New York Craft Beer Brews Up a Battle
By: Sarah Chappell
Published: May 1, 2011

New York State craft breweries are fighting beer distributers over an obscure but damaging law. In the American three-tiered system, a brewery must first sell to a distributor, who then sells the beer to retail shops and restaurants. Brooklyn Brewery initially had success with one company, but found over time that the distributor was not fully supporting the brand. According to Crain's New York, when Brooklyn Brewery attempted to terminate the contract, the distributor sued under "New York's alcoholic beverage control law—which binds brewers to one distributor within a marketing region once an agreement is in place." Brooklyn Brewery was required to prove in court that the distributor was inadequate, and then had to pay them a fee to end the relationship.
This law was initially passed in the 1990s when large breweries dominated the beer market. The goal was to protect distributors from losing these crucial accounts without just cause. But now, with over 60 craft breweries in New York State, distributors can abuse this law by neglecting the products, knowing that a small company cannot afford to take legal action.
Photo by Kevin Gessner