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New Illinois bill proposes legalizing direct-to-consumer craft beer delivery

The legislation would allow Illinois' over 300 craft breweries to ship products directly to customers — a privilege that wineries have held for more than 15 years.

SPRINGFIELD, Ill. — Craft breweries across Illinois are paying close attention to a new bill that could revolutionize the way they serve their customers.

On Feb. 10, 2023, the Illinois Craft Brewers Guild filed legislation seeking to legalize direct-to-customer shipping for craft breweries — something they haven't been able to do because of current laws on brewery self-distribution.

The bill, SB2193, sponsored by Sen. Ram Villivalam, would amend the Liquor Control Act of 1934 and allow people with certain brewer licenses to ship the beer they make directly to Illinois residents over 21 for the purpose of personal use.

The Craft Brewer's Guild is strongly calling for the bill to be passed and, in an article posted to its website, explains just how much it could benefit the brewing business.

According to the organization, craft breweries first began their meteoric ascension in Illinois in 2011, after breweries were first allowed to self-distribute, or sell their product directly to retailers, bars and restaurants without having to go through a third-party distributor.

This model of self-distribution, which is still in effect, allowed beer producers to spend less money on third-party contractors and have more direct access to retail and hospitality industries to sell and market their products.

However, the Craft Brewers Guild said this model doesn't meet the need of the modern craft brewing industry — especially for small, independent brewers that don't distribute widely and breweries that create unique drinks that might have a higher cost to produce.

"The fact that Illinois laws force some craft breweries to contract with third-party distribution is antiquated and unnecessary," Illinois Craft Brewers Guild Executive Director Ray Stout said. "It creates an intentional power imbalance between local breweries and consolidated distribution corporations through the enforcement of what are called 'franchise laws.'” 

Stout pointed out difficulties created by the Beer Industry Fair Dealing Act, which requires brewers to create contracts with distributors, which he said can be nearly impossible to terminate and give more decision-making power to the distributor to the detriment of the small businesses they contract with.

The guild also noted that Illinois wineries have been able to ship directly to customers for over 15 years, saying that fact proves that direct shipping of alcohol can be done safely and responsibly with little to no impact on retailers.

The goal, Stout told News 8, is to help craft breweries continue to recover post-pandemic. Most breweries across Illinois are reporting business is around 70% of what it was prior to the pandemic, he said.

"And so folks aren't coming out to the taprooms to purchase beer, that beer is being unsold," Stout told News 8. "And so we need to make sure that we have opportunities for brewers to reach consumers where they are."

Breweries could only ship to people living in Illinois. People must be 21 years old to order and can order up to 12 cases of beer.

Reserve Artisan Ales in Galesburg is one of nearly 300 member breweries in the guild.

"It would be a huge benefit to small breweries like us to try to get our name out there to other people across the state," Co-Owner Blake Benedict said.

The pour-your-own brewery opened a little over a year ago and specializes in making one-off styles of beers. With its license now, it has self-distribution capabilities, but it can only distribute so far and has limited production. People can walk in a buy already canned bottles to bring home.

"We can go to stores and put our product and we can go to bars and put our product, an unlimited amount. We can't go over so many barrels a year," Benedict said. "Shelf space, in general, is hard to come by in a lot of grocery stores and liquor stores, so if somebody knows who we are, and they want us to ship something directly to them, we can get it to them in a timely fashion. And it would just benefit us to be able to get our beer to reaches that we wouldn't be able to through distribution."

The bill resides in the Illinois Senate after its filing and initial reading on Feb. 10.

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