Craft has experienced eight straight years of double-digit dollar sales growth, breweries are opening at a rate of more than one per day and waves of new SKUs are washing over retail shelves and flowing through tap lines.
But at the state level, there are a number of chinks in the armor that need welding before craft brewers are all on equal ground.
We’re talking, of course, about an abundance of legislative issues that craft brewers face in states like Idaho, Florida and Maryland, to name a few. Lawmakers are trying to catch up with a fast-growing industry to better understand the complexities of sampling opportunities, on-premise sales and franchise laws. In some case, legislators have lifted antiquated regulations and written new rules but in others, they’ve chosen to uphold the status quo and even tightened some restrictions.
So let’s start our legislative tour in Idaho, where earlier this month the House of Representatives passed (by a wide margin) a measure — HB 524 — preventing breweries from owning any interests in beer wholesaling or retailing businesses.
The bill also prevents retailers and distributors from owning any stake in breweries, which effectively prevents “tier one from buying up tier two,” said Rep. John Vander, a proponent of the bill.
“If we don’t prevent that sort of thing, then tier one may eventually buy up all of tier two and maybe even tier three,” he told the Idaho Reporter.
In laying out his opposition to the bill, Rep. Ken Ardus said a brewery (he cited Anheuser-Busch) might be able to help out a struggling distributor with a financial investment that “could save the distributor and save jobs.”
That bill is now in the Senate.
Meanwhile, a similar bill in Mississippi — SB 2590 — that sought to keep retailers from investing in wholesalers and beer manufacturers died in committee.
But three-tier dynamics aren’t the only legislative discussions concerning Idaho’s craft business.
A bill headed to the House State Affairs Committee seeks to give Idaho’s breweries the go-ahead on holding beer tastings on-premise.
Brewers are currently prohibited from serving samples. If passed, though, the bill — which the Associated Press described as “almost identical” to the state’s rule on wine tastings — would make it legal for brewers to offer up to an ounce and a half of beer for on-premise consumption. The Idaho Beer and Wine Distributors Association, has voiced its “100 percent” support of the bill, according to the AP.
The issue of beer sampling has been met with opposition elsewhere, as in Georgia, where a Senate panel recently tabled a bill that would have allowed package stores to provide on-premise beer and wine samples to shoppers.
In Florida, brewers fear that legislative changes will alter their ability to sell pints on-premise. State Rep. Ray Rodrigues has introduced a bill that would prevent new breweries from opening tasting rooms and selling beer from their own taps.
Breweries with existing tasting rooms would be grandfathered in, however, and thus continue operating as they have been.
The bill, said Rodrigues, preserves the three-tier system.
“[Brewers] really need to make a decision. Do they want to be a manufacturer? And if so, their money should come from the beer they make,” Rodrigues told Florida’s ABC affiliate.
Fort Myers Brewing Co. is one of the breweries grandfathered in, but co-owner Jenn Whyte said the bill inhibits future growth, as the tasting room is instrumental to its business.
“We could never expand or move. We wouldn’t have a tasting room,” Whyte told ABC. “If we didn’t have a tasting room, three of our employees would be gone immediately.”
In Maryland, the Senate recently voted down one bill being backed by the Brewers Association of Maryland, while voting through another, albeit with drastic cuts.
According to the Baltimore Sun, it voted against a bill “that would have increased the amount of beer the holder of a brewpub license could produce.”
The Education, Health, and Environmental Affairs Committee approved the other bill, though, which allows microbreweries to offer samples and sell their brews at farmer’s markets. That bill only extends to those that produce fewer than 3,000 barrels annually, however, leaving a number of breweries out in the cold.
The bill is now on its way to the House.
Finally, having now passed both legislative chambers in West Virginia, HB 4549 strengthens franchise rights for distributors and permits the state’s Alcohol Beverage Control Commissioner the power to “investigate, review and approve or deny franchise agreements, labels, brands and line extensions.”
Thirsty for more? The Brewers Association keeps a regularly updated monthly legal brief on its website.