US: Anheuser-Busch files Illinois complaint

Anheuser-Busch InBev's US unit is appealing against a ruling in Illinois, claiming that authorities in the state “have erected protectionist and discriminatory barriers to out-of-state beer producers”.

Anheuser-Busch (A-B) filed a complaint on Wednesday (10 March) with the US District Court for Illinois, claiming that the Illinois Liquor Control Commission (ILCC) was depriving it of “the opportunity to compete on an equal footing with the in-state beer producers”.

A-B has been looking to increase its 30% stake in Illinois distributor City Beverage.

Earlier this month, however, the ILCC advised A-B that, based on the law, the Liquor Control Act “prohibits an Illinois-licensed non-resident dealer from possessing an ownership interest in a licensed Illinois distributor”.

Upping its stake in City Beverage, the ILCC said, would deem City Beverage in violation of the country's Liquor Control Act. “Preserving Illinois' three tier distribution system ... is a fundamental objective of the Liquor Control Act and the Illinois legislature,” the ILCC noted.

In its complaint, A-B said it had notified the ILCC on 6 January that it planned to buy the remaining 70% of City Beverage from SD of Illinois and Double Eagle Distributing Company, which own 35% each.

Routine discussions between A-B and the ILCC thereafter did not throw up the possibility that the transaction would violate Illinois law, A-B claimed.

It was only on 11 February, the day before the transaction was to complete, that a representative of the ILCC advised A-B that the move would be illiegal, the brewer said. “According to (the ILCC), in-state brewers are eligible to hold distributor’s and importing distributor’s licenses (which permit that brewer to import and distribute beer directly to retailers) while out-of-state brewers are ineligible ,” A-B said.

A-B even claimed the ruling “amounts to thinly-veiled economic protectionism of in-state businesses”.

The brewer has asked the District Court to permit both its proposed transaction for the remainder of City Beverage and to then allow City to be granted the licenses necessary to distribute beer in Illinois.

The initial ruling from the ILCC can be found here. To read A-B's full complaint, click here.