Several Minnesota laws related to alcohol were up for discussion at the House of Representatives on Monday under a liquor omnibus bill approved by the Senate in early April. The bill included provisions related to craft breweries, microdistilleries, and farm wineries; however, an amendment successfully introduced by Rep. Debra Hilstrom (DFL–Brooklyn Center) removed most of them from consideration. The bill was then tabled by its House sponsor, Rep. Joe Hoppe (R–Chaska).
Where the legislation goes from here is unclear. “By laying it on the table, the bill can be taken back up at any time,” Rep. Hoppe’s legislative assistant said in an email. “More discussion will occur with members to see if there is interest in giving microdistillers and small breweries more room to grow. Since the House is still in session, there hasn’t been much chance yet to discuss how to move forward.” Because the House version of the legislation is now different from the version passed by the Senate, the two bills would need be reconciled before moving forward, which could be accomplished in a variety of ways, including through a conference committee.
In introducing her amendment, Rep. Hilstrom categorized parts of the bill as undermining the three-tier system and a threat to mom and pop liquor stores.
“This is a legislative attempt to take market share from liquor stores and give it to local breweries and distilleries,” she said.
Dangerous Man co-owner and Minnesota Craft Brewers Guild secretary Sarah Bonvallet said the provisions in the bill related to breweries were proactive steps that would have put the industry on a path for continued growth.
Despite their future being unclear due to the bill’s status in legislative limbo, it’s still worth noting the provisions related to microdistilleries and breweries that were removed by Rep. Hilstrom’s amendment.
The bill sought to raise the limit on the amount of beer breweries could sell directly to consumers for off-sale consumption from 500 to 750 barrels annually, or from about 30,500 to 46,500 growlers, a threshold that could be problematic for Dangerous Man.
“We’re absolutely worried about bumping up against it,” Bonvallet said. “If we keep going at the rate we’re currently on we’ll be close to hitting that limit by October or November.”
Currently, Minnesota breweries that produce more than 20,000 barrels per year cannot sell growlers, a limit that Fulton Brewing and Third Street Brewhouse exceeded last year. The bill sought to double that number to 40,000 barrels, which would have allowed Fulton to begin selling growlers again, but the state’s largest brewers, including Third Street, Surly, Summit, and Schell’s, would still have been over that threshold.
Rep. Hilstrom said the change would have been a threat to liquor stores and an attempt to move growlers from more of a souvenir and marketing tool to a replacement for packaged products at the consumer level.
Indeed Brewing co-founder and Minnesota Craft Brewers Guild president Tom Whisenand said that argument couldn’t be further from the truth. He used Indeed as an example: The Northeast Minneapolis brewery is on track to brew about 16,000 barrels of beer this year, about 180 barrels, or 1 percent of which, will go out of their doors in growlers. Indeed’s sales through traditional distribution grew by 21 percent in 2016, while growler sales have remained flat since they began offering them. Despite growlers being a small part of Indeed’s overall revenue, Whisenand said they’re an important part of the overall customer experience for craft breweries, which is why he’s concerned about the potential for his brewery and others to lose the ability to sell them as they grow.
The legislation would have also removed the limitations on vessel sizes that currently require growlers or beer sold for off-site consumption to come in either 64 ounce or 750 milliliter containers. Under the language in the bill, breweries would have been able to sell or fill any vessel between 650 milliliters (21.9 ounces) and two liters (67.6 ounces).
For microdistilleries, the bill would have removed the provision that currently limits the distillers from selling more than one single 375 milliliter bottle per customer, per day, in their distillery cocktail rooms. The bottle size requirement would have been removed completely, and microdistilleries would have been able to sell up to 8,000 gallons of spirits in their cocktail rooms for off-sale consumption each year.
The provisions of the bill that remained intact after Rep. Hilstrom’s amendment include one that allows microdistilleries to operate cocktail rooms on Sundays (though they’d still be prohibited from selling off-sale products on Sundays), and a new requirement for microdistilleries wishing to operate cocktail rooms, which states at least 50 percent of their annual production must be processed and distilled on premises.
Farm wineries are allowed to produce and sell spirits directly to consumers, but a similar provision in the bill would require at least 50 percent of the distilled spirit to be processed and distilled on premises.
Finally, a provision allowing bars and restaurants in Hennepin and Ramsey counties to stay open until 4am during the 2018 Super Bowl weekend, specifically Feb. 2-5 pending local approval, was also left in the bill.
Stay tuned to growlermag.com for updates on this story as it continues to unfold.