PUNISH THE VIOLATORS, NOT THE INDUSTRY
Here’s Your Chance to Support Your Local Brewer
The microbrew industry is going strong, and bringing great benefits to both residents and visitors. So why does the Montana Department of Revenue want to knock it down?
By Bill Schneider, 8-04-08
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I’ve been on the Montana Beer Trail for six months now, visiting 19 of our 24 microbreweries so far and writing profiles of their business operations for the Microbrew Montana series currently running on NewWest.Net and the Travel Montana website.
Besides being constantly reminded of the passion the brewmasters have for their product, I’ve been amazed how well this micro-segment of our economy is faring in the face of today’s economic downturn. All Montana microbreweries are all running profitably at capacity, experiencing double-digit growth, or doing major expansions. Three new breweries opened in 2007.
So why does the Montana Department of Revenue (DOR) want to knock down the microbrewing industry? Has it been too successful?
Microbreweries are a current focal point of the “buy local” dynamic and the taprooms have become incredibly popular neighborhood gathering places akin to the pubs of Great Britain. Patrons become attached to their local brewery, which is something the DOR and State Legislature might soon discover.
All this success is, sadly, interpreted as lost business by the some owners of casinos and taverns. Having some serious experience with tasting rooms, I question this logic. Actually, I strongly suspect most people frequenting taprooms rarely if ever go to the smoke-filled casinos. Instead, tasting room customers like the friendly, smoke-free atmosphere without the dim clatter of gaming machines.
If I owned a casino, I’d pick up on this market trend and start trying to attract some of the craft beer-drinkers filling up tasting rooms. The brewers have already given them the product, all that fantastic Montana-made microbrew, but even though taproom goers can buy the same beer in some taverns, often at a lower price, they still opt for the tasting room experience. What does this say?
I’ve been known to frequent Montana taverns here and there. When I do, I always ask the same question: What do you have on tap that’s made in Montana? Usually, I get a blank stare from my server. What does this say?
For tavern owners, I’ll answer both questions. The Budweiser Age is ending. Don’t be like the auto companies. Change before it’s too late. Support the craft brewers instead of fearing them.
But that’s not what’s tavern owners want to do. Instead, taverns want to further restrict the already severely regulated taproom operations by usurping the legislature’s job of writing laws.
On Thursday at 1:30 pm on the fourth floor of the Mitchell Building in the Capital Complex in Helena, DOR officials might find out how important local breweries are to a lot of people. Hearing officer Cleo Anderson will hear testimony on a proposed administrative rule change that would cut sales in taprooms by forcing them close instead of stop serving beer at 8 pm.
Currently, the law does not say, taprooms must close at 8 pm, only that they can’t serve beer after 8 pm and some brewers allow patrons to finish a beer purchased before 8 pm. The proposed new rule would prevent consumption of beer after 8 pm.
Tavern owners must close precisely at 2 pm, so they think taprooms should be like taverns, but isn’t that the whole point? Taprooms are not taverns.
In talking to brewers, I’m hearing that the rule change could cut out as much as 25 percent of their taproom sales, and almost every brewer believes--and has repeatedly said in the articles I’ve written so far--that taproom sales keep the boat afloat. Most say their business wouldn’t exist without these direct-to-consumer sales allowed by a law passed in 1999.
So why after nine years is this suddenly an issue for tavern owners? I went out to the DOR offices and asked the staff that question. I heard that some tavern owners have called and complained, particularly about a couple of taprooms that have live music and stay open later to let customers enjoy the local tunes, even though there is no beer sold after 8 pm.
But there is not one single written complaint in the file from any tavern or citizen about any violations of any brewer or the system we now have, which, incidentally, need loosening, not tightening. Brewers really need to be allowed to keep their taprooms open and serve beer until 10 pm especially in summer months when people, both residents and a growing number of tourists seeking local microbrew, don’t get off the river or trail or golf course until late in the day, too late to make it to the taproom. They could go to a casino, of course, but again, a growing number of people aren’t interested in casinos and traditional taverns.
