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Anheuser-Busch OK to distribute beer in Chicago area, state board rules

Updated: December 2, 2012 2:11PM

State liquor regulators sided with Anheuser-Busch Inbev on Wednesday in a dispute over whether the brewery giant should be allowed to distribute its products.

By a 4-2 vote, the Illinois Liquor Control Commission voted to allow Anheuser-Busch Inbev to continue holding a 30 percent stake in WEDCO, an Anheuser-Busch Inbev affiliate that distributes the company’s products in the Chicago area.

Opponents had maintained that a 2011 state law barred brewers from owning beer distributorships under the state’s long-standing, three-tier system of separating beer, wine and spirits manufacturers, distributors and retailers.

But the panel explained Wednesday that the recent state law lacked clarity on cross-tier ownership restrictions and wasn’t sufficient to block Anheuser-Busch Inbev from holding an ownership stake in WEDCO.

“I have no illusions that today’s ruling will permanently end this disagreement among various members of the Illinois liquor industry,” said Steve Schnorf, acting Liquor Control Commission chairman. “However, the commission is very comfortable that it has correctly applied the law as it currently stands to this matter.”

Anheuser-Busch Inbev praised the state panel for a decision it said will enable the company to continue being a “welcome neighbor” and reliable employer.

“We are pleased the [Illinois Liquor Control Commission] has upheld the law and its longstanding practice of allowing Anheuser-Busch to own an interest in a licensed distributor. [Anheuser-Busch] has made significant long-term business investments in Illinois based on the law, which is reflected in today’s decision,” said Gary Rutledge, the company’s North American vice president and general counsel.

“[Anheuser-Busch] is a welcome neighbor who invests in communities in which we do business through our involvement in local organizations and charities and our efforts to promote alcohol responsibility, while providing good-paying jobs,” Rutledge said.

An opponent of Anheuser-Busch Inbev’s involvement in distributing its products — the Associated Beer Distributors of Illinois — discredited Wednesday’s ruling as the “regulatory process run amok” and predicted it would keep smaller craft brewers from getting their products to market.

“Now that ABI is allowed to own distributorships, craft brewers, new imported brands and new domestic brands will have reduced access to market. Independent distributors provide an avenue for those products to reach consumers that brewery-owned distributors won’t provide,” said Bill Olson, president of the Associated Beer Distributors of Illinois.

“This ruling impairs Illinois’ authority to regulate alcohol beverages. Without independent distributors in the state’s three-tier regulatory system, a brewer could influence every aspect of the sale of beer in the state,” he said.

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