Yet Another New Beer Sales/Distribution Bill in MN

An already-interesting year for Minnesota beer just got a little more interesting.

We’ve already got Sunday sales bill (not restricted to beer) and the “Surly Bill” going before the state legislature. Now a new beer bill has made its way to the capitol. S.F. No. 1013 proposes changes to the brewpub license.

Currently brewpubs are allowed to hold a retail license (meaning they can offer a full bar) and to sell draft beer manufactured on the premises for on-site consumption. They are also allowed to sell their own beer in growlers for off-site consumption and to sell their own beer at other retail outlets owned by the same entity (i.e. Town Hall and Town Hall Tap). Brewpubs have an annual production cap of 3500 barrels and are not allowed to sell beer to distributors for the retail market. They cannot sell beer for off-site consumption in any form but growlers.

The changes proposed in this new bill would eliminate the 3500 barrel limit for brewpubs and allow brewpubs to sell beer to wholesalers for distribution to the retail market. In other words, you could be able to get beer from Town Hall, Fitgers, Herkimer, or any other Minnesota brewpub at your favorite liquor store or beer bar. Some other states allow brewpubs to sell beer to distributors, including California, Utah, Wisconsin, Oregon, and New Mexico, among others.

One really had to expect that this was coming. Such laws have been proposed in the past and failed to gain support in the legislature. The issue has also been a source of tension in the state’s brewing community. There has been some resistance among production breweries to allowing brewpubs to distribute. Except for the sale of growlers by small breweries, production breweries are restricted from engaging in retail sales directly to consumers. Brewpubs can sell beer (and other alcoholic beverages) directly to consumers, and at more than one location. Allowing them to also distribute into the retail market was viewed by some production breweries as creating unfair competition. The “Surly bill”, which would allow breweries to sell directly to the public, must, I suspect, be viewed by some brewpub owners in the same way. Putting both bills on the table would alleviate that perceived imbalance.

The question had already been raised whether putting all of these measures forward at once decreases the chances of success for any of them. Are brewers overreaching by pushing for too much, too fast in a state that has been resistant to changing anything related to beer manufacture and distribution? Adding one more bill to the mix just adds to the flood.  I think the answer lies in part on who supports and who opposes the bills. Powerful lobbies like the beer wholesalers and the MLBA, whose flip-flop statements about Surly’s bill have become the stuff of extensive internet chatter, could do much to stop the proposals if they apply their leverage in opposition. Get their support and the chances of success are greatly improved. This new brewpub bill would seem to benefit both groups’ constituents; distributors get access to new brewery accounts and retailers gain new and desirable products to sell. But will support of one take away support of the other? That remains to be seen.