Nonetheless, with less than two weeks notice, Montana brewers received the proposed rule change. Now, the brewmasters are hopping mad and will be massed in that conference room telling the DOR at least three things the agency needs to know: (1) small breweries are already too restricted, (2) an administrative rule is not supposed to change the law, and (3) if there is one rogue brewer out there, punish that company, not the entire industry.
Most if not all brewers religiously follow the letter of the law. If you don’t believe me, go to any taproom and try to buy a beer at 8:01pm, even at triple the price, and you’ll go home thirsty.
If there have been violations, you’d think they’d be noted in the files. And even if written complaints have come in, it seems much better for DOR to investigate and punish the offender, not the compliant, and in the process, darken a bright spot in Montana’s economy. Some taprooms don’t even stay open until 8 pm, but because a few allow beer purchased before 8 pm to be consumed after 8 pm, should we knock down the entire industry?
Here’s your chance to support your local brewer. Contact DOR and not only ask the agency to leave the current law as is, but consider supporting legislation to allow taprooms to stay open and sell beer until 10 pm.
To support your local brewer, give your comments to Cleo Anderson, Department of Revenue, P.O. Box 5805, Helena, MT 59604. Email: . Phone. 406-444-5828. The hearing record on this rule change stays open until August 15.
Also, feel free to sign an online petition on grizzlygrowler.com, a terrific website put up by Timothy Alex Akimoff. He already has 712 names on the petition, which was orginally written by Dave Ayers of Glacier Brewing in Polson. You can add yours by clicking here.
[End of article]Nice article, Bill.
One note: I think the petition was actually started by Glacier Brewing and posted on Tim's site. Not to take away from Tim who has a great blog, but wanted credit to go where credit was due.
What about the world's hops shortage, due largely to microbrewing? How can these breweries be so prosperous when the buzz is Big Sky Brewing seems to be cutting back because of the high price of hops? There are a lot of questions about the future of microbreweries. Another is the law imposed on the Bitter Root Brewery to set its last call at 8:00 pm. Its getting harder and harder for these mom-n-pop beer stands. I want to see them thrive, but I think it would help if you told the whole story of microbrewing.
Comment By Craig Moore, 8-05-08A brew ha-ha among the beer barrel bung bangers is a sight to behold.
Comment By Ele, 8-05-08I had intended to send this letter in Oct 2007. Still seems fitting now.
"I'm from the government, and I'm here to help you, protect you, save you from yourself..." came to mind while reading about Robin Prosser's death( Medical Marijuana Advocate Kills Self).
Do any of you wonder what Article I Sect 8 paragraph 17 of the federal constitution means? If you don't even know what it refers to, then get off your butt and look it up. While you're at it, look up Amendments 9 and 10.
Ever wonder why the 18th amendment, prohibition, was repealed? Or why an amendment to prohibit certain drugs was never introduced? Or why, when Congress increased the minimum wage, only federal workers, U.S Territories workers and workers covered by the Commerce clause were affected? The simple Commerce Clause, which now resembles an one-size-fits-all spandex body suit worn on an obese elephant.
Can't answer? I didn't think so. That's how the Congress, State legislatures and local governments, with the help of activist courts, get away with "thievery" and "murder". Your ignorance gives them that power.
Confused? Besides jurisdiction playing a major roll, try to understand this: government has no rights. It has delegated duties authorized from and by the people who created it. Government is authorized by the people to fulfill the duties enumerated in the Constitution, the chains which bound and limit it's power and not ours, the people. "The United States is entirely a creature of the Constitution. Its power and authority have no other source. It can only act in accordance with all the limitations imposed by the Constitution." - Reid v Covert 354 US l, 1957, Supreme Court decision
Thanks to our ignorance and lack of understanding of unalienable rights, the sole purpose of government, the Constitution and it's limitations on government, the people lose their freedom, their private property and sometimes, like Robin, their lives.
