Taverns and Breweries: Making Sense of the Mess

The Montana Tavern Association's recent attempts to stifle brewery tap rooms touched a serious nerve with craft beer fans.  Comments on this blog and other social media sites ranged from a call-to-arms to the unprintable (which I delete). Yet, commenters raised one common question more than any other:  Why would the MTA want to enact a bill that would harm the brewing industry?

To review, the MTA, working with a friendly legislator, sought to draft a bill which would limit on-premise sales at brewery "sample rooms" to no more than 10% of the brewery's annual production. Montana's Small breweries (defined as producing between 100 and 10,000 bbls annually) may sell 48 ounces per person, per day for on-premise consumption between the hours of 10 am and 8 pm.  Several of Montana's 36 breweries sell 100% of their annual production on-site through tap rooms and growler fills. Most sell at least 85% on-site.    

The effect of the bill would be devastating to most of Montana's breweries, a point the MTA anticipated and sought to counter by preparing numbers demonstrating how breweries could still be successful.  No doubt some could, but it begs the question. When the breweries have been built and operated within the laws as they've read since 1999, why should they?

Because they are violating the "intent" and "spirit" of the law, claims the MTA.  It's a comical argument with no defensible position.  The law says small breweries can sell 48 ounces per person per day between the hours of 10 am and 8 pm. The law neither limits the number of people who may request their 48 ounces nor limits the amount of fun they can have while enjoying them.  At the legislative hearings in 1999 to consider the  bill to allow breweries to sell pints (within the 48 ounce limit, etc.) there was NO opposition.  In fact, the MTA supported the bill and thanked the brewers, distributors and tavern owners who came together in compromise.  

So what happened?  Brewery tap rooms became an attractive nuisance to the MTA.  People like them.  Really like them.  They largely provide an atmosphere missing from most bars.  The craft beer boom reached heights anticipated by no one and coincided with a new-found sense of place - call it the drink local equivalent of the eat local movement.

In short, they started competing with the tavern owners.  The MTA says the competition isn't "fair."

Competition, you say? When Starbucks moved into downtown Missoula in 2006, the local news media ran the predictable story asking local coffee shops like Break Espresso and Liquid Planet what it would mean for their business.  The same story ran recently when Einsteins Bagels announced it would open its first Montana location less than a block from Missoula's bagel institution, Bagels on Broadway.

In each instance, the response was predictable.  Answers ranged from "there's plenty of room for everyone," to "the more the merrier," to "national brands raise the interest in the product," to "we are proud/good at what we do and will see how things shake out."  What else are they going to say?  Competition is a fact of life for every business. (Incidentally, Starbucks closed it's downtown Missoula location three years later. It's now a Jimmy John's sandwich shop competing with downtown's other lunch favorites.)

Things are different in Montana's world of alcohol.

When prohibition ended in the 1930s, Montana chose to enact a quota system for liquor licenses. For the most part, there aren't any licenses left in the places you'd most want to get one.  Thus, these quota limits have created an artificial system that significantly increases the value of the licenses.

Want to open a bar in Missoula? You can't run to the Department of Revenue and pay $400 for a license.  You must purchase it from someone who already has one.  Supply and demand at play.  As demand increases, so does the price. Add more licenses, and the value of the existing ones decreases.

The quota system also provides a built-in limit on competition.  With only so many licenses, there can only be so much competition. 

The MTA's bill to limit tap room sales to 10% of annual production is about competition. It's about the MTA's attempt to preserve value created by an artificial system.  Never mind that many tavern owners paid from a few hundred to a few thousand for a license, not the hundreds of thousands the MTA would lead one to believe.  For them, it is merely about prohibiting Starbucks from moving in down the street. 

To the MTA's way of thinking, the breweries are unfairly competing with the taverns because the breweries did not have to shell out hundreds of thousands of bucks for a license to sell alcohol. Apparently recognizing this argument doesn't hold up for many of their members, the MTA has more recently created another "unfair advantage" argument.  Not only did the breweries not have to buy a retail license, but they get to sell their beer without the markup added by the breweries and the middle men, the distributors.  If it cost the brewery $60 to make a keg and the bar has to buy it for $120, that creates an un-level playing field. 

