Montana Bill To Allow License Stacking Ready for Introduction

One of the most heard statements in the taverns versus breweries turf war comes from a variety of tavern owners:  "If breweries want to act like bars, they should buy a retail licenses like we had to do."

As explained here, that's not legal under Montana law.  Montana subscribes to the three tier system (manufacturer, distributor, and retailer) and none of the tiers is allowed to also own a license from another tier.

That said, a minority of Montana breweries operate under a "closely affiliated" license model, where the brewery is separated from an adjacent restaurant/bar (sometimes only by panes of glass) and the license for the brewery and bar are held by members of the same family (literally and figuratively, depending upon the case).  This model works well in theory, particularly where licenses are inexpensive, but I'm told the accounting, legal fees and other costs are a gigantic pain in the ass.

One legislator, Representative Ellie Hill of Missoula, has drafted a bill that would allow license "stacking" to enable breweries to also own a retail licenses. Breweries would be allowed to own a beer/wine license or an all-beverage license, thus eliminating the 48 oz/person/day and 10 am to 8 pm restrictions.

The draft bill is LC 0653 and its status is "ready for delivery."  That means Representative Hill could introduce the bill at any time (though that time is running short for the 2013 Legislative Session). 

I'm guessing this bill does not get introduced.  I'm told the Montana Brewers Association is not very keen on it, though that's not confirmed.  I'm certain the Montana Beer and Wine Distributors Association would vehemently oppose it, since it messes with the principles of the three tier system.  And frankly, while it may sound good in the abstract, it is not a good solution.

Why? Let me count the ways.

• First and foremost, it gives brewery opponents more fodder for shutting down tap rooms.  Now that breweries could directly own licenses, one could argue the "small brewery exception" for onsite tap room sales needs to be eliminated or significantly restricted. It's why the Montana Tavern Association's second attempt at a tap-room killing bill is rumored to include license stacking.
• Ultimately, it reduces choice.  As long as Montana's quota system is in place, there is a finite number of licenses.  Each time a brewery purchases a license - either because it becomes legal to "stack" licenses, or chooses to go the "closely affiliated" license route - there is one fewer license to be used at a non-brewery bar or restaurant.  Thus, there is also one fewer place to sell Montana craft beer.
• It perpetuates a licensing system that creates value for a few license holders while decreasing competition and increasing turf battles in an industry that should be working together to foster growth. Since the bill does not increase the number of licenses, it creates more competition for existing licenses, thus driving up the value and potentially pitting breweries against other breweries who elect to maintain tap rooms.  

In the end, license stacking may help eliminate some of the pain in the ass of the closely affiliated license model, but ultimately does little to improve Montana's licensing system.

For all our articles pertaining to the 2013 Montana Legislature, click here. 

A Beer Ticker at Heart

For Valentine’s Day, I thought it worthwhile to make a steamy confession: I am a beer ticker. Yes, I am one of those beer geeks who likes to try a new beer and check it off. But I don’t think this an unpardonable sin. Instead, I see it as a service to craft beer, a necessary part of my craft beer journey.

You see, it all started well before I was of drinking age. I have always liked keeping lists. I kept lists for birds I’ve seen, cities I’ve visited, and the books I’ve read (currently sits around 427). There is something nostalgic about the lists themselves, something more permanent than the memory. For me, seeing an entry on the list ignites a fuller memory sense than when I don’t write something down.

I understand there is a dark side, though - the beer tickers that salivate at the thought of low bottle counts, chasing beer trucks and buying beer from friends’ bottle shops that never make it on the shelf.

And there are the ones who factor in, it seems, an extra sensory of the beers they drink – the rarity factor. The “it’s rare so it’s good” mentality can creep in casually or obnoxiously, as such is the case with “Sign Guy” in this article from The Growler.

