Legislative Roundup: Alabama, Maine Debate Direct Sales; Oklahoma Lawmaker Proposes Branch Divestiture

Alabama state capitol

Alabama Senate Reviewing Direct Sales Bill

Small brewers in Alabama have cleared the first major hurdle in their quest to sell beer directly to consumers. Earlier this month, congressional leaders voted 68-17 (with 15 abstentions) to pass HB 176 and the proposed legislation is in the Senate.

The Alabama Senate Fiscal Responsibility and Economic Development committee, which oversees the expansion and development of local industries and businesses, began reviewing the bill last week.

According to a March 9 tweet from Alabama Brewers Guild executive director Dan Roberts, HB 176 was given a “favorable report” by the Senate committee and is “one Senate vote away from being sent to the Governor.”

HB 176 was introduced following nine months of research conducted by the Alabama Alcohol Study Commission (AASC), which was formed last year by lawmakers to examine the state’s alcohol regulations. After reviewing laws in other states’ and consulting with brewers, wholesalers and retailers, the AASC suggested a list of changes including the allowance of limited direct-to-consumer sales at breweries.

The proposed legislation was drafted by the Alabama Law Institute in January, just before the state began its 2016 legislative session.

Efforts to pass similar direct-sales reform in Georgia and Mississippi have already failed this year, leaving small brewers in those states unable to tap into an increasingly more popular sales avenue and an important source of revenue.

“In the Deep South it’s kind of hard to get anything done; interests are very entrenched,” Roberts told Brewbound in January.

Maine Brewpubs Denied Off-Premise Sales

An attempt to expand direct-sales privileges for beer makers in Maine was shot down by legislators this month. State senators voted 17-16 against an amendment that would have allowed brewpubs to also sell packaged beers to-go, without having to build a separate space for those transactions.

Maine brewery licenses holders can already sell their packaged products directly to customers for consumption on or off the premises, as long as they don’t also have a liquor license and sell other alcohol manufacturers’ products.

Brewpubs, however, are only allowed to sell growlers — refillable glass containers — of their beer to-go and must currently have a separate room and entrance for the area where six-packs and other canned and bottled packaged beers are sold.

Maine Brewers Guild Logo

“Simply put, this bill will allow those brewers who also hold a restaurant liquor license to no longer have to have a wall in between where they sell beer and food for on-premises consumption, and where they sell their beer for consumers to take home,” Sean Sullivan, executive director of the Maine Brewers Guild, wrote in a letter to state legislators.

Legal Document 1462 would have amended retail licenses, obtained by any alcohol manufacturer in the state, to also permit off-premise sales under the same roof.

The amendment received bipartisan support and opposition: lawmakers in favor argued that the change would encourage small business and level the playing field for brewpubs. Opponents, however, suggested it would put other bars at a disadvantage.

“I know there is lots of rhetoric and we are going to have more of it in 2016 about who is more business friendly, who wants less regulation,” senator Justin Alfond (D-Portland), who voted in favor of the change, told the Bangor Daily News. “Well, folks, here’s an opportunity for us to all join together as one.”

Fellow democratic senator John Patrick (D-Rumford) opposed the amendment, and argued that it was not as “business friendly” as his counterpart may have suggested. In his mind the change would have unfairly given brewery-restaurants a privilege not afforded to other bars in the state.

“What if I go to a restaurant, why can’t I take out a 12-pack from there or a 30-pack after I’ve had a nice meal and either a glass of wine or a craft brew that happened to be from a local brewery?” Patrick said.

Oklahoma Looks to Update Three-Tier System Laws

Oklahoma residents could be deciding the future of their state’s three-tier system this November.

State senators passed a joint resolution this month that suggested sweeping changes to way alcoholic beverages are distributed and sold throughout the state.

Senate Joint Resolution 68 (SJR68) would give small brewers operating in the state limited self-distribution privileges, but it would prohibit a business from having “common ownership” of a manufacturer, wholesaler or retail outlet.

SJR68 is currently being reviewed by the House and, if passed, would move to a statewide vote during the upcoming election cycle this fall.

Anheuser-Busch InBev, which operates a pair of wholly-owned distributors in the state, had publicly attacked the resolution and its sponsor, Senator Clark Jolley (R-Edmond), when it was first introduced in February.

AB InBev Oklahoma #StopClark

According to the Southwest Times Record, ABI launched a multimedia campaign to kill SJR68 — purchasing television spots and taking out a full page advertisements in local newspapers using the social tag, #StopClark.

The Oklahoma Retail Liquor Association joined A-B’s fight against SJR68 due to a provision that would allow broader access to liquor licences for retailers in the state. Supermarkets, warehouse clubs, convenience stores, and virtually any other outlet would be able to apply for beer retail licenses under the new law.

ABI changed its position, however, after senator Jolley amended the act to allow the company to continue its wholesale operations until separate legislation is passed requiring breweries to divest their wholesale branches within three years — effectively putting off the issue for legislators to revisit at a later date.

Missouri State Reps Consider Cold Beer Bill

Budweiser Craft Cooler

Missouri state senators voted in favor of a new bill this month that would allow breweries to lease coolers to retailers, a law some legislators and smaller brewers in the state believe would give larger beer companies an unfair advantage.

In addition to the equipment-leasing provision, the bill would also give Missouri retailers the right to fill and sell growlers — between 32 oz. and 128 oz. of packaged draft beer per customer — for off premise consumption.

The state senate passed Senate Bill 919 following a close 18 – 14 vote. The bill moved to the house for its next round of reviews.

If passed, the proposed legislation would grant breweries and wholesalers the right to lease and install coolers at off-premise retail locations. Beer companies would be able to install one cooler, up to 40 cubic feet in size, per retailer and “lease” the equipment to stores at a low cost.

As you’d expect, the bill has stirred some controversy: while proponents have touted the act as a means to give consumers broader access to cold beer, those against the allowance have said it would give larger and resourced breweries an edge over smaller craft producers.

“We are basically giving Goliath more weapons to fight David,” Jeff Schrag, president of the Missouri Small Brewers Guild and founder of Mother’s Brewing Company, told CBS St. Louis. “Goliath doesn’t need more weapons.

SB 919 has already gone through two out of three rounds of review in the House without amendment. Representatives have until May 13 to pass the bill before the end of Missouri’s regular session.

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