Last week’s announcement that the world’s two largest brewers would join forces has raised questions about monopolies and antitrust issues. But on a local level, the Anheuser Busch InBev-SABMiller merger could impact the state’s beer distribution network, and affect Oklahoma’s growing craft brew industry.
"AB InBev owns a distributor in Oklahoma. It only distributes 3.2 products, but that's a large chunk of what they sell in the state," said Journal Record managing editor Adam Brooks. "Brett Robinson at the Beer Distributors of Oklahoma said he expects that there will a thorough review of the deal before it's approved."
Labels like Mustang, Marshall, Choc, Coop, and Prairie are now as recognizable in most Oklahoma bars as Budweiser and Miller Lite. The Journal Record’s Molly Fleming reports proposed changes in state law could eliminate 3.2 percent alcohol-by-weight beer from store shelves, and the full-strength AB InBev and Miller products would start directly competing with local craft brewers:
Eric Marshall, founder of Tulsa-based Marshall Brewing Co., said that anytime the larger companies merge, the smaller brands will be affected. “There’s so much uncertainty about it,” he said. “Until the laws change and we’re all competing on the same arena, there’s a lot to wonder about.” Black Mesa Brewing Co. co-owner Brad Stumph said he is concerned about access to market, especially since both companies have a distributorship. “With our current system, it doesn’t seem like that huge of an interest,” he said. “But with that possibility of the laws changing, that could use the wholesale houses to not give us access.”
Fleming also examined the evolution of Oklahoma liquor laws dating back the day after statehood, when agents dumped thousands of gallons of beer into Oklahoma City’s sewer system. It’s an image of Prohibition – Elliot Ness and his Untouchables standing around casks holding Thompson machine guns – that was happening in the Sooner State more than a decade before the 18th Amendment to the U.S. Constitution.
"When we entered the Union, we were a dry state, and even when national Prohibition ended in 1933 the state only allowed what was called "non-intoxicating" 3-point beer," Brooks said. "Apparently though there was a large illegal liquor industry in the state, and that apparently was worth up to $85 million in today's dollars by the middle of the '50s."
In the 1950s, J. Howard Edmondson ran for governor on a platform that included repealing the state’s alcohol ban. Package liquor stores appeared in 1959, but liquor-by-the-drink in restaurants didn’t arrive until the 1980s. Half a century later, lawmakers are still making alcohol issues part of their campaign platforms, according to Fleming:
During the 2015 legislative session, state Sen. Stephanie Bice, R-Oklahoma City, proposed selling cold high-point beer in liquor stores. The bill evolved into one that would allow grocery stores to sell cold high-point beer and wine. But before that can happen, the 3.2-percent language must be stricken from the state constitution, said John Maisch, former general counsel of the Oklahoma Alcoholic Beverage Laws Enforcement Commission. Oklahoma voters would have to repeal Article 28, Section 2. Then, the Legislature could write details regarding where and when the high-point beer could be sold. Bice said that Senate Bill 383 would serve as the framework for a Senate joint resolution during the upcoming 2016 session. It would ask for the repeal of Article 28 of the Oklahoma Constitution. If repealed by a vote of the people in November 2016, it would be replaced by a new Title 37A of the Oklahoma statutes, which would outline new regulation on the sale of beer and wine. Title 37 deals with the sale of low-point beer and strong beer wine and spirits; therefore, it would need to be replaced with new regulations on beer and wine sales.
Oklahoma is one of only five states that still have 3.2 ABW beer, largely due to the strength of the state’s grocery and retail liquor lobbies.
"At first, the Retail Liquor Association was against making any changes. They want to protect their small stores, especially those who might not be able to afford refrigeration for cold beer," Brooks said. "But they seem to be coming on board, and they realized that this is what consumers want. I think the large grocery stores, it will sort of depend on what the rules are, and how they're allowed to participate."
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