Unfortunately, these beer chasers have shaped the beer market. Tighter market allocations, bottle limits, and “you-can’t-buy-Pliny-unless-you-buy-something-else-too” models (as Blackwell’s in San Francisco notably does), are now more commonplace. The question this raises for me is whether these models make it make it harder for the “craft beer noob” to get into craft beer without being overwhelmed. I think there is a risk of that happening.

But without these parameters in place there is risk of most of the beer going to only a few people, which does not serve the “noob” well either. Is there a middle ground? Perhaps, but that’s for future discussion.

Back to beer ticking. I recall being in Boulder a couple years ago as my craft beer enthusiasm was burgeoning. I printed off some “Top 50” craft beer list from the Internet and took it (a bit sheepishly I admit) into a local bottle shop. Graciously, the girl who ordered for the store didn’t berate or laugh at me when she spied beers like Darkness, Dark Lord, Westy 12, and Pliny the Younger on this list. Instead, she showed me the few she did carry, told me why I wouldn’t find most of them in a store and made recommendations for similar beers, and told me how I could run the gauntlet and get a pour of Pliny the Younger that was to be tapped in a couple weeks later (which I did, and it was delicious).

(first pour of Pliny the Younger, 2011)

I still have this list. I think I’ve checked off about 40 of the 50 on there. Today, however, I keep tabs on the beers I drink through more modern means (Untappd). Since I started tracking, my average is about one new beer a day (should I admit that?).

Keeping track makes sense of it all. I can look through my list when I walk into a bottle shop and know if I’ve tried this beer or that (especially when I may have had it on draft but now I see it in the bottle). To me, this ability gives new beers a “fair shot” for my attention. I’m more likely to try a new beer than repeat one I’ve had. It’s how I spread the love, so to speak. Perhaps I’m a polygamist for porters, smitten with saisons, amorous for American barleywines, rapturous for Russian Imperial stouts (ok, I’ll stop).

I’ll certainly come back to my favorites, but I’ve discovered many new favorites just by being open to new beers. I can also say with confidence that I’m glad I’ve tried many of the “great, hyped beers” and found that sometimes they’re just not all that. It’s made me more cautious seeking them out and able to subdue the whistles of the hype train.

So I think we can be beer tickers without being “Sign Guy.” We do it by embracing the idea that, in the end, it’s just beer and we’ll never be able to get to them all, but enjoy the ones you do get to tick. And, above all, share it when you can!

Happy Valentine’s Day!

Bill Seeks to Delete Grocery/Pharmacy Requirement for Off-Premise License

You may recall our earlier discussions about a bill introduced to the Montana Legislature in January which would create a new "boutique" beer/wine shop license category.  The previous bill would have allowed true bottle shops, but restricted their hours to 9 a.m. to 9 p.m. It did, however, allow such shops to have up to 12 tasting events.

When the bill came up for its hearing before the House Business and Labor Committee, the sponsor, Christy Clark, asked the committee to table the bill without providing any explanation, or responding to our request for comment.

It appears we now have our explanation.

Representative Clark is working on a new bill, LC 2078, which would eliminate the current language restricting off-premise licenses to bonafide grocery stores and pharmacies.*

A "bona fide" grocery story is one with $3,000 worth of at least three different types of items in each of these food groups: meats, vegetables, fruits, bakery items, dairy products, and household supplies.  While it is not difficult to hit the $3,000 mark, stocking, inventorying and selling meats, fruits, vegetables, etc. is far different - and a much bigger pain in the ass - that beer and wine. These  limitations prevent true bottle shops and causes store owners to carry items they might otherwise drop, but for the need to pretend to be a grocery store.

LC 2078 would eliminate the grocery store requirement - and place no limitations on the hours of operation  - from Section 16-4-115, MCA:

(1)  A retail license to sell beer or table wine, or both, in the original packages for off-premises consumption may be issued only to a person, firm, or corporation that is approved by the department as a person, firm, or corporation qualified to sell beer or table wine, or both, and whose premises proposed for licensing are operated as a bona fide grocery store or a drugstore licensed as a pharmacy have received approval from local building, health, or fire officials.

