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Senate advances brewer-licensing changes preserving three-tier system, allows temporary brewer ownership of distributors
Summary
Senators passed SB 100, which updates federal-compliance language for breweries and allows a brewer to temporarily hold a wholesaler’s license for up to two years when reselling is intended; debate focused on competition, vertical integration and whether two years is sufficient to turn around struggling distributorships.
The Senate on Feb. 23 approved Senate Bill 100, a two-part measure updating licensing language for brewers and addressing conditions under which a brewer may temporarily hold a distributor’s wholesale license.
Sponsor Craig Peterson said the first part of the bill simply brings state statute into alignment with federal trade rules and the second part preserves Utah’s three-tier distribution system while permitting a brewer to acquire a distri butorship for a limited, specified period if the brewer intends to resell it. "It is not an anti competitive bill. Is it a protectionist bill to a certain extent? Yes," Peterson said, explaining the goal is to protect in-state distribution businesses and employees.
Opponents warned the restriction on brewer ownership creates a special carve-out for an industry and may limit potential buyers. Senator Steiner called the measure "remarkable" for preventing vertical integration and proposed an amendment to lengthen a proposed temporary holding period from two to five years to give brewers more time to rehabilitate struggling distributors. That amendment failed on the floor.
Sponsor Peterson said the two-year period was a compromise, and he noted meetings with distributors produced agreement from at least one major brewer. Opponents pointed to cases where sellers needed more time to find buyers and cautioned two years might be too short for restructuring.
The floor called the question and the bill passed; the clerk announced the tally as 21 ayes, 4 nays, 4 absent. The bill was placed on the third-reading calendar.
Next steps: the bill will be considered on third reading and then, if approved, sent to the House.
