3 hot issues that will be debated in the year ahead
By Drew Kerr
Omar Ansari has spent his share of time navigating the halls of the Minnesota State Capitol in an attempt to convince lawmakers that breweries should be allowed to share their products directly with the masses. This year, with a battery of newly minted taprooms to show for the legislation that bears his brewery’s name, the Surly Brewing Company owner isn’t so eager to return to the capital city.
“I like going there as little as I have to,” Ansari admits. “It’s just a whole different world than brewing beer.” While Ansari busies himself settling on a location for Surly’s own much-anticipated “destination brewery”—a decision had yet to be made at the time of publication—other members of the local craft brewing community are hoping to score some legislative victories this year.
The most dominant issue likely to emerge in the coming legislative session will be a push to allow retailers to sell alcohol on Sundays, something that is permitted in each of the states surrounding Minnesota. Other issues on the table include a push to open new distribution channels for brewpubs and to remove a production cap that limits larger breweries from selling growlers.
Here’s a quick primer on each issue.
Efforts to repeal Minnesota’s law barring alcohol sales on Sunday have been a perennial non-starter at the Capitol. But that hasn’t stopped the Minnesota Beer Activists from putting it atop their legislative agenda, or for supportive retailers to make plans to drum up support this year.
Observers say the bid to change the law, while not impossible, will be a particularly hard sell. The challenge comes in part because retailers themselves are divided over the issue. The Minnesota Licensed Beverage Association (MLBA), says its vast network of small, independent beer stores is almost universally against the change. A powerful force at the capital, the group says allowing Sunday sales would force store owners to make an unwanted switch to a seven-day business plan, while only spreading six days of profit over those seven-days (stores would not have to open on Sundays, but the groups says the decision would essentially be made for store owners who want to remain competitive).
More potently, the association’s leadership says Sunday sales would give grocers and convenience stores that sell 3.2 beer (a remedy for Sunday drinkers with an empty fridge) an opening to push for full alcohol sales. If allowed, that shift would devastate many of the state’s small, independent liquor retailers, according to Frank Ball, the executive director of the MLBA.
Jason Alvey, the owner of Four Firkins, is on a mission to debunk those arguments. With consumers seemingly in his corner (a June poll by the Public Policy Polling showed Sunday liquor sales were favored by a 59-27 margin), Alvey says he hopes to team with other supportive retailers to educate his peers that opponent’s fears are overblown and that lifting the Sunday ban would be good for a retailer’s bottom line. Aside from the revenue he says is being lost, Alvey claims the issue is about principle and allowing him to run his business the way he sees fit. “I should be able to choose when I want to open my store, just like every other retailer can in Minnesota,” he says. “It is extremely frustrating to me that on potentially one of our biggest trading days, I am forced to be closed by a ridiculous, outdated, frankly embarrassing law that is more than 60 years old.”
Sen. Roger Reinert, DFL-Duluth, introduced a bill last year that would have allowed Sunday sales and, while it stalled, he says he has every intention of making another bid this year, assuming he is re-elected.
Town Hall Brewery owner Pete Rifakes expects to brew at least 1,600 barrels of beer this year, but he believes there’s enough demand for him to double the amount being made at his Minneapolis brewpub virtually overnight. Unless state law changes, though, his only means of growing distribution are opening new restaurants (his West Bank brewpub has already spawned a south Minneapolis outpost), splitting the restaurant and brewery into separate businesses or converting his brewpub into a brewery, a move that would force him to give up selling wine, liquor and guest beers. Rifakes says the first option is costly and full of risk, and that the others would mean upsetting an established and profitable business, and underutilizing valuable real estate.
So Rifakes hopes the state will instead lift a law that keeps brewpubs like his from selling their beer at other restaurants or through third-party retailers, as brewpubs are allowed to do in Wisconsin and other states. Rifakes, as well as the owners of Duluth’s Fitger’s Brewhouse, have spent years pressing for the change without success. To win this year, brewpub owners will have to overcome arguments that the law change would disrupt an alcohol distribution system that seeks to separate the production, distribution and sale of beer (the “three-tier system,” as those familiar with the rules call it) and fears that the switch would allow large breweries to make the case that they too should be allowed to act as retailers (a commonly recited example posits that Anheuser-Busch could buy a chain such as Applebee’s, and use the outlets to distribute their beer).
Rifakes says those fears are overblown, and that the change would benefit not just his business, but all Minnesota brewpubs struggling to succeed and grow despite having limited distribution channels. He says it could also open the door to more brewpubs in the state—something he believes is critical for the region’s craft beer industry to reach new audiences.
“We got into the business knowing the restrictions of the law, but now laws have evolved in states around us and, because Minnesota has been slow to change, businesses like ours are in a difficult situation,” he said.
State Sen. Sandra Pappas, DFL-St. Paul, has worked with Rifakes in the past, but Rifakes said in September that he’d yet to connect about making a legislative push again this year.
Stillwater’s Lift Bridge Brewery, which celebrated its fourth year in September, is approaching a milestone most young breweries would like to celebrate: the production of 3,500 barrels of beer a year. Dan Schwarz, the co-owner and chief executive at Lift Bridge Brewery, views the number instead with apprehension. That’s because state law prohibits breweries that produce more than 3,500 barrels of beer a year—a number Lift Bridge will come near to this year, and likely surpass in 2013—from filling growlers with their libations. “If we do 3,501 barrels, then we lose that revenue stream,” Schwarz says.
Lift Bridge may be in a unique class now (Minneapolis’ Fulton Brewery is also near the tipping point) but Schwarz believes other small breweries will find themselves in the same predicament as their popularity and production grow. His hope now is that the state will raise the production cap, or at least agree to a compromise that would allow him to sell growlers until Lift Bridge reaches its 3,500-barrel limit. While the law was designed to give small breweries an edge, Schwarz says it now threatens to inhibit their growth and hurt consumers.
Schwarz says he has yet to begin the delicate work of finding a lawmaker who will carry the cause, but that he believes the idea is something of a no-brainer. “It’s a small business bill, a jobs bill, and it’s really a no-cost item,” he said. “The state doesn’t have to do anything but sweep a pen.”
Photos by Aaron Davidson