A dispute between two Northwest Indiana convenience store chains and their Coca-Cola distributor could lead to a change in how nonalcoholic beverages are distributed and sold across the Hoosier State.
State Rep. Ed Soliday, R-Valparaiso, said he filed House Bill 1221 after being contacted by the owners of Family Express and Luke Oil about the different prices they're required to pay for Coca-Cola products at different business enterprises run by their companies — based largely on the price ultimately charged to the consumer.
For example, Soliday said Luke's County Line Orchard pays about one-third as much for the exact same product from exact the same distributor than Luke Oil convenience stories, even though the product all is delivered to the same warehouse.
He said the distributor also has thwarted attempts to move beverages between businesses or acquire product through other channels.
"These companies have bought from Costco, retail, for less than they're paying wholesale, and these are people who buy by the truckload. And the (distributor) has gone to Costco and said, 'If you sell to them again we won't sell any to you,'" Soliday said. "This just isn't right."
Soliday's legislation would prohibit distributors of nonalcoholic beverages from granting a price, discount, allowance or service charge that is not equally available to all retailers of the product, similar to the process currently employed in Indiana's alcoholic beverage industry.
The measure also empowers the attorney general's office to investigate and prosecute allegations of beverage distributors favoring one retailer over another.
"In the nonalcoholic beverage industry we're down to just a few players and they have enormous market leverage," Soliday said. "I will tell you there is no free market when there is a monopoly."
Joe Smith, representing the Hoosier Beverage Alliance industry trade group, insisted the General Assembly is the wrong forum for resolving a business dispute.
He said it should be taken care of in the board room, or, failing that, in the court room.
"The free market is working," Smith said. "It's a couple of people in Northwest Indiana that have issues."
The Republican-controlled House Committee on Commerce, Small Business and Economic Development agreed 8 to 4 Tuesday to advance the measure to the full chamber for further review.
State Rep. Jim Pressel, R-Rolling Prairie, was among those reluctantly voting to keep the legislation alive for the time being.
"Should the General Assembly weigh-in on every dispute that comes along?" Pressel asked.
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