COLUMBUS, Ohio — Ohio’s craft beer industry has been expanding rapidly over the past few years.

This growth has been challenging for some small breweries who are struggling under the weight of a statewide franchise law. In response, an Ohio senator is pushing for an exemption in the law for these local craft breweries.

What You Need To Know

• Some small breweries say the franchise law has made it difficult to maintain their daily functions


• Jim Gokenbach, who is the managing partner at Zaftig Brewing Company, said he cannot break his contract with his distributor because of the "Alcoholic Beverages Franchise Act"

• He said, the new proposal will help him create a fair playing-field with his beer distributor

• Gokenbach says they have lost sales, and that has left him frustrated

Jim Gokenbach is the managing partner at Zaftig Brewing Company in Franklin County. He is a local brewer who has faced significant hurdles because of the current law. In 2016, hoping to grow his business statewide, Gokenbach entered a contract with a beer distributor.

However, the deal failed to meet his expectations, and he soon found himself unable to end the agreement because of the state’s ‘Alcoholic Beverages Franchise Act.’ This law stipulates that contracts can only be broken if a “just cause” is provided for the termination, or if one party enters bankruptcy.

“Unfortunately, there’s nothing in the contract that obligates them to sell your beer,” Gokenbach said. “You’re essentially entering a business relationship with someone who promises to sell your beer, but can just as easily choose not to. In such cases, we’re left powerless.”

The franchise act was originally put in place during the 1970s. This law was intended to protect small distributors. However, faced with Ohio’s recent brewery boom, Gokenbach asserts that the legislation is now outdated, placing breweries in a tough spot where they are obligated to buy back beer that their distributors fail to sell.

“Our distributor sales are down 54%, while our sales here in Franklin County have risen by 24%,” Gokenbach said.

State Senator Andrew Brenner has recognized the problem in Ohio and is seeking to pass “The Ohio Craft Brewer Freedom Act.” The proposal would exempt small craft breweries from the state’s franchise law. If passed, breweries like Zaftig Brewing Company could negotiate their distribution contracts with wholesale partners, free from state intervention.

Senator Brenner emphasized the importance of his proposal, stating, “Without this change, small breweries are essentially locked into a delivery service contract until a court decides to break the agreement. This process can take well over a year, during which the brewery remains dependent on the same distributor for delivery services.”

 Senator Brenner’s proposal is a beacon of hope for brewers like Gokenbach. 

“This new bill could grant us the freedom to expand and make things fair for us in this business,” Gokenbach said. 

While the path forward may still be long, these proposed changes highlight a growing recognition of the unique challenges faced by small breweries, marking a possible new chapter in the ongoing story of Ohio’s craft beer industry.

The proposal has not been assigned to a committee yet.