Anheuser-Busch, State Senator Square Off Over Changes To Oklahoma's Alcohol Laws
Beer giant Anheuser-Busch is vocally opposing legislation that would allow beer and wine sales at Oklahoma grocery stores, arguing it would end the company’s ability to distribute low-point-beer in the state.
Updated February 19, 2:12 p.m.
The head of a grassroots organization that wants to change Oklahoma's liquor laws criticized Anheuser-Busch for its opposition to Senate legislation that would expand where full-strength beer and wine can be sold.
LOCAL Executive Director Kevin Hall said the beer giant isn't concerned with consumer choice or Oklahoma businesses, and called the St. Louis, Missouri-based company "a bully."
"They care about expanding their already massive corporation, owning and controlling the means by which products get to market and pushing competitors out of business," Hall said in a statement.
Senate President Pro Tem Brian Bingman, R-Sapulpa, told reporters Thursday even though polling shows consumers are overwhelmingly in favor of reforming alcohol laws, the process is complicated:
"Currently, 3.2 beer is not considered alcohol in Oklahoma. It's a food," Bingman said. "So it's taxed differently and it's set up differently. Alcohol, we have a three-tier system in Oklahoma. So as you try to move the wine and strong beer to that three-tier system, a lot of these companies aren't set up that way."
Anheuser-Busch launched a massive media campaign this week against the legislation by state Sen. Clark Jolley that wants to put a proposed constitutional amendment to Oklahoma's alcohol laws to a vote of the people.
On Wednesday the 15-member Rules Committee voted by a 4-1 margin to send state Sen. Clark Jolley’s resolution to the Senate floor.
Jolley says the proposal to end a regulatory exemption for alcoholic beverages with less than 3.2 percent alcohol-by-weight would put smaller craft brewers on more equal footing with larger, national manufacturers.
Anheuser-Busch launched a website and took out a full-page advertisement in Wednesday’s issue of The Oklahoman, saying Jolley’s bill would force the St. Louis-based company out of Oklahoma and raise the price of beer in the state. The company also started conversation on social media using the hashtag #StopClark.
“With a $1.3 billion deficit in our state, shouldn’t Senator Jolley be focusing on something other than legislation that puts a company out of business in Oklahoma?” the ad states.
During the committee hearing Wednesday, the Edmond Republican said he’s not trying to put anyone out of business, or give an advantage to others, KWGS Public Radio Tulsa’s Matt Trotter reports:
"The goal of this is to provide consumers with wine in grocery and convenience, provide them with single-strength beer at their option if they would wish to purchase that and to take a lot of the handcuffs off the package stores and the grocers and the retailers that are forbidden right now from offering those products," Jolley said. Anheuser-Busch claims Jolley’s bill will also raise beer prices because the wholesalers they would have to use couldn’t charge different retailers different prices. Jolley said in nine other states that closed the two-tier loophole that allows producers to distribute as well, large brewers haven’t lost any jobs. "The norm is that, in the three-tier system with independent distributors, they actually employ more people than brewery-owned distributorships," Jolley said. "So, the loophole actually hurts a lot of locally owned businesses, like craft brewers, independent beer distributors, by allowing large brewers, basically, to control large swaths of the market."
Anheuser-Busch owns distribution centers in Oklahoma City and Tulsa. Spokesman Eric James says the company would have to sell these centers within five years if the constitutional amendment is adopted as written.
AB InBev, the Belgian parent company of Anheuser-Busch, took control of 88 percent of the 3.2 beer sales in Oklahoma after purchasing the Premium Beers of Oklahoma distribution company four years ago, according to The Journal Record’s Molly Fleming:
Taking 3.2-percent beer off the state books would mean AB InBev would not be able to self-distribute most of its products and could potentially cost the company 700 jobs, James said. . . . “We are the only person in this current language that’s being legislated out of business,” he said. “Everyone else is left to consumer dynamics. We are being told we cannot operate. This is not related to modernization. It’s not fair.” Even if the company has to sell its Oklahoma City and Tulsa operations to other companies, it would not mean AB products are done in Oklahoma. James said there are Budweiser distributors in Muskogee, Durant and Amarillo, Texas, that could bring the products to store shelves.
In a statement, Beer Distributors of Oklahoma president Brett Robinson called the resolution “quality legislation,” Fleming writes:
“(Allowing consumers to vote on the state’s alcohol laws) will protect the independent three-tier system, provide more consumer choice, allow Oklahoma craft brewers to expand their markets and safeguard against foreign-owned brewery monopolies,” Robinson stated. The Institute for Responsible Alcohol Policy Director John Maisch also said in a prepared statement that the resolution is a positive step. Oklahomans for Consumer Freedom, doing business as Tap Oklahoma, gave its support to the legislation as well. “Moving forward, it’s important that legislators continue to support a strong, independent three-tier system with regulatory checks and balances promoting public safety and consumer choice,” Maisch said.