When the state legislature returns to regular session Feb. 2, it will be considering some small changes to laws regulating alcohol sales. But while some are praising the news, others think much more needs to be accomplished.
For the better part of 2015, the Alabama Alcoholic Beverage Study Commission examined the state’s current laws governing alcohol production and distribution to determine if they were “competitive and consistent” with similar statutes in other states.
Most breweries, wineries and distillers claim they currently aren’t, but if the changes recommended by the AABSC are signed into law by the governor, it would be a step in the right direction.
After months of discussion and three public meetings — including one in Mobile — on Jan. 12 the AABSC released a handful of recommendations to ease regulations specific to the types of alcohol produced, distributed and sold in Alabama.
If adopted, breweries “producing less than 60,000 barrels of beer yearly” will be allowed to directly sell up to 288 ounces to consumers for off-premise consumption and donate up to two kegs for charitable events without using a third-party distributor.
Additionally, Alabama’s wine producers would be permitted to establish “a single off-premise site for retail sales,” while spirit producers would gain the ability to sell up to “a fifth of liquor per consumer for off-premises consumption” in a calendar year.
“Alcohol laws are complex, and analyzing them to ensure that Alabama’s laws are competitive nationally is a daunting task,” Dan Roberts, executive director of the Alabama Brewers Guild, said of the proposed changes. “We are confident that the commission’s recommendations will go a long way in helping Alabama remain competitive in the burgeoning industry of craft beer.”Locally, Fairhope Brewing Co. fits into the “less than 60,000 barrels” category, meaning customers may soon be able to buy bottled beer from the brewery directly in order to enjoy it at home, instead of through a retailer or being served in the taproom across the bay.
“We have had visitors from all 50 states in our taproom over the last three years, and in at least 45 of those states, growlers [beer containers] from breweries are commonplace and an expected part of the experience,” James Foley, a managing partner at Fairhope Brewing Co., said. “For years we have had to disappoint the customers who walked in, growler in hand, but if this recommendation becomes law, we will be able to happily accommodate.”
While Foley said growlers would result in “a nice little boost in revenue,” he noted he’s more excited about how the additional volume will allow the brewery to make “more fun, experimental and unique styles” of beer.
“The bottom line from our point of view is that everyone will win with these recommendations, especially the breweries and our customers,” Foley added.
When it comes to alcohol sales in Alabama, though, “everyone” also means the distributors that producers of any kind of alcohol are required by law to employ before their products can hit retail store shelves.
Public records from the AABSC suggest distributors and the state’s growing number of craft brewers had to reach a compromise, which was acknowledged by the Alabama Beer Wholesalers Association in a news release after the recommendations were finalized.
“Inter-industry coordination is not easy, and we applaud the committee on facilitating a great compromise that is agreeable to both small brewers and wholesalers,” ABWA Executive Director Donna Alexander said. “Alabama beer wholesalers will continue to support the growth of the dynamic craft beer industry, and we will work together with our industry to ensure that Alabama consumers continue to have choice and variety in the marketplace.”
Reaching a compromise was part of the committee’s challenge, and ultimately the Brewers Guild backed away from some loftier proposals, including one to allow small breweries to self-distribute.
Those restrictions are part of the “three-tier” system governing alcohol sales in the state — tiers representing manufacturers, independent distributors and retailers. Despite being positive about new regulatory changes in the legislature, Foley said he believes the entire three-tier system “was never going to change.”
“Many if not most breweries are fine with that. We knew the rules when we started,” Foley said. “We are in the business of brewing beer — not the sales, logistics and shipping business that distributors specialize in.”
Meanwhile, Alabama’s wine industry doesn’t seem to be feeling the same buzz.
In public comments submitted during the study, the Alabama Wineries Association said requiring the use of a distributor is bad for small wineries because “they aren’t interested in promoting the brands, they only stock and deliver to retailers.”
The association originally suggested allowing “additional locations for wine tastings to create a demand for the product,” until a wholesaler had a sufficient volume to deliver. However, that suggestion was struck from the final recommendations, just as a bill with the same goal died before approval by a legislative committee during last year’s regular session.
About an hour north of Fairhope, Jim Eddins, owner of Perdido Vineyards, described the potential changes as “three crumbs that fell from the $1.5 billion beverage banquet table.”
“Since the repeal of the Alabama Native Farm Winery Act in 2001, Alabama licensed wineries have worked exceedingly hard to survive the adverse economic impacts of three-tier,” Eddins wrote Lagniappe via email. “The recommendation to allow a winery to establish a satellite retail store recognizes that wineries and vineyards are in rural areas and their consumers are in urban areas.”
Eddins went on to claim most states do allow wine producers to sell their products directly to customers from multiple retail locations. However, he said the recommended change was important, “provided [a winery has] the money to establish a satellite operation.”
The six-member AABSC was co-chaired by State Rep. Alan Harper (R-Northport) and State Sen. Paul Sanford (R-Huntsville), neither of whom immediately returned calls for comment.
However, in a prepared statement, Harper previously described the recommended changes as a “first step toward improving our alcoholic beverage laws in Alabama.”
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