Tuesday, December 1, 2015

Mississippi Brewers want to sell beer on site

 Mississippi brewers are trying to change a law that prevents them from selling their craft on site.  Steve Wilson reported for Watchdog.org:

After touring the Lucky Town Brewery in Jackson, brewmaster Lucas Simmons can give you a sample of his pub ale or his Belgian style blonde ale, but forget about buying a six-pack from him. He’ll have to send you down the road, to a nearby store.

Craft brewers like Simmons are facing a serious challenge to their solvency, as Mississippi regulations that prohibit them from selling their beer at production facilities. Simmons, under the current laws, could apply for a license to sell wine at his brewery. But not beer.

“You get your 36 (free) ounces of beer with the tour and mosey on out,” Simmons said. “It’s extremely silly. It’s a giant revenue generator, and as much as people don’t want to think about it, if you saw the margins that we make on a product we have to sell through a distributor to the retailer, it’s tiny. It’s nothing.

“If we sell that same product on site, if someone wants to sit down and have a pint of beer, it’s a ton more revenue. At our levels right now, what we’re putting out right now, if we can sell just 5 percent of that on site, which is not unreasonable, we’d have 49 percent more revenue without spending a cent.”

Mirroring a trend nationwide, the industry has grown from one microbrewery in 2003 — Lazy Magnolia in Kiln — to seven statewide, but that’s still the lowest per-capita of the 50 states. According to the Brewers Association — a Boulder, Colorado-based trade organization for craft brewers, home brewers and distributors — a microbrewery is defined as a brewery that produces fewer than 15,000 barrels per year, with 75 percent of production for sale off-site.

While overall beer sales increased only 0.5 percent in 2014, microbreweries account for 17.6 percent of the increase — despite accounting for only 11 percent of all beer production in the U.S.

Mississippi is one of two states that have a clear ban on on-site sales for microbrewers; Georgia is the other. According to Brewers Association economist Bart Watson, these laws — an outgrowth of the post-Prohibition regulatory climate — are unnecessary today.

“A lot of the blame pre-Prohibition was placed on what were known as pint houses,” Watson said. “These were locations that were either owned by or commonly controlled by large out-of-state breweries. There was a perception that these breweries didn’t care about their local communities and were just pushing beer into them without worrying about the ills they’d cause in the local communities.”

This led to what Watson called the three-tier system, which consists of producers, who can only sell to independent distributors, who then sell to retailers. Mississippi has some of the most restrictive regulations on distribution, as local brewers have few options for breaking their contract with a distributor, even for cause. No entity can have a financial interest in the success of an entity in the other two tiers. According to the Brewers Association, North Carolina and Texas have eased their regulations on distribution contracts and have thus seen their number of microbreweries increase 23 percent.

“Obviously, we’re in a very different country than we were in the 1930s,” Watson said. “One thing that local policymakers have figured out in other places is that many of these local breweries care about the community, and we started to see rules throughout the country creating a whole lot more flexibility there and allowing breweries to have a limited ability to do direct sales for purposes of raising capital, marketing and building the breweries in their local community.”

While the regulations are harmful, at least recent years have shown a trend toward scaling back regulations. Thanks to the work of a group of beer enthusiasts called Raise Your Pints, the Legislature authored and Gov. Phil Bryant in 2012 signed into law a bill allowing the sale of high gravity beers — up to 10 percent alcohol by volume. Before its passage, Mississippi was the only state that prohibited the sale of beer with more than 6.25 percent alcohol by volume. Higher-gravity beers have a long shelf life.

The state legalized home-brewing in 2013. Simmons and several other members of the state’s brewing guild started out as home brewers who decided to turn their hobby into a business.


Anonymous said...

Mississippi: Flirting with the 20th Century

Anonymous said...

Micro brewing has proven to be a big economic asset to many communities.

It's just crazy that Mississippi will not support micro-brewers.

And, by the way, I don't drink beer...never have liked it. But, I can see when I travel that micro breweries are much like boutique wineries and attract tourists. And, I can see that just as some people like fine wines, there is a market for those who like fine beers. And, there's market of home brewers who want to learn how to brew and buy the equipment to home brew.

I can also read, which is apparently something too few of our elected officials are willing to do!

Anonymous said...

All for this. Love it hate it, craft beer is big right now. If I am not mistaken, we had 1 brewery in 2000s in MS and now we are at 13. This was due to the change in the ABV cap and the work of Raise Your Pints. I'm sure the distributors are not for this. I imagine they weren't for the increase in ABV either, but are very happy now given the revenue being generated. It's not like people will go to brewery to drink and only drink beer when they are at the brewery. Not to mention only drink one brand if you are into craft beer.

