BEER AND ANTITRUST Wholesalers and brewers want to make it easier to control distribution of certain brands.
By Anna Cifelli Isgro

(FORTUNE Magazine) – A BRAWL IS BREWING in the Senate as beer wholesalers once again roll out a bill making it easier for them to get exclusive distribution rights within their territories. Soft-drink bottlers got just such a bill in 1980, but the beer lobby struck out until this fall, when the infelicitously named Malt Beverage Interbrand Competition Act finally cleared the Senate Judiciary Committee. Though the bill would preserve the right to sue for antitrust violations such as pricefixing, pugnacious opponents claim the beer industry's approach will raise beer prices. The 2,000-member National Beer Wholesalers Association and the 140-member U.S. Brewers Association argue that the beer bill is needed to clarify antitrust law. Indiana is the only state that forbids exclusive distribution contracts, and 27 states require brewers and beer distributors to sign them. A 1977 Supreme Court decision ruled that such exclusive agreements can be legal if it can be proved, case by case, that the contracts don't hamper competition. Brewers and distributors say the court ruling has spawned lawsuits by inviting wholesalers and retailers to challenge competitors' exclusive distribution contracts. Until the law is clarified by legislative action, says Richard Thornburg, a lobbyist for the beer wholesalers, ''we have the sword of Damocles hanging over our heads.'' Opponents include Federal Trade Commission officials, who say exclusive contracts invite monopolistic practices, and South Carolina Republican Strom Thurmond. On this issue Thurmond, chairman of the Senate Judiciary Committee, finds himself lined up with unlikely allies: liberal Ohio Democrat Howard Metzenbaum and consumer groups. They charge that exempting the beer industry from antitrust laws would reduce competition and lead to higher prices. Anheuser-Busch and Miller Brewing set up exclusive agreements with their New York distributors in 1983. A study conducted by the New York City Department of Consumer Affairs showed that beer prices in New York City rose 30% in the first nine months of that year. The consumer price index rose just 3.7% in the same period. Last year backers of a beer bill tried to attach it to an appropriations bill, but the ploy failed. Arizona Senator Dennis DeConcini, a Democrat, says he and his co-sponsor, Senator Barry Goldwater (R-Arizona), may try the same tactic this time. The wholesalers have hired DeConcini's former legislative aide, Romano Romani, to help Thornburg lobby for the bill. If it dies again, the beer forces promise to keep trying. Says Thornburg: ''We want this bill.'' Such persistence poses a special problem for opponents. Asks a legislative aide: ''How do you unify a bunch of beer drinkers?''