HJ18 Passes House Business and Labor Committee Unanimously

Posted On March 28, 2013

At 8 AM on Thursday, March 28, our resolution to study alcohol licensing laws in Montana passed the House Business and Labor Committee. After the addition of some clarifying amendments, made by sponsor Christy Clark (R-Choteau), the measure easily made it through on a 19-0 vote. Now HJ18 will move on to the House floor, and is very likely to heard sometime during the first week of April.

This a very big step for Montana, as it sets the stage to review alcohol licensing laws that have been under great scrutiny and pressure by virtue of the current successes in Montana’s craft brewing industry. This review process will provide adequate time and the proper framework for industry members including retailers, manufacturers (brewers, distillers, and wineries), and distributors to develop long term solutions with the aid of a legislative panel.

Also, the committee postponed executive action on the  MTA’s 60/40 bill, HB616, sponsored by Roger Hagan. Rep. Hagan said that questions had arisen regarding some of the legal underpinnings of the bill. He handed out a legal opinion from the MTA’s attorney, stating that the bill didn’t have any conflict with federal regulations. Rep. Hagan also requested that executive action on the bill be delayed until Wednesday, April 3 and was granted this delay. However, after the hearing a contradictory opinion was released from the Department of Revenue.

The Department of Revenue stated that HB616 in its current form “raises a significant risk of a dormant commerce clause-based lawsuit in Federal Court.” So the bill that created the impetus for HJ18 now has a fairly significant legal issue. A striking example of the unintended consequences that accompany 11th hour ideas that have not had time to be fully researched.

The Montana Brewers Association thanks each of you for all the support you have provided during this legislative process thus far, and your passionate support of  HJ18.  Alas we aren’t done yet, and the MBA continues to need your help. Please take a moment to send a thank you note to the committee members (emails below) for their sensible vote and their continued support of our great industry! Please ask them to resist HB616 and to work with all members of Montana’s craft brewing industry in the study resolution process.

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Montana tavern owners battling with beer brewers

Posted On March 27, 2013

AP Photo/Matt Gouras

Rep. Roger Hagan introduces his bill to place limitations on the expanding retail craft brewing industry on Tuesday in Helena.

Tavern owners faced off against craft brewers at the Capitol on Tuesday, arguing that the upstart competition has been allowed to unfairly flourish with too few restrictions.

Both sides packed a state House Business and Labor Committee hearing looking at two bills.

One brought by the tavern owners, House Bill 616, would put new licensing requirements on the brewing industry. The tavern owners argue that some breweries have grown into full-scale retail establishments not envisioned by the original law that allows tasting rooms.

Another bill to study the issue, House Joint Resolution 18, was backed by brewers who said more conversation is needed to fairly reconcile differences.

Rep. Roger Hagan, R-Great Falls, said stricter restrictions are needed on the brewers. He said brewers are taking advantage of laws, revised in the late 1990s, that allowed the breweries to retail beer sell up to 48 ounces of beer a day to customers before 8 p.m.

He said that law was intended to let wholesale breweries offer a little taste to retail customers. The lawmaker argued that some breweries now sell almost all their product to customers and resemble bars.

Tavern owners testified that they enjoy selling locally made beers to customers. They argued that unfair retail competition from the breweries, however, is limiting the availability of such beers for the retail bars.

Hagan’s bill would require many retail breweries to buy a new state license for $100,000. Wholesale operations would not need the license.

The bill received support from one large brewery, Big Sky Brewing Co. in Missoula, which said it is too large and exceeds production limits to open a tasting room under the current law. The brewery supported the way the new bill would allow it to open a tasting room with the new special license, or perhaps even buy an all-beverage license that would allow expansion perhaps into food or other businesses.

But the rest of the brewers in the state opposed the law. They argued it would stifle growth in the industry.

The brewers are instead suggesting a two-year study with the aim of producing new rules that everyone can support. They said Hagan’s bill is being wrongly sold as a way to help the industry expand with new licensing rights.

Farmers who sell grain to the breweries and customers who enjoy the beer also opposed the bill.

“It was crafted by the Tavern Owners Association, and it is meant to benefit the Tavern Owners and it will crush many of the small-town mom-and-pop breweries in Montana,” said Helena attorney David Hull, who said he enjoys the breweries.

Hull argued tavern owners get a lot of extra rights with their liquor license, including the ability to sell all beverages and profit from gaming.

The breweries argued that they don’t want the rights to those businesses and enjoy the current model that limits hours and consumption. Many of the very small brewers said they have built modest retail business plans that would be jeopardized under the proposed bill.

“It is flawed in many ways and it would put us out of business,” said Rob Jarvis of Philipsburg Brewing.

The committee did not take immediate action on either bill.

Brewery Bills to be Heard Tuesday, March 26th

Posted On March 21, 2013

OPPOSE HB616:

• You support the craft beer industry in Montana and want to preserve it, and do not want to see further unwarranted restrictions.
• HB616 will limit small brewers’ access to markets and create barriers to grow their businesses.
• HB616 will kill jobs in small main street businesses in Montana, and limit market entry.
• Buying into the current quota system by purchasing licenses is not the end-all answer to how manufacturers should be treated in the alcohol code.
• HB616 comes to them without the proper consideration of all parties and that the subject is too important to make decisions without all the facts.
• Montana Distributors also oppose HB616.

SUPPORT HJ18:

• HJ18 provides a balanced, sensible approach to review the very complex licensing system in the Montana, and is preferable to HB616.
• Time is needed for all parties to look at the many alternatives to determine how brewers are treated within the licensing system.
• Such a review has never been done and could yield many beneficial recommendations to the next legislature.
• HJ18 is supported by craft beer fans around the state as the proper way to address these issues.
• HJ18 will create an opportunity for all parties including retailers, distributors,
• manufacturers, economic development, tourism, agriculture, and the public to be heard in the process.
• Montana Distributors support HJ18.

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LET YOUR VOICE BE HEARD

MBA Develops Resolution to Review Montana’s Restrictive Alcohol Control Laws

Posted On March 19, 2013

Montana Brewers Association continues to resist further limitations to Montana brewers being sought by the Montana Tavern Association in Roger Hagan’s bill LC1429. Though the language still has yet to see the light of day, recent proposals by the MTA would dictate that existing breweries could now purchase beer/wine licenses for $100,000, while at the same time barring brewers from selling their beer on premise if they manufacture over 300 barrels of beer per year without further retail restrictions. Also, new entrants to the market would not have access to these specially released licenses, and current tap room laws would be further limited by requiring all patrons to be out of the building before 8 PM. I guess they have decided that popcorn in sample rooms can stay legal.

Believing all along that there had not been the adequate discussion among the industry members, and with the help and support of Rep. Christy Clark (R-Choteau, and House Majority Whip), we have created a House Joint Resolution 18 which would create a legislative interim study regarding aspects of Montana alcohol control laws involving licensing of retailers, brewers, distributors.The alcohol control system is complex indeed, and time is needed to research these issues and the many alternatives available to the state in order to really move forward with this issue. We believe that taking time to study these complex issues will help us develop comprehensive solutions that Montanans deserve. We have come to realize that in order to bring the members of this industry to the table and have constructive discussions, we will have to do so in this more formal manner with the assistance of the legislature.

Included in HJ18 would be interests from the retailers, distributors, manufacturers, while also taking input from tourism, agriculture, economic development, and regulators. We have found immediate and excellent bipartisan support for HJ18. Furthermore, the Montana Beer and Wine Distributors Association, and the Restaurant/Retailers Association have also chosen to stand behind this interim study. You can find the language of the resolution and follow its progress through the Capital on the LAWS system here.

Currently, HJ18 has been referred to House Business and Labor Committee and is due for a hearing in the coming weeks. Please thank Rep. Christy Clark for sponsoring HJ18, and Rep. Ellie Hill (D-Missoula) for letting us use her placeholder bill request. Please call your legislators and tell them to vote YES for HJ18 and its sensible approach, and to vote NO for LC1429, the Montana Tavern Association’s 60/40 bill. Tell them that LC1429 is wrong for Montana, and HJ18 is needed to move forward. Operators are standing by to take your calls at (406) 444-4800.

Be sure to stay tuned! More important updates on both LC1429 and HJ18 will be arriving on our Facebook and in your inbox!

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Check out some great editorials in support of Montana Breweries:

Montana Craft Brewing Under Attack
– Missoulian –

Tavern Association Proposal Would Kill Local Breweries
– Billings Gazette –

If you are passionate about the future of Breweries in Montana, get involved and write an editorial in your local paper to support our wonderful industry!