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Beer distributor challenges Indiana liquor laws

INDIANAPOLIS – Indiana liquor laws that date from the days of Prohibition are facing a challenge from the state's largest beer distributor, which argues it should be able to supply liquor to bars, restaurants and stores.

Monarch Beverage Co. has filed suit against the Indiana Alcohol and Tobacco Commission, alleging a state law that prohibits alcohol wholesalers from supplying both beer and liquor violates the U.S. Constitution.

Monarch officials say that after Prohibition, state politicians doled out licenses for liquor, and county officials handled those for beer. Alcohol wholesaling has remained separate since.

"The General Assembly has never provided an official explanation for why it chose to prohibit beer wholesalers from holding a liquor permit," Monarch argues in its suit. "The available evidence, however, suggests that this restriction was enacted to further a post-Prohibition patronage system that operated to the benefit of state and local politicians."

The Indianapolis Business Journal reports (http://bit.ly/JE4YPk ) the lawsuit is the latest challenge to Indiana's alcohol laws, which lawmakers have been reluctant to change.

Grocery and convenience stores wanting to sell cold beer have raised a similar challenge, arguing that the law governing cold-beer sales violates the 14th Amendment by favoring "one class of retail over another."

Monarch has tried the last four legislative sessions to advance a bill supporting its position, without success. Ed Feigenbaum, publisher of Indiana Legislative Insight, said that isn't likely to change next year.

"In the short session, it's probably unlikely, particularly with a lawsuit pending," he said.

Liquor distributors say a change to the laws would allow Monarch to create a monopoly.

Marc Carmichael, president of the Indiana Beverage Alliance, notes that Monarch already is the sole distributor of Miller and Coors products in 69 of Indiana's 92 counties. It reaches the entire state when the wine and craft beers that it distributes are factored in, he said.

"It's a zero-sum game for the Legislature to make a change that dramatic because all it would do is shift business from some wholesalers to Monarch," Carmichael said.

Monarch's dominance stems in part from a decision by Miller about a decade ago to begin distributing its beer through larger suppliers. Monarch benefited from its central location and quick access to interstates.

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

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