I'm not a fan of the proposed new language (the underlined portion) because it creates an ambiguity.  What if fire officials approve it, but the health department doesn't? Does "local" mean a city, town, or county, but not the State? (State building code requirements kick in where there are no local city or county building codes.) Plus, it suggest the building, health, or fire officials have some say in whether a beer and wine store is appropriate, rather than limiting it to safety compliance issues.

At the very least, it would be good to change this language to read "whose premises proposed for licensing meet all applicable building, health, or fire regulations."

Frankly, the new language is entirely unnecessary because Section 16-4-115, MCA, already requires the Department of Revenue to determine whether "the applicant's premises are suitable for the carrying on of the business." Thus, my preference would be to eliminate the proposed new language.

Though I may be getting a bit technical, I'm not nitpicking here.  Ambiguous language in statues is far too common.  It is also the kind of thing that trips up good bills like this one, particularly where the State will now have one more requirement to check off before issuing an off-premise license. 

The bill is in the final drafting stages. [Edit:  The bill was introduced on February 18 and is now known as House Bill 524.]


For all our articles pertaining to the 2013 Montana Legislature, click here.
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* Certain bars and breweries may also sell beer and wine for off premise consumption, but that's a whole different topic.

Brew-On-Premise License Dies in Montana Senate

The Montana Department of Revenue's effort to create a new brew-on-premise license was moving along with little trouble until it hit the Senate floor for its second reading on Friday, Feb. 8.  The department sought to enact a licensing scheme for businesses which rent equipment to persons who want to brew up their own homebrew, but lack the equipment or space to do so.

Such operations are not presently licensed, creating questions about compliance with federal guidelines and Montana laws.  The proposed regulations appeared to be a reasonable way to put basic rules in place and provide the business owners with some comfort level that they are complying with the laws.

House Bill 58 easily passed through the House Business and Labor Committee (19-1 vote) followed by the full House of Representatives (70-29 vote).  Even the Senate Business, Labor and Economic Affairs Committee passed it out of committee on a 7-3 vote.

When the bill came up for second reading on the Senate floor, comments from several legislators appeared to indicate some confusion regarding what the bill would regulate.  The chief complaint, however, was the sense that the bill would regulate something that needed no further regulation:  the manufacture, sale and consumption of alcohol was already covered under other laws, so why add more?

In the end, the vote on second reading failed 20-30 and was followed by a successful motion to indefinitely postpone it.  Thus, HB 58 is not technically dead (since it did not fail on Third Reading), but it is highly unlikely the bill will get further consideration and has been put into the "probably dead" category.

As the sponsor noted at the first committee meeting in the House, declining to adopt the new license does not prohibit brew-on-premises businesses.  It merely means they may move forward without any specific Montana regulations governing the operations.

For all our articles pertaining to the 2013 Montana Legislature, click here.

Montana Legislature Turns Its Attention to Wine

Although beer has taken a back seat at the 63rd Montana Legislature - at least for the time being - wine is getting set for a big show. Five bills pertaining to wine have been introduced recently, or are ready to be introduced, ranging in subject from selling wine at farmers' markets to revising laws pertaining to sacramental wine.  Given Montana isn't big wine country, these bills may very well receive a better audience than those pertaining to beer.

House Bill 402 was introduced Feb. 7 and seeks to change the laws to allow direct shipment of wine, allowing wineries to ship "up to 18 9-liter cases of wine annually to an individual in Montana who is at least 21 years of age for the individual's personal use and not for resale." That's a lot of wine.  Presently, such direct shipments are only allowed if an individual obtains a "connoisseur's" license, a process that is so cumbersome virtually no one goes through the trouble. (Plus, there are numerous wineries which interpret Montana law as allowing direct shipments now, anyway.)  A winery would need to obtain a direct shipment endorsement for $50 and pay taxes on the shipment, among other requirements.  Beer is not included.

