CHICAGO—The Illinois Liquor Control Commission blocked a bid by Anheuser-Busch InBev NV's U.S. division to buy a controlling stake in its largest Chicago-area beer distributor, in a blow to the brewer's efforts to compete more effectively in one of the country's major beer markets.

The commission's ruling Wednesday also hints at the regulatory hurdles the world's largest brewer could face if it embarks on a wider effort to control more of its U.S. distribution, a strategy some analysts expect the company to pursue.

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