Surly Legislation Picks Up Steam, and the MLBA is Steamed About It

Last week I wrote about a pending law change in Minnesota that, if approved, would remove a significant hurdle to Surly Brewing Company’s proposed $20 million expansion plan. 

In the past week, as the proposal has moved forward in the Minnesota Legislature and picked up critical public support, the Minnesota Licensed Beverage Association – which initially voiced support the law change which would allow production breweries in Minnesota to sell their product onsite at their production facilities – reversed course and voiced concerns over the proposed change threatening the “three-tiered” system that separates manufacturing, distribution and retailing. 

Jeff Williamson, Secretary of the Minnesota Craft Brewers Guild and Co-Founder and Head Brewer at Flat Earth Brewing Company in St. Paul, Minnesota (who happens to be a client of my Firm), published the following information on the proposed law on Flat Earth’s Facebook page  today and graciously gave me permission to include it here:

There seems to be a lot of confusion and mis-(dis)information about the bill SF416 and HF703 that would allow breweries to sell pint of beer direct to the public, so let’s break it down.

The holder of a brewer’s license under section 340A.301, subdivision 6, clauses (c), (i), and (j), – this refers to all production breweries in the State of MN

may be issued an on-sale license by a local government for service of beers brewed by the brewer, for a location at or adjacent to the premises where brewing occurs. – may be sold a license to sell pints of beer at their brewery or adjacent building.

The license fee shall not be more than $100. All provisions of this chapter not in conflict with this subdivision shall apply to this license. – It will cost $100 dollars a year.

It does not say anything about selling growlers, kegs or any other size container direct to the public.

It does not say anything about getting rid of the 3-tier system.

It is currently being supported by Flat Earth, Fulton, Lift Bridge, August Schell, Summit, and Surly Brewing Companies.

Annual Production Ceiling on selling growlers – 3500 barrels per year ~ MN statute 340A.301-7-b

Annual Production Ceiling on self distribution – 25000 barrels per year ~ MN statute 340A.301-7-g

If SF416 passes and we (Flat Earth Brewing Company) choose to sell pints, we will hire more staff to handle the increase in sales. This means we will pay more business tax, more employee tax and generate more sales tax.

Currently samples are given out for free at our brewery; there are no sales & liquor tax on them. If we took the volume of beer we gave away and converted it to pints, at $5 a pint, we would have generated about $3000 in additional taxes to the State and City of St. Paul. For every pint of beer sold at a brewery in St. Paul, there would be 10.125% tax on it.

In short, this is a great addition to MN liquor laws. It will create jobs, income and taxes for the State of MN, while helping to grow an expanding and popular MN craft brewing industry. Please contact your State representatives and ask them to support MN bill SF416 & HF703.

According to the chief author of the Senate bill, Linda Scheid, this legislation has bi-partisan support (as evidence of this, Senator Scheid is a DFLer while the House bill was introduced by Republican Jenifer Loon).  Still, the MLBA is a significant interest group and, so long as it maintains its opposition, this bill is by no means assured of passage.

The Senate version of the bill, SF416, has been referred to the Senate Commerce and Consumer Protection Committee.  You can find a list of the Committee Members here.

The House version of the bill, HF703, has been referred to the House Commerce and Regulatory Reform Committee.  You can find a list of the Committee Members here.

Also, if you’d like to contact the Minnesota Licensed Beverage Association and voice your concern over its opposition to this law, you can find the MLBA’s contact info here.

At a time when the focus of all in Minnesota government is how to spur on private sector job growth, this legislation is about as a big a no-brainer as you can get.  If you are, like me, a fan of our local craft beer offerings, please contact the aforementioned committee members and your own legislators and express your support.