Senate Bill 268 was also introduced on Feb. 7 and would permit wineries to sell wine at farmers' markets located within 100 miles of the winery.  The bill effectively eliminates any out-of state wineries from taking advantage of this provision though it is written in a way to try and avoid commerce clause/equal protection arguments. 

Senate Bill 266 was introduced Feb. 6 and seeks to revise the laws pertaining to sacramental wine.  As near as I can tell, the bill includes a variety of clarifications and would also allow sacramental wine to be distributed by contracting with a normal distributor or via direct shipment using common carriers.  

HB 424 would permit off-premise retailers of beer and wine to hold up to twelve tasting events per year, but only for wine, and only if the retailer derives more than one-half of its revenue from the sale of wine. No limit on the amount that could be served is proposed.  I don't care for this bill for a couple of reasons. Only grocery stores and pharmacies can sell wine off-premise consumption (excluding certain provisions for on-premise retailers).  Montana doesn't allow pure wine stores, though a bill was introduced earlier in the session, and promptly tabled, that would finally permit them.  Thus, this bill maintains the fiction that a wine store is a grocery store if it has $3,000 dollars worth of food items, but as long as it sells mostly wine, it can hold tasting events.  Tell me why we didn't just run with the boutique wine and beer bottle shop bill which would eliminate the grocery requirement and allow up to 12 tasting events for either beer or wine?  My guess is that it had something to do with the beer part of it.

HB 425 would allow the distribution and sale of fortified wine, which it defines as "grape-based wine that is at least 16% alcohol by volume when bottled or packaged by the manufacturer but not more than 24% alcohol by volume." Presently, the law provides only for "table wine" which contains not more than 16% alcohol by volume.

[Note:  Updated to reflect the introduction of HB 424 and 425.]

For all our articles pertaining to the 2013 Montana Legislature, click here.

Missoula Downtown Association's Winter BrewFest is Friday the 15th

The Missoula Downtown Association's 3rd Annual Winter BrewFest is Friday, February 15 and heads outside for the first time.  The event takes place at Caras Park under the canopy from 5:00 pm to 10:00 pm.  It will be interesting to see how it all shakes out.

Propane heaters and bonfires will provide warmth while enjoying live music and some of the 30+ beers on hand.  Tickets are $10 which includes a tasting glass and two beer tokens.  Additional tokens are $1 each.  Current weather forecast is for mostly cloudy and a low of 21 degrees, following a daytime high of 39. 

The beer list has a few familiar faces, but by and large this will be a good opportunity to try a number of new beers.  It looks like Big Sky will debut their new Brush Tail Saison and will also have their All Souls Imperial Saison for comparison. Kettlehouse will have a rotating selection of  Huckleberry Cold Smoke, Joe Eddy, American Honey, Merlot Barrel Aged Cold Smoke and Poshed Porter, the latter made with chocolate from local Posh Chocolat.  Philipsburg Brewing Co. will show off their Tramway RyePA, while Bitter Root Brewery will offer up the first tastes of this year's Red Dread.  Bitter Root debuted Red Dread at the first MDA Winter BrewFest in 2011 and the beer has been gathering fans in droves ever since. 

Even the regional and national brewers beyond Montana are sending new choices, like RedHook's Audible, Widmer's Columbia Commons and Ninkasi's Renewale.

For years, the beer lists at Missoula's festivals were getting downright stale, but event holders, breweries and distributors have begun catching on in the past couple of years.  Craft beer fans like their variety and the breweries are certainly delivering.

For the full beer list and other details, head to the MDA's Website.

Montana Legislator Seeks to End BYOB Practice

Given Montana's quota system for on-premise alcohol licenses, which we've talked a lot about recently, there are many restaurants which do not serve alcohol. Over the years, it became relatively common for many of these places to allow patrons to bring in their own alcohol such as a six pack of beer or a bottle of wine.  Some would charge a corking fee, while others were happy to provide glasses and an opener free of charge.  Some still allow this practice and you might imagine it doesn't sit well with those who have purchased a license.  