While the numbers might represent some generalized average, the argument is far too simplistic.  For one, it ignores the fact breweries are only allowed to sell alcohol for on-premise consumption between 10 am. and 8 pm., not the 8 am to 2 am for most retail licenses (not to mention the max of 48 ounces per person).  How level is that playing field? Breweries are also only allowed to sell the beer they brew onsite and cannot serve wine, liquor or beer from another brewery.  Mash tuns, fermenters, and bright tanks aren't cheap, either.

At the 2011 legislative hearing to shift the tap room hours, a proposal by the brewers that was dead on arrival, tavern owners who opposed the bill made this oft-cited argument:  if the breweries want to act like bars, they should buy a retail license like the rest of us.

Except they can't.  Montana law prohibits a brewery from also owning a retail license.  That's why you see breweries like Kettlehouse going through complicated gyrations to split the brewery off from its tap room to make it work.  It's a good model when it pencils out and in many places it has where license values are low.

One legislator has even been working on a bill to allow "stacking"of licenses so a brewery could own both a brewery license and a retail license. Yet, craft beer fans and tavern owners alike shouldn't be too quick to embrace this model.

Let's say there are 50 retail, on-premise licenses available in Missoula. (Totally making up that number for illustrative purposes.) If there are also five breweries in Missoula, there are 55 places (in theory) where you can purchase adult beverages for on-premise consumption.  As the breweries purchase a retail license (either because "stacking" becomes legal, or the brewery goes the Kettlehouse route), the tap room is replaced by a retail business.  Fifty five locations get reduced to 50 locations. Thus, each retail license purchased by a brewery results in one fewer bar, taproom, restaurant or similar place to purchase alcohol for on-premise consumption.  That decreases choice and decreases competition among alcohol retailers.  As a side effect, it increases the value of the licenses which remain.

This is not a positive situation for anyone but the 50 license holders. 

"Let's just get rid of the quota system, then," is the common response to this mess. Unfortunately, it isn't that simple.

Some people who own taverns did pay hundreds of thousands of dollars for the retail license.  Some bought a license decades ago and are counting on the increased value to fund retirement. Banks have lent money using licenses as collateral. There is no guarantee that any given license will retain its value  (just ask someone in Butte), but there is a lot invested in the system.

Like it or not, it is the system we have. These are the rules the tavern owners must play by if they want to get into the game.  And just like the brewers, they've played by the rules of the system Montana created.  

Which makes it ironic that the MTA wants to change the rules on the brewers and pull the rug out from under them. There is nothing but politics standing in the way of the Montana legislature adding thousands of licenses to the system, thus immediately dropping the value for everyone down to nothing more than the application fee.  But is that fair?

I don't think so. The quota system decreases competition, decreases choice, prevents a free market from operating, and creates turf wars, legislative battles and hard feelings.  There's nothing there to like if you're an outsider looking in. Or just a craft beer fan looking to enjoy a pint.  Yet these are our rules.

They suck, but we're in it together. If we're going to create a better system we're going to need to do it together.  And by "we" I mean the brewers, tavern owners, distributors and consumers alike.  Eliminating the quota system is the preferred way to go, but we're likely going to need to provide some form of compensation to those who have paid dearly to play by the rules. That's the political and practical reality of the mess we're in.  It won't be easy or fun, nor will it likely be fair to all, but does anyone think the current system can survive another fifty years?

In the mean time, we could all save a lot of heartache if we'd just call a truce, accept the rules as they stand, and start working together to find a new model.    

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

RWM Monthly Beer Run Gets Oxford Education

Anyone worth his or her salt knows education comes from a wealth of sources. So, if you're brave enough to take on the ice and snow covered streets of Missoula under cover of darkness, you're likely the kind to also brave The Oxford, where you'll be schooled on the finer points of one of Missoula's old-school bars.

The Oxford is the destination for this month's Run Wild Missoula Beer Run, held the last Wednesday of each month at 6:00 p.m. at a rotating destination.  This month it's at "The Ox,"  which you'll find at the corner of Pine and Higgins Streets (not to be confused with nearby Charlie B's, located at the corner of space and time).

So, Wednesday, January 30, 2013, join your fellow beer runners for a five mile group run followed by the beverage of your choice and a good chance at spotting some of Missoula's wildlife. 

