Good Beer Hunting - Waiting on the Tides — How Outdated Liquor Laws Trap Craft Brewer

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The day after Christmas, Back Channel Brewing Co. released a limited-edition growler with the words “F*CK THAT GUY” emblazoned across the front in gold script. The Spring Park, Minnesota brewery is known for its subtle homages to historic Minnesotans, but its last beer of 2020 called for a complete lack of nuance. This one was for Andrew Volstead, the Republican congressman who championed Prohibition.
Do not pity poor Volstead. The ink dried on the southern Minnesota lawmaker’s legacy the second midnight struck on January 17, 1920. Prohibition became the law of the land, and thanks to the passage of the act bearing his name, authorities were given the power to enforce it. 101 years after the Volstead Act went into effect, 88 years after the repeal of Prohibition, and 74 years after Volstead’s death, the man’s name is anathema to beer makers in his home state and across America.
https://images.squarespace-cdn.com/c...f?format=1000w Minnesota’s craft beer scene is soaring, with nearly 200 operating breweries today, putting its industry at about the size of Wisconsin’s. That’s where the apples-to-apples comparisons to the state across the St. Croix end. Wisconsin’s brewing culture is generationally conserved, an heirloom that is revered, protected, and tended with wide-open regulations. Minnesota’s prosperity has been in spite of chapter 340A of the state legislature, a catalogue of lowercase-p prohibitions that have remained mostly unamended since 1985.
For instance: Minnesota breweries are only allowed to sell 64oz and 750ml growlers from their taprooms (340A.285). Grocery stores and gas stations can’t sell full-strength beer (340A.405). Brew pubs can’t sell more than 750 barrels off-sale or 3,500 barrels on-sale per year, and they can’t distribute their own beers to bars and liquor stores (340A.24). If you’re a brewery that also distills, you can’t sell both alcohol products in your taproom (340A.22). If your brewery makes more than 20,000 BBLs of beer annually, you can’t self-distribute (304A.301), and you can’t sell growlers (340A.28). No brewery can have more than a single taproom location, and if you brew over 250,000 BBLs, you can’t even have one (340A.26).
Arbitrary numbers, letters, and punctuation assembled into a stifling code. Somewhere between the articles and subdivisions is the spectre of a congressman from Kenyon, a historic Babadook whose grip extends far beyond his parochial home state across an America still struggling with exorcism.
A BRIEF HISTORY OF HIGH WATER In seven years covering the Minnesota beer industry, there’s no phrase I’ve heard uttered more often than “a rising tide lifts all boats.”
It’s the kind of platitude you might see embroidered on a cabin throw pillow, but the words are held in earnest. Minnesota might be 1,500 miles from the nearest coast, but folks here know momentum when they see it. And the first time it swung in brewers’ favor was exactly a decade ago.
In 2011, Surly Brewing Co. challenged a Prohibition-era law barring breweries from having taprooms. It was the most tenacious brewer-led challenge to Minnesota’s rigid three-tier system in history, and the fact that it was Surly, the state’s most popular brewery at the time, galvanized locals and lawmakers alike.
Founder Omar Ansari played his position astutely, promising a massive $30 million “destination brewery” and reams of tax revenue if only the legislature would allow his vision to go ahead. When the bill finally got to a vote, it passed unanimously. With that, Surly scribbled its name in the history books opposite Volstead.
Since the passage of the Surly Bill, as it’s popularly known, the number of breweries in the state has grown from fewer than 30 to almost 200. Now, Minnesota is the 15th largest beer market in the United States, according to data from the Brewers Association.
In 2015, an omnibus liquor bill gave breweries the right to sell growlers on Sunday, making them the only businesses allowed to sell booze off-sale on that day. Two years later, breweries capitalized on that momentum, collectively leading the charge to legalize Sunday liquor store sales. Working in stride with consumer activism groups, the brewers generated enough support to overturn a statute that’d been in place for as long as Minnesota’s been a state.