A few years back, the legislature created a new category of license commonly known as a "cabaret" license to relieve some of this pressure, but not permit too much competition.  These licenses allow alcohol to be served only when accompanied by a food order and only between the hours of 11 am and 11 pm. Only table service is permitted and the restaurant cannot have a bar.

Given the limited number of these licenses, you still find various restaurants allowing patrons to BYOB. One legislator is working on a bill to make it clear that's not okay.

Currently in the drafting process, a bill identified as LC0691 would make several changes to Montana's alcohol enforcement provisions.  The most notable is an addition to the "prohibited practices" language for restaurant beer and wine licenses ("cabaret" licenses):

(2) (a) A restaurant that is not licensed for the sale of beer and wine pursuant to 16-4-420 may not allow any person to consume beer or wine or any other alcoholic beverage on the premises.

That would pretty clearly prohibit the practice of allowing patrons to bring in a bottle or two of their favorite adult beverage to a restaurant with no on-premise license.

In reality, the practice is already prohibited under Montana law as interpreted by the Department of Revenue.  Montana law prohibits "bottle clubs" which it defines as:

16-6-306. Bottle clubs prohibited. The operation of alcoholic beverage bottle clubs is hereby prohibited by any person, persons, partnership, firm, corporation, or association. A bottle club is defined as any person, persons, partnership, firm, corporation, or association maintaining premises not licensed for the sale of alcoholic beverages, for a fee or other consideration, including the sale of food, mixes, ice, or any other fluids for alcoholic beverages, or otherwise furnishing premises for such purposes and from which they would derive revenue.

That's not exactly an easy definition to read, but it's par for the course for the legislature and has been interpreted as prohibiting restaurants from allowing BYOB. 

Thus, if this bill gets introduced, look for it to be characterized as a "clarification" bill, a term legislators often use to suggest they aren't changing the law, but are merely clearing up an ambiguity or question of interpretation.

[UPDATE: This bill was introduced on 2-7-13 and is now known as House Bill 405]

For all our articles pertaining to the 2013 Montana Legislature, click here.

The Session No. 72: How We Love Beer

This month's Session* topic is hosted by Ryan Newhouse, fellow Missoula Craft Beer Week creator and occasional contributor here at Growler Fills, through his Montana Beer Finder site.  Ryan came up with a Valentines Day theme and asks us all to explain how we love beer. He writes:

Think of this topic and discussion in terms of being in a relationship . . . I'm not suggesting we need to be thinking of beer all the time, or as much as we think of our partners (though some of us might!), but I'm curious to hear what you beer lovers do to show appreciation for good craft beer.

Perhaps it's that you buy a case of your favorite seasonal and share it with others every chance you get, or you commit yourself to only drinking that beer until it's gone. Perhaps whenever you travel to a new place, you seek out as many local beers as you can instead of finding your favorites. Perhaps you don't even buy bottled beer, but instead fill your growlers and drink at local taprooms. Perhaps our writing and blogging about beer shows how we love beer.

As Ryan puts it, he's not asking "why" we love beer, but "how."  Honestly, I don't even have a good idea yet for Valentines Day, but explaining "how" I show my love for beer should be obvious from this blog.

Yes, I drink it, share it, and brew it.  But more than anything else, I communicate it.

I've now written 500 posts in the more than three years of Growler Fills. I still occasionally ask myself why.  After all, this isn't my job and it costs hard earned cash from the day job to do it. Yet, it isn't too different in some respects from my day job.  As an attorney, I spend my days writing: advocating, explaining, cajoling, arguing - communicating.  When the day is done, it's great to turn to a subject as fun as beer.

You see, "beer" isn't just some inanimate object.  It's a story about people. The people who make it and the people who drink it. I've never found anything that can turn strangers into friends faster than beer.  That has nothing to do with its intoxicating effect and everything to do with its social nature. Exploring these stories is how I show my love of beer. 
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*Today is the first Friday in February which means it's time to take part in The Session, a collective effort of beer bloggers around the world to write on a common topic once each month.