Beer

Watered-Down Beer Turns Into Watered-Down Reforms

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We’ve written about weak beer laws before in this space—including calling for Utah to get rid of its 3.2-percent alcohol-by-weight cap that limited the strength of beers that could be sold by grocery stores in the state. Utah finally reformed the cap earlier this year, leaving Minnesota as the only state left in the country with a 3.2 law. But as R Street’s Jarrett Dieterle points out in a recent piece for Governing, the states that have repealed their 3.2 laws have simply replaced them with a slightly higher cap:

Today, 3.2 laws are mostly a thing of the past. This is because a handful of state legislatures -- including long-time holdouts Kansas, Oklahoma and Utah -- have cleared away their versions in recent years. Minnesota is now the last state to limit convenience stores and groceries to 3.2 beer. (Unlike some former variants of 3.2 laws in other states, Minnesota permits licensed liquor stores to sell stronger beer).

This string of modern reforms may seem to beer-lovers like cause for celebration, but the reality is that America's weak-beer wars are far from over. Not only does Minnesota still have its law on the books, but many of the states that did repeal their 3.2 laws merely replaced them with slightly less onerous versions.

For instance, while Kansas overturned its 3.2 law this year, it ended up only raising the permissible alcohol level for beer to 6 percent alcohol-by-volume. Because of the different units of measure -- the original 3.2 laws used alcohol-by-weight, whereas Kansas' new limit uses alcohol-by-volume -- the reform is less than meets the eye: A 6 percent ABV beer is actually only a 4.7 percent ABW brew, a disappointingly modest increase. Oklahoma did slightly better in raising its threshold to 8.99 percent ABV (around 7 percent ABW) while Utah was only able to muster a raise to 5 percent ABV (around 4 percent ABW).

The larger issue is that these new limits are still completely arbitrary and especially unsuited to the modern craft-beer era…

Read the rest here.

Which States Are Winning the Craft Beer Boom?

Image courtesy of Visual Capitalist.

Image courtesy of Visual Capitalist.

The craft beer boom continues to proceed apace, spreading to cities and small towns around the country. Data collected from the Brewers Association shows which states have seen the most growth in craft breweries, and which have seen the least. Unsurprisingly, many West Coast states—among the first to liberalize their brewpub laws in the 1980s and 90s—have among the highest number of craft breweries. Other states, particularly many in the south, are still lagging behind because of regulatory strictures. Visual Capitalist summarizes:

All movements start with rebellion, and the craft beer revolution is no different.

Born from the frustration of mass-produced beer made from cheap ingredients, entrepreneurs went head-to-head with global brewery giants to showcase local and independent craftsmanship.

Suddenly, drinking beer became less about the alcoholic content and more about the quality and experience. Craft beer allowed for constantly changing flavors, recipes, and stories. With sales accounting for 24% of U.S. beer market worth over $114 billion, the global craft beer movement has been historic…

According to the data, Vermont has emerged as the craft beer capital of the U.S. with 11.5 breweries per 100,000 people. That’s equal to 151 pints of beer produced per drinking-age adult. Following closely behind are Montana and Maine, each with 9.6 breweries per capita.

You’ll notice that in Southern states such as AlabamaGeorgia, and Mississippi, that there are only 0-0.9 breweries per capita. This is actually because of tighter liquor laws—for example, only 10 years ago, it was illegal to sell specialty beer in South Carolina that contained more alcohol content than a typical Budweiser…

Read the rest here.

Texas Passes Brewery and Liquor Store Reforms

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Texas is known for its arcane alcohol rules, including its infamous “consanguinity exception,” which restricts the number of liquor stores an individual can own to 5 outlets, but then creates a loophole that allows family members to join together to own more. The state also was known for prohibiting breweries from selling to-go beer. Both those restrictions have no been loosened by recent legislation, as reported by the Texas Tribune:

Texas on Saturday joined the rest of the nation when Gov. Greg Abbott signed a law letting adults buy beer to go from home-grown craft breweries.

Smaller brewpubs already can sell beer to go. Abbott's action means that beginning on Sept. 1, the state's giving that right to breweries, too…

[The legislation also] expands the number of liquor store permits that an individual can own, getting rid of a loophole that favored blood connections. However, publicly traded companies like Walmart, Costco, Walgreens and Kroger still won't be permitted to sell liquor in Texas. That issue's now pending before the 5th U.S. Circuit Court of Appeals.

Also, a push to amend HB 1545 to let stores sell wine and beer on Sundays starting at 10 a.m. rather than noon failed, as did a separate proposal to allow liquor sales on Sundays…

Read more here.

Connecticut Lawmakers Try to Legalize Self-Service Beer Bars

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Self-service beer bars have grown in popularity in recent years as customers enjoy the experience of being able to pour their own brew from a tap. Numerous states still prohibit this type of self-service , however. According to WTNH.com, Connecticut lawmakers may finally legalize self-service for wine and beer in the Nutmeg State:

Imagine getting your beer or glass of wine like you would a fountain soda.  It may soon be a reality in Connecticut

The bill that would allow self-service alcohol machines at bars just got the thumbs up from the House of Representatives. 

You would get a card from the bartender and swipe it at the machine…

Read more here.


D.C. Mayor Proposes More Booze Reforms

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Washington, D.C.’s alcohol laws are better than many places, but the District still has its fair share of rules that hurt producers and consumers. According to DCist.com, D.C. mayor Muriel Bowser is now proposing a new slate of reforms aimed at helping the city’s growing craft alcohol scene:

Mayor Muriel Bowser has proposed several changes to make it easier for local alcohol manufacturers to sell their wares, including allowing wineries and distilleries to ship products directly to consumers and raising the allowable amount of alcohol in wine. They would be the latest in a slew of legislative changes over the past eight years that have allowed craft breweries, wineries, and distilleries to flourish in D.C. after five dry decades…

With the Manufacturer and Pub Permit Parity Amendment Act of 2019, Bowser is now proposing a series of tweaks that continue to respond to the city’s evolving craft alcohol scene, particularly its burgeoning cider scene.

For one, it would allow for higher-proof wines (cider is considered a wine under federal and local law)—raising it from 15 percent to 21 percent.

“We have several wine pubs currently that would like to make cider that’s slightly more than 15 percent alcohol by volume. We thought it made sense to bring the District in line with other jurisdictions currently,” Moosally says. Wine can be up to 24 percent alcohol under federal law, 22 percent under Maryland law, and 21 percent in Virginia, Moosally says.

The new legislation would also allow wineries and distilleries to ship their products directly to consumers (currently only breweries can do so.)…

Read the rest here.

California Tries to Legalize Wine (and Beer) Volunteers Based on R Street Recommendation

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Small wineries and breweries throughout the country often use volunteers to help produce and package their products. Doing so both supplies these small producers with extra labor and allows the volunteers (who are often craft beverage enthusiasts) to learn more about the production process. In California, however, the use of volunteers is technically a violation of the state’s labor code, and the state’s Department of Industrial Relations has previously slapped hefty fines on California wineries for using volunteers. R Street’s Western Region Director Steven Greenhut wrote about this issue back in 2014, and now, directly inspired by Steve’s column, state lawmakers are trying to fix the problem. Their new bill would exempt small wineries and microbreweries from this provision of the state labor code, and Steve submitted a letter of support on behalf of R Street for the reform:

I write you in support of S.B. 448, legislation that “would exempt a small winery or small microbrewery … that utilizes volunteers who perform part-time labor in exchange for hands-on training, from having these volunteers classified as employees or apprentices.”

These small wineries and breweries clearly deserve an exemption from this section of the labor code given that many people like the opportunity to volunteer at these businesses to learn about the trade. Such volunteers typically are older people who enjoy the wine and brewery culture. They aren’t interested in the money, but in learning about the fascinating process of making wine and beer. In fact, I’ve volunteered at a winery before with my church group where we picked grapes and made our own wine as part of an indescribably enjoyable afternoon…

Read the letter of support here, and Steve’s 2014 column that inspired the law here.

R Street's Jarrett Dieterle Interviewed About Nebraska Alcohol Taxes

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Nebraska’s legislature is considering increasing taxes on beer, wine, and spirits in an effort to raise more revenue and provide property tax relief. The Heartland Institute interviewed R Street’s Jarrett Dieterle about the proposal:

Local craft breweries that produce small volumes of beer are growing in popularity nationally and in Nebraska, says Jarrett Dieterle, director of commercial freedom policy at the R Street Institute.

“The craft beverage industry is booming cross the country,” said Dieterle. “In 2017, craft breweries created the second-most manufacturing jobs of any industry in America.

