05 Jun A Brewery Closing in New Hampshire Helps Illuminate Alcohol Law Differences Between States
Indiana has some interesting, to say the least, alcohol laws. One has recently been altered – Sunday package alcohol sales – but others are still waiting to be acted on. Things like cold beer sales only from liquor stores and producers, and even something as obscure as cideries and meaderies not being allowed to have guest taps of anything at their tasting rooms are issues that should really be addressed.
Indiana has been the target of much rhetoric and press concerning alcohol laws, but there was a recent story that rivals our fine state. This story takes place in New Hampshire, present day, where Four Pines Brewing is closing in order that owner Shane Pine will then be allowed to open a second restaurant. As reported in Secoastonline.com by Max Sullivan (link to the story here), Four Pines Brewing (named for Shane and the three Pine children) is/was a successful microbrewery in Hampton for the past two years.
Shane has owned a restaurant in Hampton called Community Oven for several years. When the Blue Lobster Brewing Company next door was put up for sale he purchased the equipment and leased the space and opened his own brewery – Four Pines. And this is where the state got involved.
New Hampshire’s interpretation of the three-tier system is more conservative than most other states, and more conservative than the federal law. The system was implemented after Prohibition to keep a small portion of the alcohol industry from having undue control on the production, distribution and sales of alcoholic beverages. Producers must sell their product in their own taprooms or brewpubs, or sell the product to a distributor, who then sells a range of products to retailers, including restaurants and liquor stores.
In order to sell Four Pines beer in Community Oven, Shane had to change his permit from a restaurant to a brewpub, otherwise he would technically be in two tiers, producer and retailer – so he got the brewpub license. Everything seemed OK until the opportunity to open another restaurant came up.
Recently, Shane had plans to open Shane’s Texas Pit, also in Hampton. The state again said that he would be violating the three-tier system, and this time he didn’t have the option apply for a brewpub permit because he won’t be making beer on premises. He transferred ownership of Shane’s Texas Pit to his daughter, but was told by the Alcohol Commission in the state that he still would not be allowed to have any input on the development or running of the restaurant.
Since Shane considers himself a restaurateur before a brewer, he has decided to put the brewery up for sale, even though it is a money-maker. It’s just a matter of New Hampshire’s interpretation of the three-tier laws. States usually follow the federal government in the permitting process, but each state does have room to maneuver within the law. For New Hampshire, they have chosen to be more conservative than the Federal Alcohol and Tobacco Tax & Trade Bureau (TTB).
In Indiana, the Alcohol & Tobacco Commission (ATC) has allowed owners of brewers to own restaurants away from their brewery/brewpub without determining that the three-tier system has been violated in such cases. Quaff On! Brewing owns several Big Woods restaurants (with more to come), and Upland’s Pumphouse in Columbus and their Tap House in Carmel are just a couple of other examples of breweries that own restaurants away from the brew houses.
I spoke with Lindsay Devlin at the ATC about how the three-tier system is implemented with respect to brewpubs, off-site taprooms, and second restaurants in Indiana. With a small brewer’s permit and production of less than 90,000 bbl/year, brewery owners are allowed to self-distribute up to 30,000 bbl/year, be the proprietor of a restaurant, and transfer beer in sealed containers or by direct line to that restaurant.
So this is how Indiana breweries can have additional taprooms and restaurants, like Three Wise Men/Scotty’s, Chapman’s, Books & Brews, or any of the dozen other Indiana breweries that have off site establishments. To get more insight on the difference between New Hampshire and Indiana in this respect, I talked to Scott Schaier of Brew NH, a great online resource for NH and East Coast craft beer news and information.
Scott was surprised to hear that Indiana breweries can own separate restaurants, as this is a bright line three-tier violation in the NH interpretation. In truth, I think Scott had heard about the Sunday sales cold beer issues in Indiana and thought that NH was fairly progressive as compared to Indiana. We each learned interesting things about the laws in the other state. For example, New Hampshire is still dealing with allowing nano-breweries and others to sell pints on site. In many cases, pint sales can only take place when a brewery also sells food. If they don’t sell food, then they can only sell 4oz. samples.
However, there was a NH bill that just signed into law that will allow nano-breweries to sell one sample per beer and two pints per person for consumption on premises, with a maximum of 48oz. per person. Without food, all taprooms are limited to one 4oz. sample of each different beer/person, but the nano-breweries have a special dispensation to sell pints without a full menu.
On the other hand, I learned about NH’s six year old law allowing for creation of nano-breweries for a very reasonable price. If limiting production to less than 2500 bbl/year, a person can license a nano-brewery for as little as $240! This one of the reasons that New Hampshire has a crazy ridiculous breweries per capita, 5.6 breweries/100,000 21+ residents, which ranks 9th in the country, even though they have only 58 breweries according to Brewers Association (ranks 30th).
I take the brewery number from BA with a grain of salt because they say Indiana has only 137 breweries, but I know the number is over 160 now. By way of comparison, Indiana ranks 16th in number of breweries, but only 21st in breweries per capita (2.8). Indiana makes more than twice as much craft beer as NH, but the average adult in New Hampshire (3.1 gal/person) drinks 2x the beer as in Indiana (1.5 gal/person). It’s those long, cold winters I’m guessing.
I guess every state has their crosses to bear, but both Indiana and New Hampshire are climbing the ranks of the craft beer pros. NH even won two GABF medals in 2017 and a gold at 2018 WBC (OK, Indiana won 10 at GABF and two golds at this WBC, but both are doing well). It was educational to talk to Scott, but perhaps a take home message is that when you talk about the archaic Indiana alcohol laws (and you do), remember that in some respects, others have it harder than we Hoosiers do.