Forbes: Pushback Against Tasting Rooms

I can't remember if it was an increase in capacity in the law or allowing up to 3 taprooms. But the criticisms I've seen about this law in TX stems from:.

1. The capacity of 225k bbl/yr is cumulative for every location for the brewing company AND ANY brewery or investor that owns a certain share... This means that Karbach (owned by ABI), Revolver (owned by MillerCoors), Oskar Blues, and Shiner are all directly affected now.
I know that Hops and Grain were protesting it because they have been working on plans for expanding and opening up brewing locations in different cities and they said this bill was impacting their plans.

2. This will really put an restriction on breweries trying to get investment money to facilitate expansion. If an existing brewery wants to sell shares to an investment firm then they run into the problems of exceeding the cap due to the cumulative nature of the bill.

 

Legislation should be geared towards protecting fair competition which in turn protects us as a consumer. Most of those regulations don't protect us at all. Requiring a tour, prohibiting food, snacks, entertainment, etc. all just hurt us as consumers.

This is also short sited because breweries can actually be good for the local economy. A great example is the city of Framingham MA. They gave Jack's Abby a tax break to open a large beer hall that serves not only their beer but food. This was part of their efforts to revitalize their downtown. Now people come from all over the area to their downtown just to go to Jack's Abby and the old brewery they left is now Exhibit A brewery which also brings in more people to spend money in town. Seems like a win win for everyone.

 

That might make more sense.

 

It would be intersting to hear what industry folks think about eliminating the laws that dictate the three tier system. Would you folks prefer that these laws be eliminated?

Cheers!

@Sixpoint @sierranevadabill @StoneBrewingCo @RobH @KOP_Beer_OUtlet

 

I have a feeling they won't comment on something that might upset people they have to work with.

 

After re-reading it, it comes across to me as being a general boiletplate complaint against tap rooms in general and not specifically about selling others' beer. It just comes across that way due to the paragraph's placement in the piece.

But, as was also made clear in the piece, these tap rooms have fueled a growing industry that benefits everyone involved (including the distributor tier ). As was promised by those who lobby for such reforms in the first place, I might add. So those guys can just stuff their self serving objections, imo .

 

Quite agree, do away with the mandate. I don't see where it serves any public interest.

 

If you'd really like to see it abolished, start lobbying the Maine legislature who put your version of it in place.

 

Which of those you mention sells competing brands other than their own one up? I've never seen a bakery, pizzeria, or computer store (see Apple) selling any products that compete with the products they make.

 

In Pennsylvania at least, the advantage is a brewery doesn't have to obtain an expensive liquor license to operate a tap room and PA allows brewers to sell beer made by other brewers [shockingly, considering PA's liquor law history]. Distributors don't mind of course, but the local bars don't appreciate a competitor can stick a homebrew kit in the back, call themselves a "brewery tap-room," and in essence run a bar without investing tens of thousands to hundreds of thousands of dollars in a liquor license.* If there are similar licensing conditions in other states, then I understand the concern. (PA closed the loophole by establishing a minimum percentage of sales a brewery tap room must produce on-premises, but other states could handle it differently.)

* - The obvious answer to just remove all liquor license requirements is a non-starter in PA, and irrelevant to the national level discussion, so let's not go there.

 

Given how many states use their own existing version of a three tier system as a mechanism for levying and collecting tax revenues I suspect it would be a non-starter in most other states as well. (There are reasons that no brewery allowed to do self-distribution within their own state seems to have the ability to do so outside of their own state.)

Similarly, any discussion at the national level that does not take into account the fact that when it comes to laws governing alcohol there are effectively 52 different sets of laws governing alcohol. One at the national level, one for the DC area, and one for each state. Which I see as meaning that discussing the three Tier system, for example, at a national level is also a non-starter since it is not the result of national laws.

 

As mentioned in the OP above, the article says:

• “Distributors and retailers…starting to partner with mega-breweries like Anheuser-Busch InBev, which don’t need tasting rooms to make money, to lobby for laws that curtail the influence and abilities of these resources that prove indispensable to pocket-sized breweries and the growth of the craft industry as a whole”

When was it not the case that distributors, retailers and large (or small) brewers joined forces in various combinations on issues they see as serving their own best interests?

 

I've stated many times when this topic reappears that I'm no fan of franchise laws and the 3 tier system, but....I would be very interested to see how product is shipped, from where, to whom, and how it gets further into retail without a well developed chain from producer to end seller. Doing away with the 3 tier system would create havoc, and very likely interfere with the broad offerings of many good wholesalers. As we are witnessing in a piece of our current "political" environment, doing away with standard practice without a reasonable/viable replacement is a recipe for disaster. I'm open to killing franchise laws and loosening up the grip large wholesalers have currently over the distribution landscape. 50 states is like 50 countries. It would be a formidable task to execute smoothly, even over some time.

 

I may have missed it but I do not think that anybody suggested "doing away with the 3 tier system" but there have been suggestions that the laws mandated a 3 tier system should be eliminated. What is your stance on eliminating the laws that mandate a 3 tier system?

Cheers!

 

Well, I did read from someone today to do away with the 3 tier system, but no matter. Doing away with or altering any mandate in such a form that puts no additional stress on producer, wholesaler, or consumer is agreeable to me. But any alteration to aspects of these existing statutes would be met with stiff resistance and big money from those currently enjoying the benefits of these laws.......No one wants their gravy train derailed (Big Beer); but as I've said, be careful what you wish for.

 

Can't remember where I read it, but someone either at or somehow associated with AB InBev said in an interview recently that we should expect challenges to where "craft" beer drinkers choose to consume their favorite beers. Sounds like perhaps the lobbying efforts there have begun?

 

IIRC the individual states who have one put in a 3 tier system after the repeal of prohibition and at least part of the motivation for the system was to control or prevent some of the abuses that had developed by allowing a market under which breweries could and did establish ownership of retailers and block the sales of any other breweries products by that retailer.

 

I was using those as examples in response to the state models that restrict breweries from selling on-site, not selling the products of other companies. But good point.

 

Ahhh, got it.