Teamsters vs. Beer: the Push for Sunday Taproom and Growler Sales in Minnesota and What it Says About Minnesota’s Outdated and Nonsensical Liquor Laws



This past Sunday I made a brief appearance on WCCO’s News and Views program to discuss with my good friend, Roshini Rajkumar, the status of pending legislation that would allow Minnesota’s craft breweries to open their taprooms for Sunday pint sales and off-sale growler sales. 


Minnesota’s infamous ban on Sunday off-sale liquor sales has attracted much attention, particularly of late.  The ban – which requires liquor stores, breweries, etc. to close on Sundays even if the owners desire otherwise – is a classic example of an outdated “blue law” founded in the temperance movement that remains in place not because of moral concerns, but of pure, naked special interests.  I like to refer to these special interests – a triumvirate of entities including the Minnesota Licensed Beverage Association (MLBA), the Minnesota Beer Wholesalers Association (MBWA) and the Teamsters – as Minnesota’s “liquor cartel.”


Of a half dozen or so proposed bills to repeal the ban in some way shape or form, only one received a committee hearing.  That bill would allow Minnesota’s craft breweries – 48 in number and counting – to open their taprooms to sell pints and growlers on Sundays.  All signs indicated that this legislation was going to reach the desk of Governor Dayton (who had already indicated that he would sign any Sunday sales repeal bill as part of his “un-Session” dealing with the repeal of outdated and/or useless laws) as it headed to the House Tax Committee.  The MLBA even authored the bill and the wholesalers said nothing pro or con about it.


And then the Teamsters spoke up, and when the Teamsters speak, the DFL majority listens. 


Their objection?  That an unnamed distributor told them that it could renegotiate its contract with the Teamsters – a contract which has yet to be produced and provided to legislators – if even this small compromise on Sunday sales were to become law.


And just like that, the bill is now on life support.


This legislative battle is emblematic of a larger issue related to Minnesota’s liquor laws as they pertain to our exploding craft brewing industry.  Despite the fact that Minnesota’s breweries accounted for $5 million in wages paid in 2013, Minnesota’s laws continue to pose competitive disadvantages for these local small businesses.


Here are just a few examples:




  • In the name of Minnesota’s hallowed “three-tier” distribution system that separates the manufacture, distribution and sale of alcoholic beverages, we allow lifetime distribution agreements to be created that give the brewer little to no say in how its product(s) are sold.



  • Minnesota will not allow a brewer to make cider – which has seen its sales triple nationwide since 2007 — or mead, which are each classified as “wine.”  Meanwhile, it is perfectly legal for large brewery interests such as A-B InBev (the parent company of Budweiser) to import hard cider into Minnesota.



  • Minnesota limits the pool of potential investors to what is a highly capital intense industry by prohibiting any owner of a brewery to hold an interest in a retail license, which the Minnesota Department of Public Safety reads broadly enough to include owning a mere minority interest in two entities, one of which operates a brewery and the other a restaurant with a retail license. 



  • When it comes to brewpubs, don’t get me started.  Instead of affording them the same treatment as other Minnesota breweries (which, as I outlined above, is less than ideal), Minnesota law simply prohibits brewpubs from distributing their product beyond the four walls of the single location which they are allowed to own and operate…oh, and no selling growlers on Sunday even though they can be open and sell anything for on-premises consumption.


The bottom line in all of this is that Minnesota’s lawmakers (and neither party is innocent in all of this, although there are bright spots on both sides of the aisle) need to say no to the liquor cartel and any other special interests, pull their heads out of their rear-ends and restore Minnesota’s place in the brewing industry to what it once was (i.e., over 200 breweries statewide prior to Prohibition).


 



 

Posted in Blog, Brewery Law, Business Law