The Bell's in the Distance

By Chuck Sudo in Food on Oct 16, 2006 4:53PM

2006_10_bells.gifIf you notice a reduced presence of Bell's beer on the shelves and in bars in the coming weeks, there's a reason. Bell's delivered their last shipment of beer to Illinois last week. Here is some of what Bell's founder Larry Bell wrote last week regarding the situation on a forum thread at the Beer Advocate website (post number 32):

"I'm very tired and sad tonight, but I will share thoughts with this group soon. Let me just say that there are some very bad people in Chicago, and that the franchise act certainly does not favor small brewers."

How did this all come about? The current owner of Bell's distribution rights is Jim LaCrosse, who's the CEO of Union Beverage Company. According to Bell's brewery reps with whom we've had contact, LaCrosse was thisclose to selling his Bell's distribution rights to Chicago Beverage Systems, part of a monolith national beer wholesaler which distributes Miller, Coors, Heineken/Amstel, most of the popular Mexican beer brands, Newcastle, Stella Artois, Guinness/Bass, and countless other beer brands (they just added Sierra Nevada and Paulaner this week). Chicago Beverage has a reputation for ... well, let's be generous and say they have poor customer service skills. Most likely, this is because they have a monopoly on so many beer brands, so they're the only game in town. Reads like a page from the ComEd playbook.

Anyway, rather than do business with Chicago Beverage, when Bell got word of the impending sale, he opted instead to stop shipping his beer to Illinois as a form of protest, effectively killing the sale. From personal experience of having to deal with Chicago Beverage on a weekly basis, we applaud Bell's decision, as do unnamed sources at Union Beverage we called for comment.

The loss of Bell's in Illinois sheds light on the little-known details of "franchise rights" among liquor wholesalers. Thanks in large part to the lobbying efforts of the state's beer and spirits distributors, the distribution rights for beer brands are open-ended and weighted in favor of the distributors. By pulling his beers from Illinois in protest, Bell is hoping to shed some light on this, as craft brewers, in particular, often have to make these agreements in order to market their product. Before Goose Island entered their distribution deal with Anheuser Busch, they had similar problems with Union Beverage. There have been rumblings that Bell's can be gone from the market for a year, but the reality is, unless they come to an agreement with LaCrosse, LaCrosse sells his rights to a distributor that Bell respects, or Bell's sues to extricate themselves from their deal, they could be gone for much longer than that. It hurts Union more than it does Bell's; Chicago is Bell's fourth-largest market, but the brewery is extending its reach into other states and feel they can withstand the hit.

What is certain in all this is that Bell doesn't feel that he can do business with LaCrosse in good faith anymore, and we'll be making frequent trips to Kalamazoo.