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A Deeper Look at the Lobbying Over Kentucky Beer Distribution

Edwin Lee/Creative Commons

Although the battle over how beer gets to consumers will be openly fought in the Kentucky General Assembly this month, the campaign to win the votes of lawmakers actually began in 2014.

House Bill 168, introduced by Kentucky House Speaker Greg Stumbo, D-Prestonsburg, would forbid companies to brew and distribute beer. The bill is aimed at global suds juggernaut Anheuser-Busch InBev, which already owned a distributorship in Louisville when it bought another in Owensboro late last year. Small breweries and independent distributors — many of whom sell AB InBev’s Budweiser, Corona and Stella Artois brands — support the bill.

“Unlike independent distributors, ABInBev only distributes its own products,” says Kentuckians for Entrepreneurs and Growth, a loose confederation of breweries and distributors in the state, on its website. “This type of monopolization stifles consumer choice and market competition.”

AB InBev opposes the bill as “unnecessary government intervention in the free market,” said Damon Williams, sales and marketing director at Anheuser-Busch of Louisville, in a statement.

“We believe any bill that would attempt to strip Anheuser-Busch of its long held ownership interests in Louisville or Owensboro is both unnecessary and unconstitutional,” he said. “We will take any and all steps available to us to protect our nearly 200 Kentucky employees and our brand.”

That’s what AB InBev did last October when it asked a Franklin County judge to uphold its purchase of the Owensboro distributorship under current law. One month later, the judge ordered the Department of Alcoholic Beverage Control to issue the company a distributor’s license.

As of today, the bill is awaiting consideration by the House Licensing and Occupations Committee. But the two warring sides have already spent more than $200,000 combined in the past year — in payments to lobbyists and contributions to election campaigns — to sway legislators.

That money is at work now. Here’s where it went, according to reports filed with the Kentucky Legislative Ethics Commission:

  • AB InBev spent $94,065 on lobbying in 2014. Through the first eight months of the year, it was content with lobbyists John P. Cooper, Russ Woodward and Marshall White III. Then, after Sept. 1, the company tripled its lobbyist workforce and shelled out $47,333, half its lobbying cost for the full year.
  • The Kentucky Beer Wholesalers Association, mostly distributors of MillerCoors products, also loaded up in the last four months of 2014. After getting by with three lobbyists all year, it went with five by year’s end. It had an annual lobbying tab of $99,657 in 2014 and, of that, paid $29,000 to lobbyist and thoroughbred horse industry spokesman Gene McLean in the last four months alone.
  • Kentuckians for Entrepreneurs joined the fray at the end of 2014 by spending $16,058 on a platoon of 14 lobbyists, including former Kentucky Republican Party Chairman John T. McCarthy III, who received $5,000.

The Kentucky Beer Wholesalers Association and several of its members hedged their bets last year by splashing an additional $18,400 on the election campaigns of 45 state Senate and House candidates, according to the National Institute on Money in State Politics in Missoula, Montana. The sum included $900 to House Majority Caucus Chairwoman Sannie Overly, D-Paris, and $250 to House Majority Whip Johnnie Bell, D-Glasgow. No Senate leaders received KBWA money in 2014.

Anheuser-Busch InBev didn’t make any political campaign contributions in state elections in 2014.

House Bill 168 is testing relations between AB InBev and the companies that ship its products to stores, restaurants, bars and arenas in Kentucky. Among the distributors supporting the bill — and thus fighting AB InBev — are at least five that move Anheuser-Busch brands, including Kentucky Eagle in Lexington and JB Distributors in Bowling Green.

Complicating things is that those five distributors belong to the Kentucky Malt Beverage Council with Anheuser-Busch Sales of Louisville, a distributorship that AB InBev bought in 1978. The council spent $24,544 on lobbying efforts and $1,500 on legislative candidates in 2014. It is not known to have taken sides in the fight over HB 168.

Also quiet on the matter is MillerCoors. It spent $18,810 on lobbyist James “Jitter” Allen in 2014.

This story was reported by Louisville Public Media's Kentucky Center for Investigative Reporting.

James McNair is a veteran investigative reporter who specializes in business and finance issues.

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