Reading about this latest fiasco by the Revenue Dept, I can't help but wonder what they or our elected servants, have against freedom. Where is it written that freedom can be regulated by the fictions created by the people without the peoples approval?
ele, don't worry when Obama is elected as 'bung hammerer in chief' government will grow larger and fix everything.
Perhaps there is a correlation to this mess and Helena's penchant to use a very expensive means to control its urban deer population. Instead of involving sportsman to control the problem, they are going to use police, traps and such before they dispatch them. Many other cities allow urban bow hunting successfully and without incident. Cheers! How about outsourcing many of the govt. fuctions?
once again Craig hits the nail on it's pointy end with the wooden part of the hammer. but i agree with Craig here that government can only do harm here and should step aside on this one if it knows what is good for it.
also, i have long known the reason for deer infestation. overly strict leash laws passed over the last two decades by yuppies constrain us all to kennel and confine our dogs. relax them and voila, end of deer problem. they don't call them dogs for nothing.
and the best part is since the yuppies don't want all those loose dogs running around anymore soon there will be cougars stalking all the nice, pretty deer in a neighborhood near you.
hunters are good but dogs do a better job.
"if dogs run free, why not we?" Bob dylan said.
speaking of running free I do like Charlie's now and then, but I have noticed that the true neighborhood atmosphere is exhibited at the local microbreweries like kettlehouse.
problembears comment reminds me of Monty Python's Philosophers' Drinking Song.
Immanuel Kant was a real pissant
Who was very rarely stable.
Heidegger, Heidegger was a boozy beggar
Who could think you under the table.
David Hume could out-consume
Wilhelm Friedrich Hegel,
And Wittgenstein was a beery swine
Who was just as schloshed as Schlegel.
There's nothing Nietzsche couldn't teach ya
'Bout the raising of the wrist.
Socrates, himself, was permanently pissed.
John Stuart Mill, of his own free will,
On half a pint of shandy was particularly ill.
Plato, they say, could stick it away--
Half a crate of whisky every day.
Aristotle, Aristotle was a bugger for the bottle.
Hobbes was fond of his dram,
And René Descartes was a drunken fart.
'I drink, therefore I am.'
Yes, Socrates, himself, is particularly missed,
A lovely little thinker,
But a bugger when he's pissed.
Dear Craig Moore,
Why wasn't I contacted by the writer of this article. Sure, it was excellent but there's so much I've learned that I need to share with the world before I pass out for the last time.
Please don't let me die with my art still inside of me!
Bestest wishes,
Tabby
Scott,
Sorry I missed that about Dave Ayers of Glacier Brewing originally putting up the petition. I corrected the article to give credit where credit is due. I just checked, and he has 712 names on it already. Thanks, Dave.
Bill
They can have my pint glass when they pry it from my cold, dead hand!
Comment By RCM2, 8-06-08I guess I'm in the minority here, but I think the taproom exception to the alcohol licensing requirements have been abused. These places were justified by the fact that they were merely tasting-rooms and wouldn't compete with regular bars. In my opinion, they've evolved into pretentious "tavern-lites," that are simply trying to circumvent the expense of having to buy a regular license. I agree with the libertarian views expressed above, and would prefer that they lighten up on all alcohol dispensing establishments, but if they're going to regulate the hell out of the bars these taprooms do not qualify for some sort of superior morality exemption. And no, I don't own a bar.
Comment By Doggerel, 8-06-08You all like taprooms so much try living next to one. Any time there is alcohol comsumption there will be problems with inebriates and destructive behavior. Everyone exiting an establishment is under the influence after, yes, even one handcrafted microbrew. The three pint legal maximum is rarely enforced if at all. Some visitors to our neighborhood have been previously drinking as evidenced by the cans and bottles left in the gutter or on our property. This is in addition to the cigarette butts, litter, loitering, trespassing, profanities, screaming, barking dogs, tires screeching (feeling mighty powerful after three pints?), parking problems, loud music (studies show it increases consumption), diesel delivery truck exhaust, the general stink of fermenting vegetation, and on and on. The brewery won't take responsibility for anything off premesis, and some things on premesis, so my recourse is to call the cops- something I am reluctant to do unless it is really serious.