“Nebraska is no exception,” Dieterle said. “Nebraska has 3.5 breweries per 100,000 people, which puts it in the top 15 states for breweries per capita. Overall, breweries had a $465 million economic impact in the state.”

The craft beer industry will shrink if Nebraska moves forward with this tax hike, says Dieterle.

“Research has demonstrated that increasing taxes on products like beer can lead to a decrease in brewpubs and breweries in a state,” said Dieterle…

Governments shouldn’t focus on a specific product category to increase revenue, says Dieterle.

“Generally, state and local governments fund their operations through a combination of property, income, and sales taxes,” said Dieterle. “Singling out the alcohol industry to bear the brunt of revenue-generation in the state makes little sense,” Dieterle said…

Read the whole article here.

As Beer Market Matures, Many Regulatory Obstacles Remain

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As the craft beer movement has continued to explode in recent years, some analysts have warned that the market is becoming over-saturated. R Street’s Jarrett Dieterle has argued that in the context of a saturated market, it’s even more important to eliminate restrictive government-imposed barriers that hurt producers; after all, the market providers enough pressure without harmful (and needless) external hurdles being layered on. Food policy expert Baylen Linnekin recently sounded a similar warning in an article for Reason.com:

While the market for craft beer is still growing, the rate of growth has slowed considerably in recent years. Brewers Association chief economist Bart Watson last year said the craft beer industry his group represents is showing signs of "deceleration."

I'm confident the industry's growth can continue. But here's a caveat: craft brewers also continue to face their share of outside obstacles, chiefly in the form of state laws that hinder growth and profitability…

 I'm generally optimistic about both the industry and trends in state laws in the decade or so I've been writing about the industry. But I'm also frustrated by the slow pace of change and by seeing the same tired arguments…

Craft beer is a highly competitive, innovative, and important industry with boundless potential. In the end, though, the industry can only go as far as lawmakers will allow.

Linnekin’s whole article is well worth a read.

The DrinksReform.org team has also previously interviewed Linnekin on the absurdity of America’s alcohol laws.

Agreement Reached to Lift North Carolina's Self-Distribution Cap

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As our team has previously covered, North Carolina caps the number of barrels that breweries in the state can self-distribute at 25,000 annually. This means that once a brewery exceeds that barrel limit, it is forced to work with middlemen distributors in order to sell its beer in stores and restaurants in the state. Unsurprisingly, this creates a whole host of problems for growing breweries. While previous attempts to lift the self-distribution cap have failed in the state legislature, the AP reports that a deal to lift the cap has been reached (although the cap still remains in place at a higher level, rather than being scrapped entirely):

Small North Carolina brewers and alcohol wholesalers raised glasses on Thursday to what they call a legislative compromise that allows the breweries to keep control of their products longer as they grow.

Legislators from both political parties and industry representatives announced an agreement in General Assembly bills filed this week to let these craft breweries sell double the amount of their beer annually on their own compared to what current law allows…

The legislation would allow the creation of a new classification of brewers that can self-distribute up to 50,000 barrels a year. While these mid-sized brewers would still be able to sell up to 100,000 barrels, distributions above the first 50,000 barrels would have to be performed by a wholesaler.

Read the rest here.

Maryland Considers Reforming Beer Franchise Laws

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After several years of political firestorms between reform-minded state Comptroller Peter Franchot and the state lawmakers, a key legislative committee in Maryland’s legislature has signaled a willingness to reform and loosen the state’s strict franchise laws that govern the contracts between brewers and wholesalers. According to Brewbound:

Franchise law reform is closer to reality in Maryland without the help of Maryland Comptroller Peter Franchot. The Senate Education, Health and Environmental Affairs Committee voted unanimously last week to loosen the state’s franchise laws that lock brewers into contracts with their wholesalers, according to The Daily Record.

Under the proposed changes, beer companies making fewer than 30,000 barrels annually would be allowed to exit their existing distribution agreements by giving 45 days notice and paying fair market value. Brewers making 12,500 barrels or less would be required to pay fair market value for the product remaining in a wholesaler’s warehouse, while companies making between 12,500 and 30,000 barrels would be required to pay the fee as well as the wholesaler’s marketing costs.

Currently, brewers are required to give 180-days notice and show “good cause.”…

Read more here.