Indiana Governor Signs Bill Raising Brewery Production Limit


Indiana Gov. Mike Pence has signed into law a bill that triples the production cap on beer that breweries are allowed to sell within the state while preserving other retail and self-distribution privileges.

As enacted, Senate Bill 297 lifts the cap from 30,000 barrels to 90,000 barrels. Prior to the bill’s passage, brewers could sell more than 30,000 barrels in the state. Crossing that threshold, however, would have required they forfeit the rights to self-distribute and operate taprooms, an encroachment a number of small brewers claimed threatened to stifle growth.

The new bill does provide a protective wrinkle for wholesalers in that it caps self-distribution for breweries at 30,000 barrels.

The production cap issue came to prominence toward the end of 2014 when

Indianapolis-based Sun King Brewing, one of the state’s largest craft brewers, severed ties with its three in-state wholesalers so as to avoid exceeding the 30,000 barrel limit.

Sun King founder Clay Robinson told Brewbound that in light of the bill’s passage, the company now hopes to reconnect with those distributors and make beer available statewide once again later this year.

“It’s hard to set an official timeframe as we are gearing up for summer and need to make sure we have enough beer for our current distribution footprint before we expand out any,” he wrote in an email to Brewbound. “I’m hopeful we will be in a position to start re-opening markets later this summer and launch new ones to complete our statewide footprint this fall.”

Sun King has also announced it will open a taproom as well as a larger scale production facility in nearby Fishers, plans for which had been on hold pending this legislative change.

Shortly after Sun King cut ties with its three wholesaler partners, the brewery announced it had teamed up with 3 Floyds Brewing, a similarly sized company headquartered in Munster, to launch the Support Indiana Brewers campaign to raise awareness of the issue. Robinson said more than 3,000 people reached out to state legislators to promote legislative change.

This is the second time in the last five years the production cap has been increased. In 2011, lawmakers lifted the cap to 30,000 barrels up from 20,000.

Gov. Pence also signed House Bill 1053 this legislative session, which rules that a person who holds a farm winery permit and a brewery permit may sell by the glass both its beer and wine on premise.