers started a movement that became an industry that became a cultural mainstay.
Now Ohio’s independent brewers are working to make the industry they built sustainable by modernizing laws at the Ohio Statehouse. Recently, the Ohio Craft Brewers Association announced a new advocacy campaign called the Brewers Freedom Alliance. This campaign is focused on educating lawmakers about the craft brewing industry and advocating for public policy that will allow these businesses to thrive.
Making an overdue reform to the antiquated franchise law is priority number one. This common sense change will help local businesses, communities and economies. We’re done living in the past. It’s time we look to the future.