FTC Staff Says Proposed Massachusetts Law Would Limit Competition and Raise Costs in Distribution of Malt Beverages

Federal Trade Commission staff, in a comment to Massachusetts State Representative Alice Peisch, advised against passage of Massachusetts House Bill 1871, which would impose new administrative requirements on the acquirer of a malt beverage brewer if it subsequently wants to terminate a wholesale distribution agreement that existed between that brewer and its wholesale distributor. If adopted, the comment stated, the measure “would further impede competition in the distribution of malt beverages, and thereby harm competition and consumers.” For example, it would increase distribution costs by adding new administrative procedures and requiring the new wholesaler to buy the distribution rights from the former wholesaler unless the acquiring firm can prove that it has good cause under Massachusetts law for terminating the existing wholesale agreement.

The staff comment supported passage of alternative legislation introduced by Rep. Peisch. “Because H.B. 1897 avoids the additional restrictions on successor suppliers and would provide some relief [under current law] for ‘small brewer relationships,’ it likely would be an improvement over the current regulatory environment,” the comment stated.

The Commission vote authorizing the staff to file the comment was 5-0. It was sent on May 17, 2011. (FTC File No. V110008; the staff contact is Patricia Schultheiss, Office of Policy Planning, 202-326-2877.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. “Like” the FTC on Facebook and “follow” us on Twitter.

(Massachusetts Malt Beverages)

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