Michigan-based Bell’s Brewery Inc. has stopped shipping its beers to the entire Virginia market as part of an unresolved distribution dispute with the nation’s largest beer distributor.
Bell’s Brewery ceased shipment of its beers — including the popular Hopslam, Two Hearted Ale and Oberon Ale — to the Richmond-area market in December as it attempts to get out of its contract with Premium Distributors of Virginia.
When Premium Distributors of Virginia acquired Henrico County-based Loveland Distributing Co. in December, it also acquired Loveland’s distribution territory and its regional distribution contracts with such brands as Coors, Corona, Guinness, Miller and more than 25 craft beers, including Bell’s. Premium Distributors of Virginia is a division of the nation’s largest beer distributor, Illinois-based Reyes Holdings.
On Feb. 1, Bell’s announced it would stop shipping its beer to the entire state, regardless of the distributor or its parent company.
“Because of the laws in the state of Virginia, if I stayed in the market, we see a significant risk to our business,” said Larry Bell, founder and president of Bell’s Brewery.
Bell’s Brewery is the 16th-largest brewery in the country and the seventh-largest craft brewery.
Bell said the brewery will fulfill existing orders in its Virginia markets with its other distributors — such as Blue Ridge Distributing, which serves the western part of the state, and Hop & Wine, which serves the Northern Virginia market. Therefore, he said, it may be a while before Virginians outside of the Richmond region start to notice the dwindling supply of Bell’s products.
“It’s painful,” Bell said. “It’s really, really unfortunate and a hard decision — and one I wish we just didn’t have to take.”
The return of Bell’s to the Virginia market is contingent on the resolution of a complaint filed by Loveland and Premium Distributors with the Virginia Alcoholic Beverage Control Authority.
In its complaint, a copy of which was obtained by the Richmond Times-Dispatch, Loveland and Premium argue that Bell’s is in violation of the Virginia Beer Franchise Act and has failed to “present ‘good cause’ for its termination of the distributor agreement,” a requirement of the act.
Update: A hearing before Virginia ABC is scheduled for March 1.