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Heineken’s heavy-handed tactics in UK reinforce importance of Michigan’s three-tier system for alcohol distribution

Monday, November 02, 2020 1:55 PM | Anonymous

Brewery fined $2.6 million for forcing bars to sell ‘unreasonable’ amounts of its beers

LANSING — A report Thursday in the BBC and other European news outlets on Dutch brewer Heineken’s efforts to force bars in the United Kingdom to exclusively sell its beers reinforces the importance of the three-tier system of alcohol distribution in Michigan and across the United States.

“Our three-tier system for alcohol distribution ensures what Heineken did in the UK will never happen in America,” said Spencer Nevins, president of the Michigan Beer & Wine Wholesalers Association. “Michigan’s beer and wine distributors are proud to promote choice and competition by preventing large out-of-state and foreign companies from having a monopoly on the alcohol market.”

Unlike America, many parts of Europe still allow some form of “tied-houses,” where a brewery owns hundreds of bars and can control what is served on tap.

The bars involved in the year-long Heineken investigation wanted to break their exclusive tie with the brewer and offer other beers. Heineken’s pub arm, Star Pubs and Bars, instead doubled down, according to the report.

“Star Pubs and Bars ‘seriously and repeatedly’ broke rules for three years,” according to the BBC. “[The investigation] found several pubs who had asked to no longer be tied to Heineken were told that 100% of the keg beer they sold had to be Heineken brands.”

“Thanks to Michigan’s regulatory structure that prevents large multi-national alcohol suppliers from owning or controlling distributors and retailers our state is among the top 10 states in the number of breweries and wineries. Michigan is poised to keep growing through a three-tier system that promotes fairness and a level playing field,” Nevins said. “That’s why we call on the Michigan Liquor Control Commission to follow the lead of UK regulators and step up enforcement of Michigan’s regulations that prevent unscrupulous mega alcohol suppliers from unlawfully controlling and coercing distributors and retailers in order to block out competition in Michigan.”

Nevins recently penned a column in the Detroit News outlining the importance of the three-tier system.

“If you need evidence, look no further than the liquor section of your local grocery store. Michigan residents are greeted with a dizzying array of options of beer, wine and spirits produced right here in Michigan, across the country and around the world. For example, over 1,500 producers of beer compete on a daily basis for shelf space and tap handles in over 18,000 licensed accounts in Michigan. No other industry comes close to that level of competition,” Nevins wrote.

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