'We just got screwed' by KY beer bill





If you've got a question about what's going on with this bill and its affect on the beers you can buy in Northern Kentucky, tweet @jamespilcher or email jpilcher@enquirer.com.

FRANKFORT – The Kentucky Senate Wednesday passed a controversial bill that more clearly separates the state's beer brewing and distribution systems but also could put one local company out of business and at least temporarily limit access to Rhinegeist in Northern Kentucky.

HB 168, which prohibits brewers from owning/operating a distributorship, passed the House earlier this week in another close vote and now heads to Gov. Steve Beshear's desk for final approval.

Wednesday's Senate debate and 23-13 vote showed the strange bedfellows HB 168 created, with some Republicans voting against property rights of businesses and some Democrats defending those rights.

"This is one of those 51-49 issues that can split us all," said Senate Majority Leader Damon Thayer, R-Georgetown. "This one put me in a parallel universe."

Once signed, the measure will require Anheuser-Busch to either sell or close two distributorships in the state, including a long-standing business in Lousville. Anheuser-Busch bought another one in Owensboro last year and successfully sued to overturn existing regulations, leading to this year's legislation.

All four Northern Kentucky senators voted in favor of the bill, with Sen. John Schickel, R-Union, sponsoring the House version Wednesday. In the previous House vote, only Rep. Adam Koenig, R-Erlanger, and Rep. Dennis Keene, D-Wilder, voted against the measure in a 67-31 vote.

The bill also will force the owners of Erlanger-based Riverghost LLC to either sell or close their distributorship. That company was created in December 2014 by the founders of Rhinegeist Brewing of Over-the-Rhine as a way to distribute its beer in Northern Kentucky, with the hopes of distributing other craft beers and wines in the area as well.

Now the company will have to not only divest itself of Riverghost, but also sign on with one of two distributors who serve Northern Kentucky to distribute Rhinegeist in the region after investing upwards of $300,000 in the new company.

"We just got screwed ... this is why I hate government," said Rhinegeist co-founder and president Bob Bonder, who was in Frankfort Wednesday lobbying against the bill. "The entire debate today was about Anheuser-Busch and we didn't get mentioned at all. That's because it's too difficult for them to address our situation.

"I mean what kind of state votes to take away someone's business just three months after they started it?"

But other craft brewers rejoiced at the passage, saying it creates a more even playing field for their products and that they don't have to worry about Anheuser-Busch putting their own brands above independent brews on the shelves. In fact, a sizable contingent of brewers from around the state clapped and cheered outside the Senate chambers after the vote.

"I can't tell you how extremely happy I am right now," said a tearful Daniel "DH" Harrison, co-founder of Lexington-based Country Boy Brewing. "Thanks to the leadership in both houses."

Before the debate began, a floor amendment that would have allowed Anheuser-Busch as well as Riverghost to keep operating their existing distributorships was pulled. A similar amendment proposed by Rep. Adam Koenig, R-Erlanger, was defeated narrowly in the House earlier this week.

Senate President Robert Stivers, R-Manchester, said that the amendment's sponsor told leadership the votes weren't there before Wednesday's session and asked for it to be pulled.

House Speaker Greg Stumbo, D-Prestonsburg, said Wednesday that such an amendment would appear to be "fair to those concerned," but that it could set up an even greater chance for a lawsuit by another brewer claiming special treatment.

Stivers also said he expected Anheuser-Busch or others to sue over the measure.

"Listen, we had our lawyers and outside lawyers look at this thing one way and down the other, and it actually creates a conflict between the 14th Amendment and the 21st Amendment," Stivers said. "I think we are in for a collegial discussion of this in the courts."

Anheuser-Busch released a statement saying that in contrast to previous reports, that it supported the amendment.

"This has been an appalling exercise and nothing short of a full-scale attack on a good corporate citizen who has followed every rule and invested heavily in the Commonwealth of Kentucky for decades," Anheuser-Busch of Louisville's director of sales and marketing Damon Williams said in a statement late Wednesday. "This legislation violates our rights under the U.S. and Kentucky constitutions, discriminates against our company by providing economic protections for in-state special interests, and represents nothing short of a taking of our property."

The statement indicated Anheuser-Busch could possibly sue if the bill does become law. As for Rhinegeist's next steps, Bonder said that the company needed to consider its options.

"We're driving back to Cincinnati and we'll have a beer and think on it," Bonder said. "This was just so unexpected ... we have a lot of talking to do."

Weather schedule: With the 30-day session set to expire Monday night, the leaders of both chambers said there were no plans as of Wednesday night to cancel any or all of the upcoming legislative schedule for the rest of the week. The weather became a political issue last month when the House canceled for four days after a snowstorm, while the Senate only took two days and kept working, leading to some protests by Senate Democrats.

"We're here this week and no one is going home and won't get stuck," Stivers said.