The State of Michigan Breweries and Distribution Laws
Frankenmuth Brewery on April 23, 2012 in Brewery | No Comments »Ever
gone to your local beer store and wondered why some of your favorite Michigan breweries, like Frankenmuth Brewery, aren’t represented very well? Why so many big box beers and so little Mitten State love? This has to do with a complex three-tiered distribution system that renders breweries unable to sell their beer anywhere except at their brew facility. Confused? Let us shed some light on the brew subject.
In the time after prohibition, the State of Michigan set up strict laws that stated Michigan breweries were unable to sell their products to any bar, restaurant or store. Instead, breweries would have to sell their product to a wholesale distribution company, who in turn would take the beer and provide it to their clients. “The large beer manufacturers are 95% of the market and they are master puppeteers of their distribution channels,” explains Frankenmuth President Haithem K. Sarafa. Thus, distribution companies have controlled where Michigan brew products are bought and sold for nearly 80 years.
These rules didn’t always put breweries at a disadvantage, as Michigan distribution companies have also done good work to spread Michigan beer love. Through distributor’s leverage, larger breweries have been able to get their product into new places and introduce new beer lines with little-to-no trouble. These elements have been key in the growth of the Michigan microbrewery scene, but as the community has progressed it has hindered mid-to-small level breweries from pushing their products to store shelves. ”Although there are some distributors that work well with craft beer manufacturers, it is somewhat difficult to plan your business when you have no control over distribution and pricing, especially of a perishable product,” Sarafa states.
As previously mentioned on the Frankenmuth blogosphere, Governor Rick Snyder created a committee earlier this year that is looking at administrative rules like the ones that are holding back breweries from selling their own beer outside of their establishment. With a little time and work, some of these rules that have been around since the time of Prohibition could be off the books soon. This progressive look forward is a step in the right direction for Michigan breweries across this great state.


















