How the Beer Industry Ended Minnesota’s Government Shutdown

On July 1, 2011, when Minnesota Governor Mark Dayton and the Republican-controlled Legislature reached an impasse in their negotiations over a budget for the 2011-12 biennium, Minnesota’s state government shutdown.  State parks closed, highway projects stopped and only those functions deemed “essential” by a Special Master and a single District Court Judge in Ramsey County continued.

One week passed and there appeared to be no end to the stalemate in site.  Some began predicting a protracted battle lasting through the fall and even until January 2012.

And then the beer stopped flowing…or almost stopped flowing…and suddenly the Governor and the Legislature struck a deal which, in the end, wasn’t much different than the one on the table on June 30.

Here’s how the beer industry turned the lights back on in Minnesota:

• The first shutdown-related blow to Minnesota’s beer industry was the plight of Steeltoe Brewing.  This brand new brewery which had targeted July 1, 2011 for its opening, instead sat idle for lack of a final inspection from the Minnesota Department of Labor and Industry on its boiler.  The inability to obtain a boiler inspection prevented the required boiler license and Steeltoe was on the sidelines until the government re-opened.

• Next up was brewery giant MillerCoors who faced the possibility of having to pull all of its product – 39 brands in all – off of Minnesota shelves for lack of a renewal of its brand label license.  Apparently, MillerCoors submitted its renewal application (required every three years under Minnesota law) with a check that was larger than required by the State of Minnesota.  Rather than simply refund the difference like any normal business would, the Alcohol & Gambling Enforcement Division of the Minnesota Department of Public Safety instead returned MillerCoors’ check, putting the renewal application on hold until a new check for the proper amount was received.  When, on July 1, even though MillerCoors had apparently resubmitted said check prior to June 30, because the AGE failed to act on finalizing the renewal application prior to the shutdown, MillerCoors was never issued its brand label license.  When news broke that Minnesotans stood to lose access to standards such as Miller Lite, Coors Light, etc., the heat ratcheted up to get a deal done, more so than the loss of access to the state parks or any type of social services.  Added to the mix was the fact that another giant, AnheuserBusch, had its brand label license renewal due up in the fall.

• Finally, scores of bar and restaurant operators were faced with the prospect of not having any beer to sell for lack of the issuance of their buyer’s cards.  Imagine a trip to your favorite watering hole and you discover that your beverage choices are water or soda.  I couldn’t help but think back to the episode of “Cheers” where someone forgot to send back the renewal of the liquor license and the crew is forced to sell a variety of colored liquids designed to imitate the real thing.  It’s a scary thought that this could’ve happened in real life because of the government shutdown.

And so it was on July 14, 2011, Governor Dayton announced his willingness to accept the last offer made by the Republican Legislature on June 30, and hours later, the Legislative leaders agreed to a handful of conditions included in the Governor’s acceptance.  As I write this, both sides are hard at work at the Capitol drafting the bills needed to give effect to the budget deal and get Minnesota’s government back to work.

When all is said and done, I wonder if they’ll all sit down for a “beer summit”.


Posted in Blog, Brewery Law, Business Law
One comment on “How the Beer Industry Ended Minnesota’s Government Shutdown
  1. This issue hit home for our local winery, Four Daughters Vineyard and Winery, as well. It’s under construction, aiming for a fall opening. That opening date is held up by the fact that we can’t get inspectors into the building to allow us to continue with construction. Frustrating that businesses are working, creating jobs, trying to bring wealth into Minnesota, and the government shutdown won’t allow us to move forward.