Product Review: Midwest Supplies All-Grain Ingredient Kit

I love to brew.  I'm not the most sophisticated at it, but there's something magical about taking water, malt, hops and yeast and creating an infinite variety of the great nectar known as beer. So when Midwest Supplies asked us to review one of their ingredient kits, I readily accepted their offer.

Actually, that's not quite true. I haven't brewed a "kit" since my very first brew back somewhere around 1997.  I was also reluctant to say yes because it appeared Midwest only had extract and partial mash kits (not that there's anything wrong with that).  After Midwest politely pointed out they had nearly 100 all-grain kits, I sheepishly admitted my failure to properly navigate their rather helpful website and selected the Peace Coffee Java Stout.

I've been brewing IPAs lately and thought it was time for a big shift to one of my favorite styles. Plus, this kit suggests it brews up at 4.7% abv, so I was curious to see if I could brew up a great tasting session-ish beer.

The package arrived in great shape with all parts present and accounted for:

• Grains: 9 lbs 2-row pale malt, 14 oz Chocolate Malt, 4 oz Flaked Barley, 4 oz Caramel 60 L, and 1 lb Roasted Barley for a total of 11.375 lbs.
• Hops: 1 ounce Challenger (bittering); and 1 ounce Tettnang (aroma). 
• Yeast: Wyeast Thames Valley (also had the option for dry yeast or White Labs)
• Coffee:  4 ounces of Peruvian organic coffee beans from Peace Coffee Roasting in Minneapolis
• Priming: 5 oz. of  priming sugar.

I asked for the grains to be crushed to gauge the quality of the milling and selected the liquid Wyeast option.  The crush looked a bit coarse, but ended up being excellent. Pricing on the kits is very reasonable, though shipping will kick the overall price above what you will likely pay from a local shop.

The kit came with a two page instruction sheet with the basics for an all-grain batch.  The instructions were fine, but I would not want to rely on them for a first ever all-grain. For one, the instructions provided for fly-sparging which is not newbie-friendly.  It would be helpful to include batch sparging instructions, but it's also reasonable to assume the brewer is familiar with one or the other method. The instructions also suggested testing the viability of the yeast 1 to 2 days before brewing.  This isn't too reasonable for a Wyeast smack pack, but better than finding out the yeast is dead when done brewing, I suppose.  Still, the instructions aren't intended to be a a how-to guide, so I'm nit-picking here. 

For the initial mash, the instruction called for 1.25 quarts per pound of grain with a mash temperature of 152 degrees.  I like a bit thinner mash, so bumped it up to 1.5 quarts, but agreed with  the 152 degree temperature for a bit dryer resulting flavor. The kit provided 1 ounce of Challenger hops for bittering, but the instructions called for using only half of that.  Frankly, that didn't seem like nearly enough bitterness (and the various brewing recipe calculators agreed) so I used the entire 1 ounce.  The kit called for an ounce of Tettnang hops  for the final 2 minutes of the boil for aroma. Both hops were in pellet form.  I like using whole hops when possible, but pellets work just fine and these smelled great right out of the vacuum sealed packages.

The Wyeast Thames Valley was a variety I had not run across before, but what the heck.  Jared at our local Summer Sun Homebrew Supply talked me into using Wyeast's Ringwood Ale - another one I wasn't familiar with - for my recent IPAs and that has been a spot on recommendation.  The Wyeast was 2.5 months old, but readily swelled to the max four hours after breaking the smack pack. I had nearly constant bubbling through the air lock about 20 hours after pitching it.

The instructions included two methods for adding the coffee to the stout.  The beans could be added directly to the boil, but the result would be more bitterness from the boiling and fewer aromatics from the "scrubbing" effect of the vigorous fermentation in the primary fermenter. The preferred method is to brew the coffee and add it to the secondary fermenter.  The instructions call for adding 48 ounces of coffee which seems like a lot and would certainly drop the gravity.  Predicted starting gravity from the instructions is 1.042 to 1.046, but mine was 1.052 despite having about 5.2 gallons remaining after the boil (and I make no claim to a high brewhouse efficiency). The addition of the coffee to the secondary fermenter may well bring the gravity down closer to the predicted level.