I suggest restricting microbreweries and taprooms to an industrial part of town and then I don't care how late they stay open or where the customers piss. Or worse. Concentrate on retail sales and return to the tasting room only concept. It might take the breweries back more to the art of brewing and less to servicing the quaffers. You want to be a bar then get a bar license.
I am also for lowering the drinking age to 18 and increasing the penalties for driving violations and drunken behavior. Take some responsibility for yourselves or someone will do it for you.
Doggerel, have you ever even been in a tap room?
"Some visitors to our neighborhood have been previously drinking as evidenced by the cans and bottles left in the gutter or on our property."
First off, I doubt that cans and bottles are from tap room visitors. People that go to a tap room prefer their beer in a pint glass.
You can't smoke in a brewery, and I don't see many people outside smoking so not sure about that one. I don't know much about the trepassing or loitering, but the rest seems to be noise complaints. Seems like the brewery is within their rights since disturbing the peace can only happen after 10 pm.
If you hate it so much, why don't you move? Tell you what, if things are so bad, your property value must not be worth anything. I will buy it from you at bargain price. That way I can be next to the brewery, and you can go back to being a crotchety 75 year old man somewhere else.
FYI, DOR just pulled the proposed rule, so score one for the brewers and their patrons.....Bill
Revenue Pulls Proposed Rule Restricting Taproom Hours
http://www.newwest.net/topic/article/revenue_department_pulls_proposed_rule_restricting_taproom_hours/C41/L41/
RCM2--there are no "regular licenses". Regular licensing means that you, as a business owner, want to sell and can properly administer the sale of alcoholic beverages--you apply for a license and pay for it. In most states you can purchase a license after jumping some hurdles. Not in Montana. A limited number of licenses are offered in a lottery that private parties compete for. Then those licenses, as a State of Montana regulatory and revenue tool are allowed to be sold by that private party for a significant profit (from which the state does NOT benefit). The MTA says that the license is now a piece of capital value in the business that is bought for. And, in the current system, they are right. That makes fixing the system difficult. The license essentially becomes part of the capital value of the business--and that capital becomes important for credit, expansion, etc.
So the state uses a lottery to sell a license for $800 in Missoula.
"License, for establishment located in an incorporated city/town of more than 10,000 and within a distance of 5 miles, $800"
http://mt.gov/revenue/forbusinesses/liquorlicensees/liquorlicensees.asp
Then a private party now has a license that can be sold for hundreds of thousands of dollars. CORPORATE ENTITIES WITH LOTS OF MONEY won't come to Montana because of the arcane laws. (Out of state ownership of these licenses is not allowed). Now you may not cry about that, but just as any business owner--they simply want to be able to apply for a license and pay for it.
What LOCAL business owner would want to plan for an opening, only to not get a license or not know EXACTLY how much it is going to cost? How do you get bank financing to start a business with such an unpredictable method of licensing?
"Population-based quotas enacted in the 1940s restrict the number of liquor licenses. In most of the state's largest cities, the only licenses available are sold by existing holders."
http://www.greatfallstribune.com/news/stories/20041003/localnews/1347068.html
Doesn't seem quite right to me that a licensing, regulatory, and revenue system administered by and for the people and businesses of Montana benefits only a certain group of businesses. The current system restricts growth and opportunities. Without even thinking I know the details and inner workings of this current system, two *probably naive* fixes come to mind: 1. Increase the number of available licenses in the lottery. 2. The state gets a portion of the sale of any license changing hands.
At some point, the profitable "exchange" of public regulatory dollars needs to be transitioned fully back to the state. Private businesses cannot have undue influence in this regulatory process. That is like the fox guarding the proverbial hen house. No more private businesses benefiting from public licensing-regulatory dollars. That is the state's money. Currently and as seen by the actions considered by the State, the fox is guarding the hen house.
