InBev Attacks Penn. Franchise Law

Seeks to overturn restrictions on out-of-state suppliers.

As reported by Beer Marketer’s Insights, InBev is challenging a Pennsylvania law that it contends treats out-of-state and local brewers differently in their relationships with distributors.

Pennsylvania law says out-of-state suppliers must have good cause to terminate arrangements with distributors and can’t unilaterally move brands. In-state brewers are exempted from these and other provisions.

Invoking the Supreme Court’s Granholm decision, as well as the Costco ruling in Washington state, InBev is arguing these laws are unconstitutionally discriminatory.

As reported by Beer Marketer’s Insights, the action springs from a legal dispute between a Pennsylvania distributor and InBev. InBev terminated the distributor in October 2006; A-B became a part of the suit after picking up the InBev brands.

This action comes in the wake of legal efforts by A-B to pick up distribution of InBev brands in other states. Brew Magazine explored this topic -- and the implication of brand shifts for distributors -- in April with a story called “OutBev." The story looked at A-B’s efforts to shift as much as 75 percent of InBev volume within a year.

To see the April issue of Brew Magazine, click here.

Beer Marketer's Insights' home page is here.