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Budweiser battle with state officials could come to a head

Cases Budweiser products are stacked shelf Binny's Beverage Depot 213 W. GrMonday June 18 2012 Chicago. | John J. Kim~Sun-Times

Cases of Budweiser products are stacked on a shelf at Binny's Beverage Depot, 213 W. Grand, Monday, June 18, 2012, in Chicago. | John J. Kim~Sun-Times

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Updated: July 21, 2012 6:05AM

There’s a brouhaha brewing over how Budweiser gets doled out to Chicago bars and liquor stores that could — if Anheuser Busch gets its way — affect the beer selection at your local watering hole.

Here’s the issue: Budweiser’s parent company wants to retain its 30-percent ownership stake in a mega-beer distributor, City Beverage. But attorneys for the Illinois Liquor Control Commission say that’s illegal under the state’s new “craft beer law.” And they have recommended revoking the wholesaler license of City Beverage — which distributes beer in Chicago, Peoria and other parts of the state — until the brewer divests its ownership interest.

The final decision rests with the seven-member liquor commission, which is set to take up the matter at a Wednesday hearing.

For Anheuser Busch, which is owned by Belgium-based InBev, this is the latest standoff with the liquor commission in a years-long push by Anheuser Busch to increase its market share in the Chicago area — currently dominated by Chicago-based Miller/Coors — and gain more control over beer sales by also controlling the wholesale distribution to retailers.

If Budweiser gets its way, distributors and retailers say drinkers who enjoy a variety of beers could be left crying in their pints.

Michael Binstein, owner of the Chicago-based Binny’s Beverage Depot chain, said if beer Goliath’s such as Anheuser Busch get to wield ownership influence over wholesalers or retailers, he might as well name his 28-stores “Budweiser Beverage Depot.”

Put it this way, Binstein said, “Would the NFL allow the Green Bay Packers to purchase 30 percent of the Chicago Bears? The answer is not if the mission was to foster and protect a truly competitive and independent league. And I think that’s a fair analogy.”

Currently, Illinois has a “three-tier” system of selling beer, wine and liquor through independent distributors and retail outlets — post-Prohibition regulation aimed at protecting the public from the potential “social ills” of drinking, advocates of a beer-sales status quo said. And the new craft beer law states each of those tiers must be independent of the other.

An Anheuser Busch spokeswoman declined to answer questions, but did say in a written statement that the company wants to remain involved in distributing beer “based on the local market.” An Anheuser Busch vice president argued that the company has legally had a stake in Illinois distributorships for years and should be allowed to retain their investment, according to a written statement.

The makers of Bud Light have hired clout-heavy lobbyists from both sides of the aisle to push their point of view. The team includes former state Sen. James DeLeo (D-Chicago), and former State Reps. Brent Hassert (R-Romeoville) and Coy Pugh (D-Chicago), a former gang member and convicted felon.

But don’t worry Bud drinkers, you’ll still be able to buy the King of Beers in Chicago regardless of the liquor commission decision.

“There’s zero chance of a Budweiser shortage,” liquor commission lawyer Ivan Fernandez said. “We’re not looking to hurt anyone, including the consumer.”

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