February 6, 2015

Arizona Beer Bill: Something to Fuss Over

Rob FullmerSure, the Budweiser Super Bowl commercial mocking the craft beer scene got all our panties in a bunch, but it's time to move on. That commercial may have garnered Budweiser some attention, which was likely their plan anyway, but it's not going to stop you from fussing over and dissecting that delicious craft beer in your fridge. What you really need to start fussing over is SB 1030, the Arizona Beer Bill.

A lot of us already know the gist of the bill, but it's important to really get an intimate knowledge as to why it's so important to the future of craft beer in Arizona.

WHAT: The Arizona Craft Brewers Guild and Beer and Wine Distributors of Arizona have drafted legislation that allows microbreweries to grow beyond the current 40,000-barrel limit, but, most importantly, does not cause them to forfeit the retail licenses they hold or let go of employees. Doing so will promote growth in the industry while strengthening the three-tier regulatory system. The current production cap should be updated to reflect the incredible growth of this industry and the enormously positive economic impact of microbreweries.

To provide further stability, microbreweries under the 40,000-barrel limit will be limited to holding a total of seven retail licenses, while today they can hold an unlimited number. Craft brewers producing over 40,000 barrels may not add more retail licenses or continue to self-distribute unless to their own adjacent retail licenses. Additionally, the bill will allow microbreweries to sell beer produced or manufactured by other microbreweries for on-premise consumption, but cannot exceed 20% of the licensee’s annual sale of beer on the premises.

WHY: The current law, which is pretty ancient in nature, needs to be updated to enable our microbreweries to continue their success and make Arizona competitive with other states like California, Colorado and Oregon. Breweries big or small need legal stability and certainty that will give them the freedom to expand beyond 40,000 barrels without having to worry about what's going to happen to their restaurants, pubs and employees. Granted, this stability may initially only apply to a couple of the larger main players in the state (i.e., Four Peaks), but with the rapid growth in the beer industry these past few years, it's just a matter of time until others will face this current 40,000-barrel issue.

THE SUPPORTERS: The bill is fully supported by all 11 member companies of the Beer and Wine Distributors of Arizona, all 57 microbrewers who make up the Arizona Craft Brewers Guild, the many bars, restaurants and taverns that comprise the Arizona Licensed Beverage Association, along with other members of the alcohol industry.

THE NAYSAYERS: So who's opposed and why, you ask? The opposition is the Arizona Wine and Spirits Wholesale Association (AWSWA), which consists of Alliance Beverage Distributing, Southern Wine and Spirits and Young's Market. What's disheartening about this is there are a number of well-respected breweries under the scope of these companies — Lagunitas, Anchor and bevy of Belgian beers, to name a few. Now, I'm not saying these breweries are opposed to the bill, but I'd be willing to bet said breweries wouldn't be too hoppy if they were based in this state.

As for why they're opposed, the AWSWA has cited concerns about how the bill would affect the integrity of the three-tier system. A concern they did not have when changes to the system last year positively affected farm wineries and microdistilleries, local industries that both the Guild and BWDA fully support. This double-standard reveals what their opposition is really about — marketplace competition. Additionally, those opposed have suggested our microbreweries have special privileges in that small breweries have the ability to own restaurants and pubs so that they can market their beer. This is utter bullshit. These are small businesses that are frequently family owned companies trying to break into a very competitive market. Most microbreweries produce less than 3,000 barrels of beer and are not a threat to the rest of the industry. In fact, the influx of microbreweries has helped create excitement for other producers, and has provided new products for distributors and retailers.

WHAT YOU CAN DO: There are a few things, actually. First, sign the petition to support the Arizona Beer Bill. Second, call or email your legislators and say that you are in support of the bill. They need to know that the craft beer industry is important to Arizona voters and vital to the local economy. Lastly, there will be a rally at the Phoenix Capitol this Monday, Feb. 9 — details are here.