Idaho Wholesalers Seek to Clarify Small Brewer Retail Exemption

10 barrelBeer wholesalers in Idaho are asking the state’s Alcohol Beverage Control Bureau to clarify a law enabling small brewers to operate as both producers and retailers with multiple locations.

As written, Idaho law permits breweries that produce fewer than 30,000 barrels per year to manage retail fronts and brewpubs.

Now, in response to Anheuser-Busch InBev’s recent acquisition of Oregon’s 10 Barrel Brewing, which also operates a brewpub in Boise, Idaho, distributors in the state are questioning whether 10 Barrel qualifies for a small brewer exemption. As noted by Alcohol Law Review — a discussion board moderated by National Beer Wholesalers Association senior vice president, Paul Pisano — both 10 Barrel and A-B InBev (the world’s largest beer manufacturer) will exceed the 30,000 barrel production cap in 2014.

The petition for ruling, as filed by Risch Pisca, PLLC, the counsel of record for the Idaho Beer and Wine Distributors Association (IBWD), seeks to affirm that because both 10 Barrel and A-B InBev produce in excess of 30,000 barrels, neither can legally hold a retail, wholesale, or brewpub license in the state. Considering the bulk of both 10 Barrel and A-B InBev’s production comes from out of state, the petition also seeks to confirm that the “location of production of said volumes of beer is immaterial to the exemptions and allowances” afforded by the statute.

In other words, Idaho beer wholesalers want to clarify how the state counts production volumes. By operating a brewpub in Idaho, the petition claims, companies operating similarly to A-B InBev and 10 Barrel would be flouting state law in a manner that threatens to “collapse the three-tier system.”

Jeremy Pisca, who serves as executive director of IBWD and is a partner with Risch Pisca, could not be immediately reached for further comment.

The original intent of the legislation, according to the petition for ruling, though, was to “allow small brewers that lacked economic means or a history of production the ability to get to market, and eventually require those brewers to enter into the traditional three-tier regulatory structure.”

In a statement issued to Brewbound, Andy Goeler, A-B InBev’s CEO of craft and specialty, said brewpub sales of 10 Barrel beer in Idaho will continue as usual.

“State law in Idaho allows for brewpub ownership and we look forward to providing the service and offerings 10 Barrel brewpub guests expect,” he said.

A spokeswoman with the Idaho State Police Department, which runs the state’s Alcohol Beverage Control Bureau, declined to comment on a potential outcome or what a declaratory ruling might mean for 10 Barrel or A-B InBev as the case is pending.

She did confirm, however, that the department has received the petition, as well as a transfer application for the liquor and brewery license from 10 Barrel’s Idaho outpost to add new members to their LLC, including A-B InBev.

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