Overall impression?  It will be another 4-5 weeks before a taste test, but the kit itself was just what you would expect and quite good.  The instructions could be improved, but when it comes to all-grain it is safe to assume the brewer knows the variety of methods and techniques available. Each technique has pros and cons and thousands of opinions on which are the best.  Pick what you like and run with it. The kit has everything you will need for whatever method you use.

So, why pick a kit from Midwest Supplies?  I am fortunate to live in a city with a great local homebrew shop - Summer Sun Brew Supply - and it is great to be able to bounce ideas off the guys there and get some expert advice.  I also like to create my own recipes and tweak them for a variety of desired flavors and characteristics.

Yet, not everyone lives in an area with access to a place like Summer Sun.  In that case, these kits from Midwest are a great option.  Plus, not everyone likes to create recipes and it is sometimes a struggle to know where to start.  These kits have been carefully thought out and tested.  You can brew one up, taste a few pints, and get an idea what you like and don't like from the design of the kit.  Need more body? Less bitterness? More roasted bite? Now that you have a base, it's easy to change things up by tweaking the ingredients in your own recipe formulation.

The last "kit" I opened some 16 years ago involved opening up a couple cans of pre-hopped malt and boiling it for a few minutes.  It's safe to say brewing kits have come a long way from those days and Midwest Supplies puts together some very fine options. Taste test coming up in a few weeks.
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Midwest Supplies, just outside Minneapolis, MN, is "the largest wine making and home brew supply shop in America and was voted the Twin Cities Best Homebrewing Supplies shop for 2012."  They provided the ingredient kit at no cost to us for purposes of review.  Have a product you'd like us to review? Send a note to: alan @ missoulabeerweek.com.

Bridger Brewing Co: Combining Craft Beer and Craft Pizza in Bozeman

Bozeman's busy craft beer scene is about to get a new member.  Located directly across the street from the Fieldhouse on MSU's Campus, Bridger Brewing Company was a proverbial beehive of construction activity when we stopped in last week for a preview tour of the facilities.  Co-owners David and Jim and Head Brewer Dan graciously took time out of their day to show off the progress during our chance visit through Bozeman. Without a doubt, we're excited to get back once they're up and running.

Expect a variety of innovative brews to always be on tap from David Breck and Dan Pollard's work on the brewing side. (I couldn't get them to reveal what the first beer would be.)  Dan previously brewed for Pelican Pub and Brewery, a frequent award winning brewery on the Oregon coast.  Dave has previous experience at the now-closed Spanish Peaks Brewing, Full Sail Brewing Co. and Snoqualmie Falls Brewery. The 10 bbl brewing system was just being installed and space remained for a bit of expansion and perhaps some future barrel racks.

Jim will be running the kitchen side, following up on a long held dream of starting a restaurant. He's been a guide in the Bozeman area for many years and will bring a love of the outdoors and the area into the kitchen.  Using locally sourced ingredients, Jim plans to create pizzas that are every bit as craft as the beer -  several varieties of pepperoni will be on hand including a bison version, for example.  Initial plans are to offer slices during lunch and whole pies at dinner time.  Is there any better pairing than craft beer and craft pizza?

Look for Bridger Brewing Company to open mid-February-ish.

Montana Brewers Association Wades Into The Craft Versus Crafty Quagmire

The Brewers Association (that's the big, national one, not the Montana one) recently stirred up a major backlash when its op-ed piece appeared in the St. Louis Post-Dispatch on December 13, 2012.  The piece was written by Charlie Papazian and Bob Pease, President and COO of the Brewer's Association, and Dan Kopman, CEO of Schlafly Beer in St. Louis.  

In a nut shell, the piece lambasted non-craft brewers for entering the "craft" market using tactics which do not provide full disclosure about the origin of the product. The Brewers Association defines a craft brewer as being small, independent and traditional.  

Those are fine qualities, but as the resulting controversy demonstrated, the Brewers Association's definition draws a line in the sand many "craft" beer fans are having trouble accepting.  The Association is also being a bit crafty.  While it defines what a craft brewer is, it does not define "craft beer." It leaves that determination up to us beer drinkers.  That appears to suggest a non-craft brewer can nevertheless brew craft beer and vice versa.  That doesn't make any sense. 

So, I was a bit surprised to see the same op-ed piece - altered to include Montana specific details - appear in the Great Falls Tribune this week.  This time, the authors were listed as Charlie Papazian, Bob Pease and Tony Herbert, Executive Director of the Montana Brewers Association. 

