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Cans are filled with the popular Cold Smoke beer recently at Missoula’s Kettlehouse Brewing Co., where the brewery announced Thursday that it will begin pulling its products out of some Montana markets in order to keep production under the 10,000-barrell limits and continue to serve the Missoula market and local taprooms.

Fans of Kettlehouse Brewing Co.’s beer will soon be hard-pressed to find the brews in several major cities around Montana.

The Missoula-based brewery announced that due to its inability to meet demand in Missoula and Bozeman, it will begin pulling its products out of Helena, Kalispell and Great Falls. Kettlehouse owner Tim O’Leary posted a letter explaining the “terrible decision” Thursday on the brewery’s website.

“Our drawdown will start in March. The reason is we’re selling so much beer in bars, restaurants and stores in Missoula and Bozeman that we can’t keep ourselves under the 10K (barrel) limit that allows us to operate our taprooms and charge for beer,” O’Leary wrote.

No doubt a topic of conversation Friday in bars across the state, the announcement also spurred an Internet outcry from Kettlehouse fans in the affected cities.

“Life, as I know it, is over. Signed Heartbroken in Great Falls,” wrote one fan on the Kettlehouse’s Facebook page.

“Whoa, whoa, whoa! this sucks ... #pleasedonttakemycoldsmoke,” another said on Twitter.

Montana law limits microbreweries that sell their beer on-site to a yearly production of 10,000 barrels. Kettlehouse has been butting up against that limit for the past several years, as the demand for its Cold Smoke Scotch Ale has skyrocketed.

Organic growth into cities like Helena, where O’Leary grew up, built a strong Kettlehouse fan base around the state. Calls for Cold Smoke in Billings and into neighboring states are almost constant, he said.

Silver Star Steak Co. in Helena sells Cold Smoke at its bar. General manager Jeff Hiel said the news will disappoint customers.

“I sell quite a lot of it. I’d say I go through five kegs a month. That’s a lot. The only beer that’s selling any more is the local Blackfoot,” Hiel said.

Hiel has seen customer interest in craft brews rise in the recent years.

“I can’t say I blame them. I can’t believe the state puts that limitation on it,” Hiel said.

Hiel was planning Friday to call Gusto Distributing to check on the availability of Cold Smoke.

“If they have five barrels, I will just buy it all,” he said.

The risk of alienating Kettlehouse fans in Kalispell, Great Falls and Helena pains O’Leary. But in the end, an allegiance to the Kettlehouse’s birthplace and it’s uber-popular taprooms here trumped continued service to other cities. Even if Kettlehouse switched to brewing Cold Smoke alone, the demand couldn’t be met under the 10,000 barrel limit, he said.


“We are unwilling at this time to close down our taprooms and risk alienating ourselves from our core market of Missoula supporters who got us here in the first place. I call it ‘selling in.’ If we closed our taprooms, our Missoula base could say we ‘sold

out,’ ” O’Leary wrote in the letter on his website.

O’Leary said his job description now will entail meeting with industry members to see how to revise state laws to help everyone. Eventually, he’ll take the fight to the 2013 Montana Legislature.

“If we can remove this 10K (barrel) hurdle, we’ll get back into these markets and even expand into Billings and eastern Montana,” he wrote in the online letter.

He stressed that he wants to grow Kettlehouse’s wholesale business, not its taproom sales.

“I personally like the taproom model, it encourages moderation, it works well with our bar taprooms,” O’Leary said.

Striking a balance that pleases Montana wholesalers, tavern owners and brewery owners is key, he said.

O’Leary was one of many who helped design legal guidelines for brewery operations in 1995, when the thought of producing 10,000 barrels seemed fanciful and was a way to protect smaller startups from domination by big breweries.

The only brewery in Montana the exceeds the 10,000 barrel limit is Missoula’s Big Sky Brewing Co., which gives free samples of its beer and sells growlers in its taproom.

Montana Brewers Association executive director Tony Herbert said many breweries here are either in the startup phase or well under the 10,000 barrel limit. Still, the Montana limit is far below that of many other states where craft brew is popular.

“It’s an awesome industry we have under way here in Montana,” he said. “Tim is a great example of that ... We have others that are kind of following in their footsteps; this is an industry that needs to be worked on to be able to make progress.”

Any lobbying by the association at the 2013 legislative session will concentrate on doing what’s best for the entire industry, Herbert said.

In the meantime, Kettlehouse fans will have to travel to Missoula or Bozeman to get their fix. Online, many express support of the allegiance the brewery showed to its home city.

“I live in Helena and am a big Cold Smoke fan ... but agree you’re doing the right thing. My husband and I always visit your taprooms when in Missoula, which is fairly frequently. We’ll see you there and wish you luck with new legislation next session,” one fan wrote.

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