Hey Scott, You make false assumptions and silly proposals. I own my house. The brewery rents. The problem is a business that has outgrown its venue and contributes nothing beneficial to the neighborhood. I am not a 75 year old curmudgeon but a citizen who has the right to enjoy my property. I have years of experience with this situation and you don't. I have spent my fair share of time holding a real beer in many different locations so it's not like I am waiting for something to whine about. And yes, those craft beer lovers do drink other things and leave their debris. They smoke outside and in their cars because they can't do it indoors and think butts are not litter if they think about it at all. One can get very tipsy on three, or more, pints of brew and it is not cute nor legal to drive, or ride, in most cases. Personal responsibility and rational are rare attributes of the impaired. Ptooey...
Comment By rcm2, 8-07-08Dan, I do understand the system somewhat. It's not that there aren't any licenses, it's that you have to buy them and they are really expensive. New bars are opening but it is extemely capital intensive and oftentimes only happens when some other business closes. Microbreweries can buy these licenses just like anyone else, they can choose not to provide gambling or not to serve more than three pints to anyone and still sell beer after 8:00. My bigger point was that alcohol is alcohol, drinking it is drinking it, and these places aren't really anything different than a part-time bar, but they don't want to have to call themselves that or take as big a risk and pay for a regular license. Nobody's arguing that Montana's liquor control and licensing system doesn't suck, but I think the taproom exemption is disingenuous and deceitful, and the system we have was designed to protect the long-time, mom and pop tavern owners from getting buried by new, big money interests while still limiting the number of establishments so as not to offend the morality police.
Comment By Dan Leithauser, 8-08-08RCM2-
Points well taken.
I understand the point about tap rooms vs. taverns.
The law was carved out to accommodate the different nature of that business. Taverns did not want tap rooms competing with them. The current law represents a compromise. AND, the absolute number of available licenses IS LIMITED--that is the exact reason they become expensive in the after market. Not everyone who wants a license can get one. There are an absolute number of licenses based on population which originated with the morality argument. Limit the supply, so the demand will be moderated. I think we understand how well that actually works in practice.
My continued points:
The absolute number of licenses based on population is what causes them to be valuable in the after market of private profit taking. It is my opinion that the state should not allow the after market to exist. The state provides a regulatory tool (the license), if the party who has that license leaves the business--then that tool reverts back to the state. It cannot be sold to the highest bidder.
Licensing should not limit the potential market. It is supposed to provide a tool to the state to enforce current law and collect revenue. Population density limits are artificial and limit business opportunities. Businesses that are allowed to sell alcoholic beverages should be competing in the marketplace--not competing with others for a license that allows them to have a business.
Any business who wants a license, can pay for it, and can enforce the current alcohol laws (bad as they might be) should be allowed to purchase one FROM THE STATE. No more population based limits.
Here is an analogy to the supposed morality argument for limited licensing.
Population density causes pollution.
Cars are linked to that pollution.
Based on the above--drivers licenses should be limited in number based on population density to limit pollution.
If you have a license and choose not to use it (and that is the intent--you will start riding a bike, taking public transport, etc), then you can sell it to the highest bidder. Now you may say that having a car to get to work is essential....
OK here is another more onerous analogy.
Population density causes pollution.
You need a license to have children.
If you choose not to use that license you can sell it.
Oh, and here is another one sure to get people going...
Industry causes pollution.
You need a license to pollute. (carbon credits)
If you don't pollute you can sell your license to someone else who pollutes.
OR guns kill people.
Therefore we should limit the number of guns.
And, all guns you own will be licensed.
Ouch.
It is not the intent here to start a discussion over the analogies--only over the central issue of how the sale of alcohol is administered by the state.
Of course, hopefully, we all understand that
cars and guns don't kill people, it is the people operating them who kill others.
and jumping back to your point--Same with alcohol--it is not the alcohol --it is the people consuming that alcohol. Unfortunately, some of the same people who think nothing of popping their lit cigarette out of an open car window. Or doing the same outside a bar (or tap room).