STAND. COM. REP. NO. 247

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1002
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Transportation and Intergovernmental
Affairs, to which was referred S.B. No. 1002 entitled: 

     "A BILL FOR AN ACT RELATING TO LIQUOR LICENCES,"

begs leave to report as follows:

     The purpose of this measure is to permit wholesale dealer
liquor licensees to simultaneously have an interest in
manufacturer liquor licenses, and vice-versa, but to prohibit
them from having any interest in a retail liquor license.

     Testimony in support of this measure was received from
Anheuser Busch Companies, Anheuser Busch Sales of Hawaii, Inc.,
Hawaii Restaurant Association, and one individual.

     Testimony in opposition to this measure was received from
the Hawaii Teamsters and Allied Workers, Local 996.

     Testimony indicated that current law prohibits a
manufacturer liquor licensee to hold any interest in any other
liquor licensee.  The intent of this law, which is consistent
with federal law, is to prohibit trade practices which tend to
produce monopolistic control of retail liquor outlets, such as
arrangements for exclusive outlets, creation of tied houses,
commercial bribery, and sales on consignment or with privilege of
return.

     Anheuser-Busch, Inc., obtained wholesale liquor licenses
from the counties of Honolulu, Maui, Kauai, and Hawaii after

 
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purchasing a Hawaii liquor distributorship, Eagle Distributors.
Anheuser-Busch, Inc., also has interests in manufacturer liquor
licenses in other states.  However, the Maui Liquor Commission,
under its interpretation of current law adopted regulations
prohibiting a manufacturer liquor licensee from holding any
interest in any other liquor licensee whether located within or
outside the County of Maui.  Thus, the Maui Liquor Commission
imposed a sunset date on the liquor license issued to Anheuser-
Busch, Inc., which will prohibit it from doing business as a
wholesale dealer in the county of Maui in the year 2002.

     Your Committee believes that a liquor manufacturer should
not be prohibited from doing business as a wholesale dealer in
the State of Hawaii, or vice-versa, as these interests do not
create the same potential for monopolistic practices when those
licensees have interests in retail licenses.

     Your Committee has amended this measure by making a
technical, nonsubstantive amendments for purposes of style.

     As affirmed by the record of votes of the members of your
Committee on Transportation and Intergovernmental Affairs that is
attached to this report, your Committee is in accord with the
intent and purpose of S.B. No. 1002, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 1002, S.D. 1, and be referred to the Committee
on Judiciary.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Transportation
                                   and Intergovernmental Affairs,



                                   ______________________________
                                   CAL KAWAMOTO, Chair

 
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