R Street Testifies in Support of Montana Micro Distillery Bills


The R Street Institute’s Western Region Director Steven Greenhut recently submitted testimony before the Montana legislature in support of two bills that would liberalize rules for micro distilleries in the state. One bill (SB 182) would raise the production cap for micro distilleries, while the other (HB 362) would increase the amount of distilled spirits that can be sold for off-premise consumption. As Greenhut articulated:

Montana has a boisterous and growing micro-distillery industry. This is a wonderful development for a variety of reasons. Similar to microbreweries, these businesses tap into growing regional interest in artisanal and craft beverages. These small distilleries epitomize the spirit of entrepreneurship. They create well-paying and interesting jobs. They promote tourism, as visitors love to go to tasting rooms and compare the creative libations distilled in different cities and regions. They also provide new revenue for state and local governments.

To read R Street’s full testimony for SB 182 see here, and for HB 362 here.

Montana Legislature Decides Against Expanded Brewery Taproom Hours

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The Montana legislature was considering legislation to extend the hours in which brewery taprooms could stay open and serve the public. reports that the bill died a quick death, however:

A bill allowing Montana microbrewery taprooms to extend their hours to 10 p.m. died a quick death.

Without discussion, the House Business and Labor Committee voted 16-to-3 to kill the measure Friday morning.

The committee had a hearing on House Bill 185 earlier this week.

Montana craft brewers supported the bill, saying that allowing their tap rooms to remain open for an additional two hours would help the booming industry keep growing.

But tavern and restaurant owners strongly opposed it…

Read more here.

Montana Changes Liquor Licensing System to Auctions, But Quotas Remain


Montana is one of several states with a liquor license quota system, meaning that the number of liquor licenses available are capped based on population. The Montana legislature wants to move to competitive bidding auctions for licenses in an effort to raise more revenue, but the quota system appears to be here to stay--which ensures liquor licenses will remain artificially inflated, costing up to $750,000 in the stateThe Missoulian reports:

"Montana lawmakers drastically changed the system by which liquor licenses are obtained from a lottery to a competitive bidding auction during the recent special session...

Montana has had a lottery-based system for obtaining liquor licenses since about 1945. New licenses were essentially free, although fees were attached.

Under the new system, anyone who wants to buy a license must bid at an auction held by the state. The minimum bid will be three-quarters of the market value, as determined by the DOR. In Missoula, that could be more than half a million dollars, as several liquor licenses were recently listed for sale for $750,000..."

Read the rest here.


State-imposed quotas drive Montana liquor licenses up to 750k


It's a basic law of economics that restricting the supply of a certain commodity will drive up its price. According to an article in the Missoulian, restaurants in Montana are facing this brutal reality when it comes to liquor licenses:

"As Missoula's economy continues to rebound from the Great Recession, the prices of quota system-controlled liquor licenses here are also climbing back up. 

Three liquor licenses are for sale in Missoula for about $750,000 apiece, according to the local Multiple Listing Service. That’s a huge price for the privilege of selling spirits, and the market-driven prices are on pace to get back to the all-time high of just over $1 million they were fetching pre-Recession. 

Because customers pine for cocktails with meals, entrepreneurs who want to get into the restaurant game have to either make a huge investment up front just to get the permission slip or risk losing clients to competitors that can sell them that vodka tonic...

Montana’s quota system is a very old and complex conundrum that isn’t likely to be solved any time soon.

The state is one of only 17 so-called “alcohol control states” with a quota system on liquor licenses. Here, they were put in place in the 1940s to control the distribution after Prohibition was rolled back. The number available in any given city is now based on population metrics..."

Read the rest here.



When the State Gives Lemons

The magazine Beverage Master has a nice rundown of liquor regulations and restrictions in various states around the country:

"With the passing of the 21st amendment, the prohibition of alcohol in the United States was officially repealed. Each state was given the power to regulate and control the distribution of alcohol within their borders. Today, every state handles the sales of alcohol a little differently, including setting limitations on what craft distilleries can do in their gift shops and tasting rooms. Some states are more “craft friendly” than others by allowing sampling, cocktail and bottle sales, direct distribution, paid tours, and other profitable options. However, every state imposes some restrictions. When the state imposes restrictions, how can distillers work within the laws to increase their bottom line?.."

Read the state-by-state summaries here:

Montana Senate Restores Increased Production Limits for Breweries

Sam Wilson provides an update in the Daily Inter Lake on recent legislative activity in Montana:

"Two days after a state legislative panel gutted a bill allowing breweries to ramp up beer production while still charging for drinks in their taprooms, the Senate restored the original proposal while making concessions to Montana’s tavern owners and distribution companies.

As originally written, House Bill 541 sought to raise that annual production cap from 10,000 barrels per year to 60,000 barrels per year. The bill easily passed the House, but the Senate business committee amended the legislation Tuesday to cut the cap down to 12,000 barrels.

Under current law, exceeding that cap means that breweries in Montana can’t sell beer on their premises. Missoula-based Big Sky Brewing Co., for instance, can only offer free samples in its taproom.

Speaking on the Senate floor during the chamber’s debate on the bill, Sen. Fred Thomas, R-Stevensville, offered an amendment to House Bill 541 to restore the original 60,000-barrel limit in the bill, while limiting breweries to three locations in the state and limiting annual on-premise consumption to 2,000 barrels per year...."

Read more at: previously covered these reform efforts here:

Bill could raise production for Montana craft beer industry

NBC Montana reports:

"Montana lawmakers will hear arguments on a bill that could change the way Montana breweries conduct business.

"House Bill 541 would redefine the definition of "small brewery" and allow Montana brewers to produce up to 60,000 barrels of beer a year. The current law only allows [small] breweries to produce 10,000 barrels a year.

"The bill would also allow breweries to sell beer in their taprooms. Small breweries are only allowed to sell a certain number of drinks, and larger breweries are only allowed to provide 'tastes.'..."

Read more at:

Bid launched to raise taxes on beer, wine and spirits in Montana

Holly Michels reports from Montana:

"After failing to win support for an increased wine tax last month, the governor's office returned to lawmakers on Friday to pitch a revenue-raising plan that would broaden the request to include beer and spirits.

"It's unclear how much more consumers would have to pay for a bottle of wine or a six-pack of beer because the tax would be charged on producers or retailers, not directly on consumers as a sales tax.

"The bill heard Friday comes about a month after the Senate Taxation Committee dashed an earlier effort sought by Gov. Steve Bullock to raise taxes on wine to establish a revenue stream to bolster the state's unrestricted spending account and pay for health and education programs included in his budget proposal..."

Read more at: