For politicians who talk a lot about creating jobs and growing the economy, the members of the Senate Business, Labor and Economic Affairs Committee sure have some explaining to do. On Tuesday, instead of supporting a burgeoning industry, they gutted a bill aimed at allowing Montana’s breweries to meet the growing demand for craft beer. The amendment, in fact, might force one of Missoula’s breweries to close one of its taprooms.
The original version of the bill was a sterling example of bipartisan cooperation from two Missoula legislators: Republican Rep. Adam Hertz and Democratic Rep. Ellie Hill. It would have raised the allowable production limit for breweries that operate a taproom from 10,000 barrels to 60,000 barrels.
The representatives of the House found the original version of House Bill 541 reasonable, and approved the bill 85-14 on its third reading. The Senate Business, Labor and Economic Affairs Committee, unfortunately, had other ideas, and voted 7-3 for an amended version that would raise the limit by just 2,000 barrels – a pittance that offers no incentive at all to growing breweries.
The arbitrary limits on Montana’s breweries is a discussion we’ll leave for another day. Suffice to say to say that they operate under much stricter rules than bars and restaurants. Breweries, for example, must undergo complex machinations to purchase a license to sell beer and wine; they have curtailed hours and must stop serving by 8 p.m.; and they even have limits on how much they can serve (48 ounces per customer per day).
The laws seem expressly designed to stifle the growth of this one industry. Nevertheless, the popularity of craft beer has soared over the past decade, and new breweries and taprooms have sprouted throughout the state. In fact, at last count, the Brewers Association ranked Montana No. 3 in the nation for its number of craft breweries per capita. Missoula alone counts at least eight.
With so many craft beer fans drinking up their product, it’s little wonder that some of most well-established breweries are bumping up against their 10,000-barrel production cap. Unfortunately, under current law, if they exceed this number they must close their taprooms.
Why does Montana have any cap at all? Doesn’t that just stifle competition? Does a law that forces growing breweries to lay off their taproom employees make any sense?
The Montana Tavern Association seems to think so, and has taken every opportunity to oppose legislation that would allow breweries to grow. It’s worth noting here that the Senate Business, Labor and Economic Affairs Committee chair, Sen. Ed Buttrey, owns a bar.
Perhaps that’s why the amendment to House Bill 541 feels almost like punishment – a message to breweries that if they dare try to grow, they will be slapped down.
It might actually punish one brewery in particular. Missoula’s KettleHouse Brewing sent out an urgent message to its customers on Facebook, alerting them to the possibility that the new rules could force the business to shut down its Northside taproom. KettleHouse is the maker of Coldsmoke, and operates from two locations in Montana under a complicated ownership system designed to work around the restrictions on beer production and licensing. The new version of HB 541 adds language that would make such workarounds untenable.
It should be clear that the current limits – or even a 2,000-barrel increase – are not working for Missoula’s most popular breweries. Big Sky Brewery, the makers of Moose Drool, makes a lot more than 10,000 barrels of their beer, and therefore is not allowed to sell beer on its premises. So it gives beer away for free in its tasting room. Not only has this cost the company an estimated $4 million, it has cost the state tax revenue it could have collected had the business been allowed to sell its product on-site.
Missoula’s Bayern Brewing, too, is limiting its production to less than 10,000 barrels because it doesn’t make sense – financially or from a customer loyalty standpoint – to make more and close its taproom.
The amended version of HB 541 will now go to the Senate floor. The original version of the bill made a lot of sense. The amended version is a job-killing, competition-stifling, anti-business bill. Every craft beer fan in western Montana should contact their state senators and tell them so.