Interested Party Testimony on House Bill 306 — Alan Szuter, Wolf's Ridge Brewing (December 5, 2023)

Summary

This is interested party testimony in support of House Bill 306 from Alan Szuter, owner of Wolf's Ridge Brewing in Columbus and Board President of the Ohio Craft Brewers Association, to the House Commerce and Labor Committee on December 5, 2023. It states that Ohio's Alcoholic Beverage Franchise Act was created in 1974 and that a contract between a beer manufacturer and a wholesaler under franchise law is virtually unbreakable by design. It states that craft brewers are responsible for $1.27 billion in economic output and support 12,000 Ohio jobs. It asks the Ohio Legislature to carve out craft brewers from the franchise law.

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Full text

Interested Party Testimony
Alan Szuter
Wolf’s Ridge Brewing

House Bill 306

December 5, 2023
House Commerce and Labor Committee

Chairman Johnson, Vice Chair Manchester, Ranking Member McNally and committee
members, thank you for the opportunity to testify on Repeal Day in support of House Bill
306. It is an ideal day to discuss the modernization of a law that no longer upholds its
intended purpose. My name is Alan Szuter. I am the owner of Wolf’s Ridge Brewing in
Columbus and Board President of the Ohio Craft Brewers Association.

Craft brewers create products and experiences that bring people together. As a group,
we care deeply about the state and the communities we work and live in. Our small
businesses are responsible for $1.27 billion in economic output and support 12,000
Ohio jobs. We take an incredible amount of pride in our work, our beer and the role we
play in our communities.

However, as our craft breweries continue to change the landscape of the industry, we
need Ohio law to keep pace.

In 1974, none of Ohio’s 429 craft breweries existed. At the time, lawmakers had no idea
what craft beer was, let alone that our small businesses would become integral parts of
hundreds of Ohio communities. Ohio’s Alcoholic Beverage Franchise Act was created in
1974 to protect small, family-run, local beer wholesalers from the influence of large,
consolidated brewing corporations. Now nearly 50 years later, beer wholesalers are the
large, consolidated corporations and craft breweries are the small, family-run local
businesses.

Left untouched, franchise law protects large companies and hurts small businesses,
which is exactly the opposite of why it was created in the first place.

A contract between a beer manufacturer and a wholesaler under franchise law is
virtually unbreakable by design. In 1974, if a mega-brewery pulled their beer from a
wholesaler, that small business would be out of business. In 2023, a small brewery is
expected to sign the same, unbreakable contract with a wholesaler. The brewery has no
recourse if the wholesaler doesn’t meet the terms of the contract. The brewery’s
business is left to suffer until the wholesaler decides to let them out, sells them off, or
the brewery sells or folds.

A small, growing brewery must seriously consider the ramifications of being
permanently “married” to a wholesale partner due to franchise laws. If a wholesaler
stops our beer from making it to customers, we have no way to compete and grow our
businesses. I am here today speaking not only for my brewery, but the dozens of others
in distribution contracts who are afraid of upsetting their wholesalers and impacting the
critical relationship that they depend on to deliver their beer to retailers.

We ask the Ohio Legislature to carve out craft brewers from this franchise law that was
never meant for us. Allow our small business owners to take control of our business and
sign equitable and enforceable contracts. We are not asking for special protection under
the law as the wholesalers did in 1974. We simply want a fairly negotiated contract
between a brewery and wholesaler to be subject to established contract law, just as our
contracts with every other supplier and service provider are.

We can make this common sense, reasonable change without disrupting the existing
three-tier system. Brewers and wholesalers should be equal partners in the
determination of how and where beer goes to market, but the franchise law has created
an imbalance of power and inequitable relationship.

This small reform will have big impacts for Ohio craft breweries, allowing us to
sustainably grow our businesses and provide more avenues for us to supply our
customers.

As our state changes, our laws have to keep up. Ohio is a great place to live and do
business for so many, but we need to make sure that it’s a good place to do business
for everyone. Please help us repeal the impact of franchise law on Ohio’s small and
independent breweries.

Thank you for the time and consideration, I’m happy to answer any questions.


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