The lesson learned from these two high water marks was that real change only comes when the drinking public is educated enough to make demands. To some groups in the local liquor biz, this is dangerous knowledge.
https://images.squarespace-cdn.com/c...f?format=1000w Aside from the well-worn “rising tides” platitude, the euphemism all Minnesota brewers seem to know is “the Liquor Coalition.” They keep the language shadowy to be polite, but they’re talking about the Minnesota Licensed Beverage Association (MLBA), Minnesota Beer Wholesalers Association (MBWA), and Teamsters Joint Council 32, three well-moneyed lobbying organizations who’ve worked together to shoot down exceptions to the three-tier system as “unfair competition.”
The Liquor Coalition’s position amounts to a collection of sentiments and strawmen. They argue on slippery-slope logic, derailing discussions with worries about the knock-on effects of modernization and how they would destroy the small, family-owned liquor stores in their membership.
“We have some of the best craft breweries in the country,” Teamsters political director and lobbyist Edward Reynoso told Forbes when questioned about his organization’s obstinance. “And we have the opportunity for craft breweries to become successful. We don’t believe there’s room for change right now. It’s shortsighted.” Speaking to the Star Tribune about COVID relief, MBWA president Michael Madigan claimed that breweries “do not need any further competitive advantages to the detriment of the restaurants, bars, and other industry members.” MLBA executive director Tony Chesak did not reply to requests for comment on this story, but he’s made similar mealy-mouthed statements in the press.
The unyielding opposition has made the mere act of brewing beer in Minnesota a rebellion—not only against the Liquor Coalition and its mouthpieces, but against 100 years of successfully lobbied temperance. But a new generation of brewers is emboldened by the more recent past. The Surly Bill and Sunday sales taught them that, if they want to open up their industry, they need to do away with euphemism.
CHARTING THE HORIZON There are five breweries in America that are not allowed to sell growlers, and they’re all in Minnesota.
This year, four of those five came together to change the law that prohibits breweries that make over 20,000 BBLs from selling growlers. Joined by Lift Bridge Brewing Co. and Indeed Brewing Company, which sit just below that 20,000-BBL cap, they formed the Alliance of Minnesota Craft Breweries (AMCB), branding their campaign as #FreeTheGrowler.
https://images.squarespace-cdn.com/c...f?format=1000w Two Harbors’ Castle Danger Brewing became the center of the debate after it was forced to triage an estimated 30% of taproom sales because it had exceeded the cap. This cost was made theater in December, when legislators, led by State Senator Karin Housley, congregated at Lift Bridge to watch co-owner and CEO Dan Schwarz dump a tank of unsellable beer down the drain. Normally, the brewery would’ve served the beer on premise, but with taprooms closed due to COVID and a legal restriction against selling it out the door, Schwarz was stuck with spoiling product. Housley turned the dump into a PSA, and the public watched along with her as gallon after gallon was swallowed into the sewers. Seven months earlier, it was the team at Bauhaus Brew Labs sending 99 gallons of their product down the pipes and staring accusingly down the camera while they filmed it. Since March 2020, Castle Danger has drain-poured almost 1,000 kegs.
“They stopped selling growlers so that they could continue to grow,” says Housley. “It baffles me. What Minnesota’s doing is they’re telling their businesses, ‘We don’t want you to grow.’”
Housley pushed legislation to lift the limit to 250,000 BBLs in 2019, but MLBA stonewalled, and the bill was withdrawn. On February 12, she came back and, alongside Representative Jim Walsh, introduced H.F. 1050/S.F. 874 to the 2021 session, a bill that would remove the growler cap altogether. Leading the AMCB’s support, after a decade away from legal activism, was Surly (despite the fact that it had recently closed its taproom and laid off front-of-house staff).
The confluence of bipartisan support across the Minnesota House and Senate, big-brewer muscle, and demonstrable cost to the consumer means that this bill is likely to overcome the Liquor Coalition’s objections before the current session ends in May. While repealing the cap would be undeniable progress for the brewing industry as a whole, it’s more politics as usual. In reality, the biggest ships float first.
SMALL CRAFT ADVISORY When Ashley Hauf co-founded 10K Brewing in Anoka, Minnesota, her only goal was to help her brother turn his passion for homebrewing into a small business.