Luck Town invested in a questionable area of town and they need all the revenue they can get to fuel growth and regional expansion. This could make a huge impact on their bottom line. It also would create jobs for servers at these breweries.

It really is moronic to pay for a tour to get 36 ounces of beer. Really seems backwards, but not surprising for our state.

I'm Among The Sane said...

Since the days when the largest brick homes in the county were built off bootleg money going to the sheriff, Mississippi has been behind the times and squarely behind the eight-ball in many respects, this one included.

The fact that 'some of us' get to decide for 'all of us' what will be sold, where and on which days, is insane. And those decisions are made based on morality and emotion.

It's insane that you cannot buy cold beer in some locations, cannot buy a single in others, can't buy it cold in still others and can't buy it any time in others or on certain days. All in the name of religious piety and sanctimony.

It's sheer idiocy to warehouse liquor at Gluckstadt and require that every bottle sold pass through that location for stamping. Does any other state do that? Probably not. Should we require the same process for shrimp and catfish and oysters and swingsets and camouflage hunting vests? Why not?

Will this state ever advance beyond this primitive state? Well, probably, sometime in the next fifty years or so.

Anonymous said...

Mo' TAX revenue, and control.

Anonymous said...

Call a lawyer.

Apply to be a distributor, pay all the fees.

Sell your product to the distributor (your company) who can then sell to retailers.

You see where this is going?

Apply for a retailers permit in yet another company and sell your beer nearby.

Anonymous said...

I'm sure the distributors are not for this.

The distributors and the lobbyists dependent on their dollars.

... but are very happy now given the revenue being generated.

The way the distributors are "distributing" crafts doesn't convince me at all that they are now, however grudglingly, happy. Also not convinced they are net revenue positive for the effort.

Anonymous said...

I'm very supportive of this bill but i believe the brewers will get murdered at the capitol if they don't approach this in the right way. Business owners (including brewery owners) don't always make the best lobbyists. Consider me skeptical that this deal will go very far.

Anonymous said...

10:39, Did you mean they have to pay to play?

Anonymous said...

"The way the distributors are "distributing" crafts doesn't convince me at all that they are now, however grudglingly, happy. Also not convinced they are net revenue positive for the effort."

I would imagine the more established craft breweries are quite profitable for our distributors - think Sam Adams and Sierra Nevada that we had before 2012 and Lagunitas, Oskar Blues, and Sweetwater that we have now.

I would expect the local MS and/or smaller breweries to lean on the distributors more. The distributors are likely not used to this with the heavy handing direction from Bud/Miller/Coors. I would expect a craft only distributor to handle these smaller breweries better than those accustomed to BMC. We just don't seem to have those in MS.

Anonymous said...

@ 11:45 - I just don't think the margins are there. They are already priced above the more nationwide craft breweries. I don't think any brewery in MS is making a ton of money starting off. Lazy Magnolia may be doing pretty well, but they are well established.

Anonymous said...

Sam Adams and Sierra Nevada are craft breweries? LMAO If you think the resolution is for local and smaller breweries to do more leaning on the distributors then it is obvious that you simply don't know what you don't know.

Messick said...

"The beer we got drink pretty good."

Anonymous said...

11:45, good 50 year law requires help and that assistance isn't free. If a business owner represented himself in a criminal matter, the judge would remind the business owner that he gets what he pays for. Same goes for designing buildings and privately owned bridges...i suppose you could do it yourself but that would a bad decision.

Anonymous said...

@ 9:59 AM - Brewers cannot also be distributors (or retailers). Hence the three-tier system. Nice try though.

Anonymous said...

1:37, drafting any good document REQUIRES intelligence, not "help".

Getting a law passed requires "help".

*If votes or good policy mattered, no one would spend billions on lobbyists. Enjoy your democracy.

Anonymous said...

They knew the law when the opened their business and now they are whining trying to get the law changed. Not very smart.

Anonymous said...

6:51 pm That may be the most simple minded ,naive sentence I've ever read.

Anonymous said...

Each year there are almost the same number of people killed by DUI than with violent gun incidents. Why isn't there an outcry to stop alcohol manufacturing? It's because those calling to outlaw guns are a bunch of hypocrites and drunks.

Anonymous said...

8:11 They tried that. It was called Prohibition. Get someone to read a book to you.

Anonymous said...

The distributors still hold all the cards. A stranglehold on shelf space and shoddy availability are their trump cards. Only thing that really changed is the ABV.

Anonymous said...

The first rule is to make beer with enough demand, lucky town and lazy mag are shitty. Try again.

Anonymous said...

@ 9:34 - Just curious, what is good in your opinion? Any of the local MS beers you prefer over the LT and LM?

Anonymous said...

Southern prohibition, Suzy B and Smash, and jack the sipper. Chandelier freemason golden ale. Would put them way ahead of LT ans LM.

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