Indiana

Bar Wars III

By Abdul Hakim-Shabazz

Supporters of a measure that would change the way alcohol is sold and distributed in Indiana admit changes will have to be made to the legislation amidst growing opposition from a number of places.

Currently, the bill requires an alcohol wholesaler to be reimbursed if they lose a contract with a supplier to another wholesaler.  The subsequent wholesaler would have to pay the previous entity the fair market value of any revenue loss to the previous distributor.

Bill sponsor, Scott Pelath says the bill was necessary to provide “stability” to Indiana’s alcohol market and that it is not uncommon for Indiana to provide some protection for franchises which it heavily regulates, like gambling.  However, critics say the measure would have been the equivalent of forcing one casino to pay another every time it lost a customer to another casino.

In Indiana National Wine and Spirits controls between 60-70 percent of the market; a virtual monopoly.  The Governor’s office has no official position on the measure, however sources tell me when the bill was first brought to his attention he reportedly said he did not want to see anything that would stifle economic development in the state.  In addition House Speaker Pat Bauer, I’m told, got an earful from a number of groups who oppose the legislation, including labor unions a key Democratic constituency.

Despite the growing uproar, the only amendment introduced to alter the legislation does not remove the monopoly language.  Similar measures were either held to be  unconstitutional in other states or lawmakers repealed the bills after alcohol prices soared and there was an outcry from the public.

Full post as published by Indiana Barrister on January 26, 2010 (boomark / email).