The Beer Game and the Supply Chain

Illinois House passes bill protecting craft brewers' right to distribute - chicagotribune.com: "The Illinois House of Representatives passed a bill Monday designed to protect small craft brewers' ability to enter the market.

The bill, SB 754, had more than 70 co-sponsors by the time it reached the floor. It would allow certain small Illinois brewers to distribute half of their own beer. The bill must now be approved by Gov. Pat Quinn.
Most states have three tiers in place for alcohol distribution: a manufacturer, a retailer and a distributor. The system, put in place at the end of Prohibition, was designed to ensure a properly regulated market.

Small craft brewers have argued that it is difficult to attract distributors with an unknown product, and is necessary to peddle them to bars and liquor stores directly, and gradually establish a following. Anheuser-Busch, however, has argued that this allows in-state brewers to self-distribute when out-of-state brewers are not granted the same privilege.

In an interview Monday afternoon at McCormick Place, Sam Adams founder Jim Koch described the three-tier system as having been instrumental to the rise of craft beer in the United States. However, he said, he couldn't get a distributor in the early days of the Boston Beer Co., and "I put cold beer in a briefcase and went bar to bar."

Once a brewery becomes established, he said, it's much easier to hand distribution over to the professionals. "Brewers want to make beer," he said. "