10K opened in 2014 with a 3-BBL system. Its founders never dreamed of expanding to the point where they’d can and distribute. These days, Hauf serves as the sales director for St. Paul’s Dual Citizen Brewing Company, which made 600 BBLs last year. The two experiences, spanning Minnesota craft beer’s greatest boom period, have shown her that the conversation around package size has drifted too far from the interests of the microbreweries that make up the bulk of Minnesota’s brewing population.
“Most of the smaller breweries don’t even utilize the three-tier system now, so the idea of them disrupting it needs to be thrown out the window,” Hauf says. “It’s more of a stepping stone. Eventually, they’re going to make so many cans they need to sell it somewhere else.”
There are roughly 160 breweries in Minnesota that make fewer than 7,500 BBLs per year. Unrepresented by the AMCB, they formed the Small Craft Brewers Coalition (SCBC), aiming at a higher-ticket prize. In February, the SCBC launched its Free Beer! Bill campaign, fomenting support for two amendments that would allow the direct sale of 12 and 16oz cans from brewery taprooms.
“We’re gonna show everybody that we’re not here to ruffle feathers, we’re not here to disrupt anything,” Hauf says. “We’re just going to sneak in and get something done, and then we’re going to flourish and be doing all right, and like it’s not gonna affect anybody in a negative way.”
The SCBC’s plan is not a revolutionary idea. Buying a four- or six-pack of cans is legal in nearly every state except Minnesota. But this change would revolutionize sales for breweries like St. Paul’s Wabasha Brewing Company, which doesn’t currently distribute via the three-tier system. If it were able to sell $16 four-packs out the door without cutting in distributors and liquor stores, it could scale up more quickly and actually turn a profit. Before long, it’d grow to the point where it would ultimately need to can beer and ship to wholesalers.
“We just want to add a few more things to the repertoire, that’s all,” says Chris Kolve, CEO of Wabasha. Kolve’s early-pandemic opinion article in The Growler laid out a position that would later be adopted by the SCBC: Why change a law that affects only six breweries when you can change one that affects all 200? “It’s a simple change,” Kolve says. “We already have the growler/crowler law. We’d just need to say, ‘OK, we’re just going to add a smaller vessel.’”
Jason Hunziker, head brewer at Stacked Deck Brewing, won’t name names, but he has a story he likes to tell when people ask him why Minnesota breweries are trying to rewrite this specific blue law.
“A brewer from here was talking to a brewer from California, and they were discussing the Minnesota laws,” Hunziker says. “The California brewer asked the Minnesota brewer, ‘Well, how do you guys make any money?’ The Minnesota brewer’s response was, ‘We don’t make money, we basically just make enough to buy the next piece of equipment that we need. And that’s it.’”
DISPATCHES FROM FARAWAY SHORES Given Minnesota’s position in the dead center of the continent, it’s easy to center the discussion here, but what was born and died in the Gopher State has touched shores Volstead never visited. Unfold a map, place your finger on Kenyon, and draw a line in any direction—you’re liable to hit a state whose brewers were driven to innovation by restrictions rather than ambition.
When Larry Foster retired, he took a 700-mile trip down I-35S from Excelsior, Minnesota, to Broken Arrow, Oklahoma. His goal wasn’t to start a brewery in a state whose blue laws were stuck in the baby boom, but that’s exactly what happened. Foster and his son Alex opened The Nook Brewing Co. in December 2020, inheriting Oklahoma’s puritanical baggage along with their license to pour.
Oklahoma was admitted into the United States in 1907 as a completely dry state. It took until 1959, 26 years after Prohibition was repealed, that the Sooner State legalized the manufacture and sale of alcohol. Even then, serving liquor by the drink wasn’t legalized until 1984.
“It was really a struggle for small neighborhood breweries to open because the liquor laws were fairly restrictive,” Foster says. “You could only brew 3.2 [4% ABV] beer, and if you were going to serve it at the brewery, you had to actually give it to a distributor, they had to take it off site for 24 hours, and then bring it back to you and then you could serve it. It’s a pretty tough spot.”
