22 Mar Indiana Craft Breweries Look to Protect Their Gains
I had the unique opportunity recently to attend the Indiana Craft Brewers Conference, put on by the Brewers of Indiana Guild for the benefit of the craft brewers of the state. For member breweries and non-members alike (heck- I bought a ticket), this is a great experience that 1) brings the brewing community together, 2) imparts important information about the state of the industry and the future trends, and 3) serves as a way to educate brewery personnel about companies that support the brewing industry in this state and details of the art of making and selling beer that will improve brewery performance in the marketplace.
I learned a lot while I was there, and met a lot of people from around the state. I took notes, and though much of it will never find it’s way into print, it helped me to better understand the challenges to, and accomplishments of, Indiana craft brewing. The guild should be proud of the work they are doing for all us craft beer fans around the state.
One thing I did hear at the conference both satisfied and alarmed me. For all the discussion on how archaic some of the Indiana alcohol laws are (and some of it is deserved), the fact is that Indiana craft beer has it pretty good, legislatively. There are many states in which craft brewers are hampered significantly, even in today’s environment.
The Guild’s executive board president Steve Lewellyn of Function Brewing in Bloomington noted that legislative efforts and lobbying Indiana have been fairly calm in the last couple of years, precisely because things are really pretty good here. True, a couple of issues are coming up in Statehouse business soon, like an omnibus bill that would increase the number of alcohol permits available, to shorten the time an alcohol permit is viable, and creating a “food hall” permits with a 3-way license with several sub-permits under it, but over all Indiana brewers are free to ply their trade.
Importantly, there seems to be a shift in Indiana brewing, away from looking for more rights and toward holding on to what we have gained in the past years. Legislative efforts in other states are looking to curb some brewer rights, and with the copy-cat issue always in play, we have to make sure that these limiting bills are either not introduced in Indiana or are defeated soundly.
A couple of examples were given at the conference, from both Steve and from Pete Johnson of Brewers Association who had come to talk to the attendees about national legislative issues. This made me want to look around for other stories on bills that might infringe on brewery function and sales. I found several current examples of state bills to restrict brewery rights from around the country:
Nebraska: A bill that would have raised the excise tax on alcohol by 353% was narrowly defeated, and may be brought up again. Yes, 353%, that was not a typo. Imagine what that would do to the price of a craft beer pint in Indiana.
Connecticut: A bill to limit breweries to either sales for on-site consumption or off-site consumption, but not both, was narrowly defeated. I have visited precious few breweries that only do off-site consumption sales, Georgetown Brewing in Seattle being the most recent. Most breweries that sell to go only do it to raise money for a taproom…..if a law like this had been passed in Indiana, we wouldn’t have Daredevil Brewing.
Colorado: An enacted law intended to help brewers by allowing them to use a home delivery company actually hurt them by requiring that for use of the program half the brewery’s sales had to come from a brick and mortar establishment. This is eerily similar to the Connecticut bill.
Montana: An effort to overturn the law requiring breweries to close their taprooms by 8pm died in committee. No brewery in Montana can serve a beer after eight, but bars are still open until 2am. Meanwhile, Montana is at the same time considering a bill that would raise alcohol permit prices by an unknown amount by changing the system from a lottery for permits of a certain price to an auction system. The paucity permits would only have one effect, to drive auction prices up.
Michigan: A new law in Michigan works to limit the ability of craft breweries to open satellite taprooms by requiring minimum production limits for having a second site. This includes mandating at least a 3 bbl system on site at each tasting room or production of at least 50% of the total output of the brewery at that site. This mimics a law that has been on the books in California for a while, speaking to that copy-cat aspect I spoke of above. Also, the Michigan legislature has created a new tasting room license that would have to be obtained before opening that second taproom.
Texas: This state has two bills pending. One that would require breweries to install flow meters on every one of their tanks so that volumes would be recorded. The liquor lobby feels that brewers are shorting the state on taxes based on how many barrels are produced, and this would be a way to ensure proper volumes were marked and tax paid. It is unlikely that brewers are messing around with their taxes, just based on what they have to lose, but more than that, buying and installing the meters would cost thousands of dollars for even the smaller breweries. It’s not like the state is going to give them flow meters.
A second bill in Texas is being opposed by the wholesalers lobby. The proposal has been put forth to allow all craft brewers to sell beer to go from their taprooms. As of now there is an upper limit on the barrel production for being allowed to go sales, so the argument is now about how many additional breweries would be allowed to sell under the new bill. The wholesale lobby says the laws in Texas aren’t broken, so they shouldn’t be messed with (Texas, get it?… don’t mess with it).
Of course, there have been a few bright spots. For instance, an amendment to double the limits on branded glassware to bars and restaurants that could be given away by a brewery within a year was tabled. This legislation would have allowed different AB-InBev houses to each give that amount, while capping the number of cases a retailer could except. This would have allowed the AB-InBev distributors to flood the market and squeeze out the glassware of the smaller breweries. This was a win for the craft beer lobbying effort in Ohio: unfortunately, a similar has already passed in Florida.
West Virginia eased restrictions on alcohol sales via a vote this month and Mississippi is considering a bill that would make it legal for craft beer stores to serve draft beer. Do you get the idea now about how good we have it in Indiana…. Or at least how much worse it could be? Liquor and wholesale lobbies keep track of these bills and look to introduce similar legislation in their own states. The price for what we have is vigilance, to make sure that Indiana is proactive in fighting these efforts and protecting what we have. Thanks go to the Brewers of Indiana Guild and their lobbying firm (Bose Public Affairs Group).
banner image credit: West Virginia Public Broadcasting