Sun King Splits with Wholesalers, Makes Push for Legislative Change

sun-king-brewingSun King Brewing has severed relationships with three wholesalers outside of Central Indiana, cutting back to Indianapolis and Bloomington from a footprint that had spread across the state.

The decision to pull out from those territories stems from a state law that caps production for small brewers at 30,000 barrels per year, a figure Sun King projects to brush against this year, according to founder Clay Robinson.

“If the limit is 30, we’ll do 29,999,” he said

The law states that breweries that exceed the 30,000-barrel threshold cannot self-distribute or operate on-site tasting rooms, two components that Robinson says are critical to the brewery’s success in its home market. The law also prohibits companies producing more than 30,000 barrels from running a restaurant.

Now, the brewery is lobbying for change and hopes to double the cap to 60,000 barrels, which would match the federal small brewer limit, during the next legislative session. Robinson also serves as president of the Brewers of Indiana Guild, which has put the issue on its legislative agenda for 2015.

“It’s one of our top legislative issues,” he said. “While it only affects a few of us now, as craft beer grows, it’ll continue to affect more people.”

Indiana breweries that surpass 30,000 barrels could sell beer out of state and not have it count against their production, but Robinson said he has no desire to do so, adding he hopes to emulate the New Glarus model, which is predicated on never selling outside of its home state.

Sun King has teamed up with 3 Floyds of Munster to propel the issue, said Robinson, and the pair is currently in the process of developing a campaign to raise public awareness and contact legislators.

Part of that campaign, said Robinson, will be a collaboration beer brewed by the two companies set to be released around the time Indiana lawmakers return in January.

Should the effort prove successful, it would be the second time in four years the state lifted the ceiling, as lawmakers last increased the production limit in 2011 from 20,000 to 30,000 barrels, as reported by WISHTV.

Barnaby Struve, vice-president of 3 Floyds, could not be immediately reached for comment, but his company has been at the forefront of this issue in the past.

“We would be given two options,” he told in 2012, explaining how the limit impacted his business. “One would be to continue to grow and close our pub. The other would be to stay at 20,000 barrels and keep our pub. So as a stopgap measure they (the Legislation) increased that to 30,000.”

While they’ll push for 60,000 this time around, Omar Robinson, Sun King president, said that he’d do away with the cap altogether.

“Quite honestly, I think they ought to make the thing unlimited, why not?” he said. “The smoke and mirrors people use, that this will destroy the three-tier system — there’s 20 states that have no limit and the three-tier system is alive and well.”

The distributors Sun King cut ties with were Indiana Beverage, North Vernon Beverage, and Monarch Beverage World Class. Repeated calls to Indiana Beverage were not returned while a manager at North Vernon declined to comment.

John Xenos, general manager at Monarch, said he was disappointed in the brewery’s decision, but understood the reasoning.

“Selfishly we hate it, but we completely understand the move they made,” he said. “I was really disappointed when we heard the news, but again, that’s selfish interest. It didn’t take me long to understand they aren’t doing it because they want to, they’re doing it because they don’t have any choice given the current definition of a small brewer.”

Asked whether the Indiana Beer Wholesalers Association, of which Monarch is a member, is in favor of legislative change, Xenos deferred to CEO Phil Terry, who could not be immediately reached for comment.

Sun King is also altering its plans to build out a new brewery and tasting room in Fishers, about half an hour north of its current Indianapolis headquarters.

The brewery had originally planned to build a larger scale production facility, but will table that idea for now in favor of first building a smaller 10-barrel brewery capable of producing up to 5,000 barrels and a taproom. The larger component, Robinson said, will be on hold until there is a change in law.

“I don’t think it’s unreasonable for us to ask for what we’re asking for,” he said. “We’re trying to continue to grow our business and our goal is to be an Indiana business.”