It took the Fosters four years of homebrewing to build up a pro-level skill set, but in that time, Oklahoma underwent a dramatic legal overhaul. Eric Marshall, founder of Tulsa’s Marshall Brewing Company, launched a strenuous campaign to modernize. In 2016, the state passed Senate Bill 424 and State Question 792, legislation that together rewrote the state’s constitution to allow breweries to sell on premise and for gas stations, grocery stores, and convenience stores to carry full-strength beer. Before these two changes to Oklahoma’s state constitution, there were only 14 breweries in the whole state. Now, there are as many in downtown Tulsa alone.
“It’s the change in the laws that opened it for us,” Foster says. “We had talked about [opening a brewery], but with the laws the way they were and the restrictions, why would you bother?”
The Nook has joined a community that is overjoyed to be thriving together (“If I needed a kidney, I swear, one of the other brewers around here would give it to me,” Foster jokes). As their ranks grow, so does their political clout, and drinkers in-state are uniquely empowered. Since liquor laws are written into the constitution, the public must ratify an amendment to change them. In the Nook’s first few months, Foster has already seen how people in Broken Arrow are benefitting from more breweries. Even if his business doesn’t survive COVID, voters have crystallized just what they’d be losing with that closure.
“One of our customers came in and hadn’t talked to his sons in almost seven years,” Foster says. “When we opened, he ran into his son here, and they’ve reconnected in two months. That’s the kind of story where you’re just saying, ‘Yeah, I hope we make it, but if we don’t, it was worth it.’”
Let’s leave Oklahoma for a moment and travel across the map and through time. It’s March 18, 2009, the first time Georgia homebrewer Jason Pellett ever tasted a sour beer—Duchesse de Bourgogne. It was then that the idea for Orpheus Brewing materialized.
“I got very obsessed with sour beers, learning everything I could about the process of making wild beers and then started making them,” Pellett remembers. “The whole idea of opening a brewery was to make the beers that we couldn’t get in Georgia at the time.”
As a longtime Gopher Stater, Foster isn’t too surprised when I tell him how his former homeland is struggling with Prohibition-era laws. But when I tell Pellett about the roiling legal situation in Minnesota, he’s thrust back to this moment, building up a passion into a business that his state would ultimately reject.
When Orpheus opened near Piedmont Park in Atlanta in 2014, breweries were barred from selling beer directly to consumers. To legally hand their product to a visitor, a brewery had to sell a tour that included souvenir tastings—a system that State Rep. Ron Stephens called a “shell game.”
Pellett’s dream was to open a brewery that served only small-batch, wild-fermented beers. But that model would’ve required on-premise sales. With such a volatile production process and an unfamiliar customer base, it would take more than 36oz of precariously sold beer to be successful. Instead, he capitulated and opened as a production brewery with a wide distribution footprint.
https://images.squarespace-cdn.com/c...f?format=1000w “The model that I would’ve preferred to the one that I actually have just wasn’t an option,” Pellett says. “If I wanted to operate something small back then, it really had to be a brewpub, which meant over 50% of revenue had to come from non-alcohol sources. That’s really running a restaurant.”
Only three years after Orpheus opened, Georgia made a generational leap forward when it overhauled its beer laws in 2017. SB 85 took the Peach State from being the undisputed worst state in America for liquor laws to a modern competitor in industry growth. Georgia now ranks 15th nationally in terms of economic impact, up from 41st prior to SB 85. The number of breweries in state has doubled since 2016, and each of those breweries is now allowed to sell their beer in a glass to their taproom customers.
Unlike Oklahoma, Georgia doesn’t have a historical reason for being so far behind on liquor laws. Pellett supposes it might have something to do with Bible Belt traditionalism, but more accurately, the legal woes are a symptom of an unbalanced three-tier system. SB 85 was the result of a long-fought negotiation with the Georgia Beer Wholesalers Association (GBWA). Only by their endorsement did it get through to Governor Deal’s desk, and the same will need to be true if breweries ever want to lift restrictions on self-distribution, franchise laws, or beer delivery.
“You see all these things happening, and it’s like, ‘Why is everything bad?’” Pellett says. “Things just don’t happen to be bad, there are actually people in the way. Things are bad on purpose.”
