Ohio bill would exempt small craft breweries from 1974 franchise rules

Representative Barhorst urged the House Judiciary Committee to update Ohio's Alcoholic Beverages Franchise Act of 1974, telling the panel that the law imposes an “outdated burden on craft breweries.” Representative Barhorst said House Bill 194 would exempt breweries that produce 250,000 barrels or less from the franchise law and let them operate under standard contract rules.

The bill’s sponsor said the franchise statute “locks brewers into self renewing contracts and forces costly litigation to resolve disputes,” and that roughly “over 400” craft breweries across Ohio are small businesses that drive local jobs and investment. Chair Thomas presided over the first hearing and accepted the testimony; Representative Callender questioned whether the sponsor intended to reduce litigation costs and the sponsor said that was the intent.

Proponents framed HB 194 as a targeted update, not a broad deregulatory move. Barhorst emphasized the change was meant to let smaller brewers negotiate and, if necessary, exit agreements under the ordinary contract standards that apply to most businesses. No distributor witnesses appeared in this hearing and no committee vote on the bill was taken; the session was presented as the first hearing and the committee closed the item for that day.

Because HB 194 was at its initial hearing, committee members reserved detailed drafting questions and said additional testimony or hearings could follow. The committee packet and supporting testimony were available to members on iPads, and the chairman invited questions from members before closing the record for the day.

The committee will consider additional information and potential amendments in later sessions before taking formal action on HB 194.