Montana Lawmakers Loosen Taproom Restriction

Austin Ray

THE GIST
Montana lawmakers have passed a bill to free up another lane for brewer growth. Having cleared its final legislative hurdle en route to the governor’s desk on Thursday, HB 541 will enable the state’s breweries to produce up to 60,000 barrels per year while still operating a taproom. To date, brewers with taprooms have been limited to producing 10,000 barrels annually. (Brewers were always able to exceed the production cap, but on the condition that they had to shut down their taprooms, an important profit engine for many businesses.)

WHY IT MATTERS
Montana brewers have been fighting for a good while for this change, but have repeatedly run into roadblocks set up for various reasons by various industry stakeholders.

In 2015, the state’s distribution lobby stood in the brewing industry’s way, but not for the typical reasons we’ve come to expect in cases like these. Rather, wholesalers were fine with the lifted cap (the proposal was for 60,000 barrels then, too), but were opposed to a provision that would’ve enabled brewers to acquire liquor licenses. This time around, the state’s bars and restaurants took issue with the push for reform, but ultimately withdrew their opposition when lawmakers added language to limit the number of taprooms breweries could operate to three. So now that the state’s beer industry has finally pushed a taproom production cap bill through, the state’s brewers guild is calling it “the most important legislation we’ve seen for Montana’s craft brewing industry in 18 years.”

“The Legislature has signaled a green light for Montana breweries to grow, giving breweries the confidence to make investments to expand their production,” says Matt Leow, executive director of the Montana’s Brewers Association, in a press statement. “That means more jobs, increased demand for Montana-grown barley and greater access to Montana beer.”

Beyond affording smaller brewers the chance to grow, the bill enables the state’s larger breweries to now add a taproom, should they choose to do so. This could prove hugely profitable for the state’s established breweries. As Neal Leathers, co-founder of Missoula’s Big Sky Brewing, put it in 2015: “If we’re selling a keg of beer to our wholesalers for $80 or if we sell it at $4 a pint, it doesn’t take a whole lot of math [to figure out how much more money we’d make].”

This wasn’t the only beer bill up for debate this session in Montana, however. There was also the so-called “road beer” bill, which sought to make it again legal for a car passenger to possess an open container. The House missed the deadline for general bill transmittal on that one in March.

—Dave Eisenberg

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Montana Brewers Get Green Light For Growth [Montana Brewers Association]