SB-1426: The Pay-to-Play Bill That Could Kill Craft Beer

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There’s something brewing in the California senate and it could have a devastating effect on the craft beer industry here in San Diego as well as the rest of the Golden state. An article in The West Coaster recently brought up the issues with SB-1426, which would legalize pay-to-play, and is rallying support within the craft beer community to oppose this bill alongside the California Craft Brewers Association (CCBA) and the San Diego Brewers Guild (SDBG).

What is pay-to-play? Since Prohibition, there have been laws on the books called tied house laws. Tied house laws are federal and state laws that prevent alcohol suppliers (like breweries, wineries and distributors) from exerting undue influence over retailers. In essence they are meant to protect the industry from unfair business practices. Pay-to-Play is when a supplier offers money or other compensation to a retailer in exchange the promotion or marketing of their beverage. This could be shelf space, marketing costs, free advertising or even tap handles at a location. Although the practice is illegal, it’s well known within the industry that it certainly happens. The bigger the business or supplier is, the more they can pay to have their beer front and center of the retailer’s space.

The SB-1426 bill would essentially legalize the pay-to-play practice here in California by allowing for compensation to be given to retailers for things like marketing and alcoholic beverage promotion.  This would give an unfair advantage to big suppliers like Budweiser or big distributors with lots of money to throw at retailers for this purpose.

We have talked about this issue before, but it all goes back to big beer companies buying up craft breweries like 10 Barrel Brewing, Saint Archers, Golden Road, Elysian and more. They bought these craft beer companies to actively compete with the rest of the craft beer community. If this bill goes through, they will legally be allowed to us their millions of dollars to influence what brands of beers you see in bars, restaurants and retail locations throughout California.

Here at Thorn Street Brewery we self-distribute and simply don’t have the budget to pay what these companies will be able to pay to have their brands promoted, marketed and available. What this means for you, the craft beer lover, is that you will see more and more independent breweries not able to get their beer in the same places, which will lead to a decrease in beer diversity and availability. But don’t worry, big beer has a bunch of “craft breweries” to fill those taps and shelf space that they will certainly be paying for. It just won’t be many of your favorite San Diego (and beyond) breweries.

So what can you do? You can email or call your representative and let them know you don’t support SB-1426 and that it will actively hurt the craft beer community which California has worked so hard to build. Find out who your local rep is here  at http://findyourrep.legislature.ca.gov/ and help make sure that all craft breweries get a chance to play.

Anna Brigham

6/24/16

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