Taverns, brewers develop brewery legislation

The Montana Tavern Association, the Montana Brewers Association and several other industry groups have come together to draft a bill to allow Montana’s craft brewing industry to grow within the current three-tier system that regulates the production, distribution and sale of alcohol in the state.

The goal of the 2015 Montana Brewers Act is to allow microbreweries to keep their tap rooms and employees as they grow, and to provide brewers with choices about how they can grow their business. It will ensure that brewers, their businesses, and employees are not penalized for success by current artificial production limits.

“I am proud to sponsor legislation that will allow the craft brewing industry to grow and continue employing people in my district and across Montana,” Rep. Pat Noonan, D-Anaconda, said. “This bill is a common-sense solution that allows the craft brewing industry to become an even greater point of pride than it already is in our communities and our state. This bill will provide a boost to the Montana economy by providing brewers with clear paths to grow and expand their businesses, grow jobs, and produce more beer for in state and out of state distribution.”

The Montana Brewers Act resulted from the collaboration of industry members that met throughout this past interim to hammer out a brewing solution. The industry coalition was comprised of 15 members, including the Montana Brewers Association, the Montana Tavern Association, the Montana Restaurant Association, the Gaming Industry Association, the Montana Beer and Wine Distributors Association, and the state’s Alcohol Control Division.

The Montana Brewers Act would increase the 10,000-barrel sample-room limit to 60,000 barrels, allowing breweries to grow beyond 10,000 barrels without closing their tap rooms and forfeiting the ability to sell their beer on premise.

Brewers exceeding 10,000 barrels will be able to operate modest tap rooms with on-premise consumption of not more than 500 barrels annually. Additionally, the bill allows brewers to co-locate a retail license, if they choose, under the brewer’s name, allowing them to sell their beer past 8 p.m. for greater retail ability.  

 “I am happy to have worked with our partners in the industry on this compromise bill,” said Sam Hoffmann, owner of Red Lodge Ales in Red Lodge and a member of the coalition. “Retail-focused breweries can participate in Montana’s retail system, and production breweries can continue growing without shutting down their popular tap rooms.”

And current taverns that want to get into brewing can purchase a brewers license and hold both the liquor and brewing license under the same name. To provide stability, co-located license holders are limited to holding only two additional retail licenses.  

“Some of our taverns and restaurants would like the opportunity to serve their customers a beer that was crafted in-house and to transition their businesses more toward the brewpub model,” said Mike Hope President of the Montana Tavern Association. “This compromise will allow them to do just that.”

Brad Anderson, representing the Restaurant Association on the coalition and owner of Montana Buffalo Wild Wings in Montana, said, “This bill supports the three-tier system and allows all members to participate in the growth in the industry, while placing parity on the industry.”

 Josh Townsley, president of the Montana Brewers Association, said, “Our goal is to give our members options. Current brewers and new entrants can continue to operate tap rooms, and are not forced to give them up as they grow. Craft brewers have developed a reputation for providing outstanding craft beer in our communities, and the local and visiting public enjoys sampling our beers at our breweries. This bill will provide needed choice for brewers to successfully grow these small main street businesses in Montana.”

The Montana Beer and Wine Distributors Association, consisting of the 22 beer and wine distributors in Montana, opposes the proposed bill. Originally a member of the coalition of industry members who met throughout the interim, the association pulled out of the coalition in December 2014, citing concerns about how the bill would affect the integrity of the three-tier system.

Other industry members say they do not share this concern and point out that breweries in other states throughout the country are able to own retail licenses without disruption to the three-tier system, and that the “middle” tier is doing fine in those states.  

“Our brewers want and need our distribution partners in Montana, and we’d like them back at the table,” Townsley said. “This bill will not change the fact that 97 percent of all beer sold in Montana goes through the distributors, and only 3 percent is sold directly by our brewers. To the contrary, it is likely that passage of this bill will send more beer through the distribution tier.”