Mississippi Brewers and Distributors Find Compromise on Direct Sales

Austin Ray

THE GIST
Mississippi brewers and distributors have come to terms on a proposed bill that aims to lessen a number of restrictions limiting what breweries and brewpubs are legally able to produce and sell in The Magnolia State. Chief among the agreed upon changes, the bill would allow for breweries that produce “no more than” 60,000 barrels per year to sell a limited amount for on-premise consumption, and increase the brewpub production cap to 2,500 barrels annually.

WHY IT MATTERS
Although the agreed upon terms hardly put Mississippi level with some of the craft friendlier states out there, the compromise highlights two different sides, too often at odds, coming together to better the industry. This is particularly important in the South, where battles between brewers and distributors often lead to lawsuits instead of dialogue. Yes, the changes proposed here are worth celebrating, but that’s not the paramount victory, for either side. For proof of that, hear it from Matthew McLaughlin, outside counsel to the Mississippi Brewers Guild:
 
“This bill is significant for many reasons. It will make Mississippi breweries more competitive in the rapidly changing and global beer industry, which will translate into capital investment and job creation for our Mississippi communities. But more importantly, this bill will strengthen the relationship between Mississippi breweries and their distribution partners.”
 
That relationship, of course, is tied to the three-tier system that—oftentimes imperfectly—keeps the beer flowing from tank to keg to glass. Further, that relationship is extremely delicate state by state and requires careful handling, particularly when it comes to negotiating terms of who gets to sell what and where. And considering just a few short years ago, Mississippi was home to only one craft brewery (and today still only counts a handful), it seems like it would’ve been easy for one side to steamroll the other. So if the two sides can play grownups there, there’s really no reason those two sides, embattled as they may be, can’t get it done everywhere.

(We’re looking at you, Georgia, as you'll be the only state in the U.S. that allows no form of direct sales for its beer makers if this bill passes in 2017 without a similar bill in The Peach State.)

A final version of the proposed bill won’t be drafted until later this fall, when the state’s legislature will mull it over. But for now, a complete breakdown of the agreed upon terms also calls for the removal of food requirements at brewpubs, requires breweries to pay excise taxes on all beer sold through taprooms, and for off-premise consumption, and caps annual tap room and off-premise sales at 10% of annual production or 1,500 barrels (whichever is less).

—Dave Eisenberg
 
READ MORE
Mississippi Craft Brewers and Mississippi Beer Distributors Agree on On-Premises Sales Bill [Jackson Free Press]