Indiana's largest beer distributor ramping up new challenge to enter hard liquor business

IndustriesAssociated Press

An Indiana beer distributor with a long history of challenging the state's alcohol laws is bracing for another court battle over its quest to enter the hard liquor business.

Indianapolis-based Monarch Beverage Co., the state's largest beer distributor, has filed documents seeking a liquor wholesaler's permit for a separate corporate entity. The state Alcohol and Tobacco Commission has already notified the company it intends to deny the request, the Indianapolis Business Journal reported (http://bit.ly/1uswCkp ).

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Monarch officials accuse the commission of letting politics influence its decisions and the agency's chairman of prejudice against the company. CEO Phil Terry said the company expects to file a court challenge if its permit is denied.

Indiana law prohibits alcohol distributors from handling both beer and liquor. Under the state's system, ownership of manufacturers, wholesalers and retailers is to remain separate.

Monarch maintains the alcohol commission has previously granted separate permits to businesses with common ownership, such as giving a restaurant permit to an entity with the same ownership as Simmons Winery in Columbus.

Terry said only politics is holding back approval of Monarch's request for its entity, Spirited Sales LLC.

"Part of our complaint is that our applications in the past have been denied not because they're not appropriate but simply because our competitors have objected to them," Terry said. "Our legal position is that is not an appropriate standard for granting or denying an application."

Alcohol commission Chairman Alex Huskey has recused himself from Monarch's request, but didn't give an explanation. The agency said it could not comment on a pending case.

Wine and Spirits Distributors of Indiana, which consists of four multistate firms operating in Indiana, said Monarch's request could lead to it becoming Indiana's dominant liquor distributor.

That's because its beer business with MillerCoors is practically guaranteed under Indiana law, while the liquor distributors could lose supply contracts at any time for any reason, said Jim Purucker, executive director of Wine and Spirits Distributors of Indiana. Monarch could leverage its beer business to expand into liquor, he said.

Terry said the Indiana law is unfair to his company and that beer and liquor are distributed by the same wholesalers in other states.

Bart Herriman, general counsel for the Wine and Spirits Distributors, said Indiana's alcohol commission has been clear in dealing with wholesalers.

"You can't sell (both) beer and liquor, whether you set up a separate company or you don't," he said.

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Information from: Indianapolis Business Journal, http://www.ibj.com