Minnesota is the only state in the U.S. with the Coleman Act, which requires spirits produced outside of Minnesota to be sold to all distributors in the state. Spirits produced in Minnesota are allowed to have exclusive contracts with just one wholesaler.
The Senate Commerce Committee considered a bill this week that eliminates the difference between out-of-state vs. in-state spirits and requires any spirits sold in the state, regardless of where produced, to sell their product to all wholesalers in Minnesota – called “open wholesaling.” Under the changes in this bill, no spirit producer or manufacturer would be allowed to pursue exclusive contracts with wholesalers.
The Commerce Committee heard testimony from more than a dozen distributors, liquor store owners, and restaurant owners that have differing opinions on the change. Supporters argue that open wholesaling has worked for more than 40 years to ensure competitive pricing for businesses and consumers, and it allows smaller operations to compete with big-box liquor stores and restaurants. They believe the language in this bill merely expands the intent of current law to all liquor producers, regardless of location.
Opponents argue that Minnesota is the only state with this type of law and there has been no evidence of lack of competition in the other 49 states. They also say that the Coleman Act is a government mandate that interferes with the free market. In their opinion, manufacturers should be allowed to contract with distributors that best serve their business interests.
The bill was passed to General Orders where it could see a full Senate vote this session. (SF 3008)