THE LAST CASTAWAYS It didn’t take Bartley Blume long to figure out he was good at making beer.
A trained aerospace engineer, Blume had a knack for synthesis. After his wife gave him a Mr. Beer kit, he quickly nerded out, experimenting with a wide variety of beers and even home distilling. After the Surly Bill made liquor entrepreneurship a viable opportunity in Minnesota, he decided to go pro and started contract-brewing at the now-shuttered Roseville’s Pour Decisions Brewing Company. In 2013, he took over the business and re-named it Bent Brewstillery.
Blume estimates that the “stillery” at the end of Bent’s name has cost him hundreds of thousands of dollars over the years. Bent is a hybrid brewery/distillery, one of roughly 250 in the United States—like notable big boys Dogfish Head Craft Brewery and Rogue Ales & Spirits—but the first and only of its kind in Minnesota. As such, he exists in a legal blindspot, unable to sell both beer and liquor on the premise where he makes both.
“Why should I have to choose? It’s ridiculous that I do,” Blume says. “I do twice the amount of work, because [the distillery] is a completely additional company with its own vendors, own suppliers, own packaging, own marketing.”
Blume’s story could be hundreds of others’. Like Foster, like Pellett, and like Castle Danger, Blume never wanted to become a martyr. Since 2013, he has fought publicly to get the laws changed to allow his dream to move forward, becoming an emblem of how outmoded beer laws can transform even the clearest-eyed entrepreneur into a defeated lobbyist.
“I don’t want to be a politician,” Blume says. “I wanna make liquor and beer, and I want to make people happy.”
If you wonder why more breweries don’t take up activism, consider Blume’s example. Blume has estranged himself from his peers and lawmakers for his outspokenness. He’s gone so far as to say the laws are written specifically to exclude him. In 2017, he tried crowdfunding his own lobbying effort, but only achieved 54% of his $10,000 goal. Not even Wayzata Brew Works, the state’s only other brewstillery until its closure last December, had the heart to fight it out with him. Things have gotten so lonely that Blume’s wife Brenda had to start her own distribution company, aptly named Defiant Distributors.
Few have Blume’s will, and without large-scale political and consumer organization, not even he will succeed. For every growler cap and package restriction, there is a liquor reform without a lionheart to carry it forward. With the pandemic threatening the sheer existence of taprooms, who can afford to throw themselves at a prolonged legal battle?
Minnesota is leaking talent and tax dollars because of its Volsteadian laws. In the last two years, three breweries—Indeed, Lupulin Brewing Company, and most recently Lift Bridge—have fled Minnesota to open second taprooms in neighboring states. Who will fight for brewpubs, which are unrepresented by both the AMCB and SCBC and subject to more invasive restrictions than normal breweries? What about craft distillers, whose business was totally unanticipated by the lawmakers who re-wrote chapter 340A in 1985? In states burdened with other vestiges of Prohibition—not just Oklahoma and Georgia but Massachusetts, Connecticut, Texas, Maryland, and others—how can any one brewer rest on the belief that it will get better?
Volstead was ousted from Congress in 1922, two years after his namesake act was enacted. He spent the remaining years of his life shrimping away from his reputation as the Father of Prohibition. His authorship was a reluctant obligation of his position, and critics of his time suspected him of being only half-committed to temperance. Fuck that guy yes, but Volstead is only a ghost.
Prohibition was the mandate of a vocal interest group, not the will of the American people. Until those who are most affected by beer regulations are given the power to determine the laws that dictate how, when, and where they drink beer, Prohibition will never be completely exorcised. Liquor coalitions will continue to spar with breweries, in whatever factions they may form. Lawmakers will come and go, alternatively championing and contending their causes, marking progress in slow decades.
And marooned along the shore, the beer drinkers of these maligned states will be waiting for the tide to come in.
http://goodbeerhunting.com/assets/authors/Fagerberg.pnghttp://goodbeerhunting.com/assets/authors/Holston.jpg Words by Jerard Fagerberg
Illustrations by Colette Holston

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