Alcohol Regulatory Round-up: August 11th 2011

Federal: A proposed bill, Brewer’s Employment and Excise Relief Act, would reduce the federal excise taxes for craft brewers in order to help them grow in the hope that they will provide jobs, revenue, and economic stimulus. This is a smart move since craft brewers have had a strong showing in the last five years. According to a recent report from the Brewer’s Association, craft brewers saw a 15% increase in production while big beers like Bud, AB-inBev and MillerCoors have suffered with the rest of the economy. The more government gets out of the way of these businesses the more likely they are to grow, and the bigger and more financially secure they are the more people they can afford to employ.

Alabama: A clear example of how deregulation equals stimulation is occurring in Alabama, a state with a grand total of 6 brewers. It’s not surprising there are so few. But a new law seems likely to encourage a few brewers to give Alabama a try. Thanks in particular to the efforts of grassroots beer-lovers, Free The Hops, which I detailed in an earlier post, Alabama legislators passed the Brewery Modernization Act in May. It was signed by the governor in June, and a few months later new breweries are reportedly making plans to open in the state. While Alabama still has really stupid laws regulating brewing, (like the one that limits brewpubs to historic buildings and counties where brewing occurred before prohibition) the new regulations allow brewers to offer tours, tastings, sell their beer on-premise whether or not they have a restaurant, and it allows brewpubs to sell their beer to wholesalers for retail sales where previously they were limited to selling on-premise.

Illinois: CEI’s favorite Senator, Dick Durbin, is at it again, this time he’s “helping” Illinois residents by forcing a liquor sales curfew of 1am.

Pennsylvania: As I have written in the past, a few PA legislators are making a valiant effort to privatize the long-lasting state control over liquor sales. However, as the state approaches liquor liberation some residents are beginning to wonder when the arcane laws regulating beer sales will be revisited. Not only are PA beer lovers prevented from purchasing beer in grocery stores (with limited exceptions), they are limited to buying beer by the case (no less) at distributor stores or limited to two six-packs at carry out tavern stores.

Massachusetts: As I wrote about yesterday, craft brewers in the state of Massachusetts breathed a sigh of relief after the alcohol control commission reversed a decision that would have required farmer-brewers to either purchase 50% of their ingredients locally, or switch to different license that would have ruined most small brewers.

Also in Massachusetts, a bill is working its way through the legislature that might make it easier for brewers to switch distributors—something that currently is virtually impossible for craft brewers in the state, regardless of how much a distributor underperforms. House Bill 1897 would marginally increase small brewers’ ability to get out of distribution contracts and to switch to a different distributor.  This has the added benefit of incentivizing distributors to do a better job in getting their craft beer customers on the shelves lest they lose the contract to a competing distributor.

Michigan: Regulators have finished assembling the 21-person Advisory Committee on Liquor Control Rules. The committee, commissioned by Governor Rick Snyder, is tasked with reviewing the state’s onerous and outdated regulation of alcohol and to make recommendation to reform the laws so that they are “simple, transparent, fair and efficient and conducive to business growth and job creation”.Members of the committee include restaurant and brewery owners, liquor suppliers and retailers among others who will seek to bring Michigan liquor laws into the 21st century. It’s about time.

Texas:  The state legislature in Texas can look forward to a far more robust fight for alcohol freedom in the coming years with the formation of the grassroots organization Open the Taps. As I have detailed in the past Texas has a host of bad alcohol laws, mostly stemming from the strangle-hold that the wholesalers have over the industry and, to some extent, over lawmakers.

Utah: The state of Utah is being sued for some of its liquor laws. Liquor licenses are far too limited and those can get them are reportedly waiting sometimes up to 2 years to get them.

Washington: As predicted, the Washington State fight for liquor privatization continues. Now, Trader Joe’s is throwing its weight behind privatization along with Costco.