By Mathew Muncy for Indiana On Tap
Indiana has used a three-tier system since the abolition of Prohibition as a way to regulate production, distribution, and sales of alcohol. Based on current Indiana Code “The Prohibited Interest Provisions”, it is illegal for any wholesaler – Monarch in this case – to distribute beer and liquor simultaneously.
Monarch Beverage is challenging that the law is antiquated and unconstitutional, and claims they are being treated differently than other distributors. U.S. District Court Judge Sarah Evans Barker noted that Monarch Beverage was not able to provide evidence as such, thus the reasoning for ruling against the company.
The reason for Monarch even challenging the law has to do with the fact that one of their current clients, E. & J. Gallo Winery, also sells liquor.
Other beer and liquor wholesalers in Indiana are also worried Monarch Beverage would assume a monopoly over alcohol distribution in the state. Monarch was founded in 1947 and currently the largest beer distributor in Indiana, servicing 89 of the 92 Indiana counties. They also hold the exclusive distributor of Miller and Coors products in 69 counties. Monarch’s size, reach, and vast ability to promote their client’s products would make them an enticing partner to many liquor businesses.
If allowed to distribute liquor, Monarch would be able to “steal” clients from other distribution without having to pay any sort of compensation. An Indiana law currently requires beer distributors who take business from another must compensate them for their lost business, but that law does not apply to liquor distributors. While the lost business likely wouldn’t cause the other wholesalers to go out of business, it would create a very lopsided playing field in the distribution market.
According to the Indianapolis Star, a three-judge panel listened to arguments last Tuesday from lawyers for both Monarch Beverage and the state, and will declare a ruling at a later, yet currently unspecified, date.
Back in October of 2013, Indiana-based beer distributor Monarch Beverage filed suit against the commissioner of the Indiana Alcohol and Tobacco Commission. Why? Because the company had been denied a permit to distribute liquor. After losing in Marion Superior Court’s civil division and federal court, the company has taken the case to the Indiana Court of Appeals.
Indiana has used a three-tier system since the abolition of Prohibition as a way to regulate production, distribution, and sales of alcohol. Based on current Indiana Code “The Prohibited Interest Provisions”, it is illegal for any wholesaler – Monarch in this case – to distribute beer and liquor simultaneously.
Monarch Beverage is challenging that the law is antiquated and unconstitutional, and claims they are being treated differently than other distributors. U.S. District Court Judge Sarah Evans Barker noted that Monarch Beverage was not able to provide evidence as such, thus the reasoning for ruling against the company.
The reason for Monarch even challenging the law has to do with the fact that one of their current clients, E. & J. Gallo Winery, also sells liquor.
Other beer and liquor wholesalers in Indiana are also worried Monarch Beverage would assume a monopoly over alcohol distribution in the state. Monarch was founded in 1947 and currently the largest beer distributor in Indiana, servicing 89 of the 92 Indiana counties. They also hold the exclusive distributor of Miller and Coors products in 69 counties. Monarch’s size, reach, and vast ability to promote their client’s products would make them an enticing partner to many liquor businesses.
If allowed to distribute liquor, Monarch would be able to “steal” clients from other distribution without having to pay any sort of compensation. An Indiana law currently requires beer distributors who take business from another must compensate them for their lost business, but that law does not apply to liquor distributors. While the lost business likely wouldn’t cause the other wholesalers to go out of business, it would create a very lopsided playing field in the distribution market.
According to the Indianapolis Star, a three-judge panel listened to arguments last Tuesday from lawyers for both Monarch Beverage and the state, and will declare a ruling at a later, yet currently unspecified, date.
