By The Associated Press
Wednesday, March 10, 2010
The Illinois Liquor Control Commission has rejected an attempt by Anheuser-Busch InBev to buy a controlling stake in a major distributor in Chicago.
The world's largest brewer and maker of Budweiser had wanted to buy the 70 percent stake it does not own in City Beverage, but the commission said in a ruling Wednesday that out-of-state entities cannot make such purchases.
Drink makers have been consolidating their use of distributors as a way to cut costs. Coca-Cola Co. and PepsiCo Inc. have been able to do it. But makers of alcoholic beverages face a hurdle because many states enforce a so-called three-tier system that prevents manufacturers from also controlling distribution or retail sales.
Anheuser-Busch InBev said in a statement it believes the law allows it to buy up the rest of the stake, and said it has been a distributor in the state for three decades and the commission has renewed its license. The company said the challenge to the license came at the last minute, and it disagrees with the interpretation of the law.
"A brewer holding a license is no threat to the three-tier system whatsoever, and any statement otherwise is simply a misunderstanding of the three-tier system," said Gary Rutledge, vice president, general counsel for Anheuser-Busch Cos. Inc., the St. Louis-based arm of the Belgian brewer.
The owner of City Beverage, Soave Enterprises, which is based in Detroit, did not immediately return requests seeking comment.