Tony Herbert does a nice job adding Montana details explaining the economic impact of the Montana's brewing industry and otherwise encouraging support for local breweries. Yet, the heart of the "craft versus crafty" debate that caused a major stir throughout the brewing and beer blogging world remains front and center.  The Montana Brewers Association also posted the op-ed piece on the front page of their website with the title "Craft versus Crafty? Think about what you are drinking."  (Actually, their title has a misspelling and reads "Craft versus Craft," but I have no room to talk when it comes to typos.)  

While it is an important issue that bears discussion, the manner in which the Brewers Association (the big one) distinguishes between craft and non-craft brewers was quickly exposed as being . . . . problematic.  The op-ed piece specifically mentions products manufactured by AB-InBev and MillerCoors that you might not have know were brands from the big boys.  "Faux craft" beers according to the Brewers Association.  Trickery to make you think you're buying something you're not. 

Bud and Coors have long been easy targets for craft beer fans, but the Brewers Association didn't stop there.  They also issued a chart showing who was and was not a craft brewer and that's where the real firestorm began.  

My thoughts on the subject (which include links to more of the reaction) ended up being our year-end close-out post on December 31.  Read it, if you like, or take the easy way out and stay here for the point: distinguishing between craft and non-craft brewers is no longer as easy as choosing between bitter, crummy, yellow fizz and wonderfully delicious "craft" beer.

The reaction that hit home the most for me came from Jace Marti, a sixth generation owner of August Shell Brewing Co. According to the Brewers Association, August Shell is not a "craft brewer" because they use adjuncts in their beer and, therefore, are not "traditional." 

Yet, Jace politely and directly explained why: When August Schell emigrated from Germany and founded the brewery in 1860, he had to use the the ingredients available to him, including corn.  Corn was not used to cheapen the beer, but because it was the only way to brew a high quality lager beer in America.  Thus, Jace asks, why is August Shell being punished by the Brewers Association for using an ingredient which "started out of necessity, and has continued out of tradition?"

His question demonstrates the trouble many of us have accepting the "craft versus crafty" stance adopted by the Brewers Association.  Case in point: I recently traded two Ivan the Terrible Imperial Stouts from our local Big Sky Brewing Co. (a craft brewer) for two Bourbon County Brand Coffee Stouts from Chicago's Goose Island Beer Co. (a non-craft brewer). Yes, I am somewhat conflicted that Goose Island, brewers of the Bourbon County Brand lineup, is now owned by AB-InBev and I worry about it's future.  But that stuff is freakishly good. (The Ivan is damn good as well.)  I've met some of the Goose Island brewers and they're not evil, corporate robots.

In response to the backlash, the Brewers Association subsequently pulled the chart, promising to replace it with something more positive.  Either the Montana Brewers Association is running late to the party, or didn't get the follow up memo.  

We are in the midst of a Montana legislative session that once again proves logic often escapes political debate.  The Montana Brewers Association is actively working the halls, looking out for all Montana breweries whether members or not.   Although the Montana brewing industry contributed almost $50 million to Montana's economy in 2011 alone, some legislators are more than willing to stifle the industry with restrictive, damaging regulation.  That is a far more important and pressing issue than worrying about the craft versus crafty debate.

Support small and independent craft brewers across Montana?  Check. No one needs to tell us how important that is.  Help give them a chance to thrive? Check.  Create more jobs? Check.  Boost the economy? Check.  These are the reasons the MBA exists.  They are well worth thinking about when we choose what to drink, but not with blind adherence to the "craft versus crafty" line in the sand drawn by the Brewers Association (the big one).

What sounds good in a vacuum may actually suck when considered in context.

Montana Boutique Beer/Wine Shop License Bill Tabled

House Bill 204, to create a new license for beer and wine bottle shops, came before the House Business and Labor Committee this morning.  But before anything could happen with the bill, the sponsor, Representative Christy Clark, asked the Committee to table it without a hearing.  Given the huge workload during the session, they readily accepted her request.

In Montana, only "bona fide" grocery stores and pharmacies may currently sell beer and wine for off premise consumption from a retail store.  HB 204 would have permitted true bottle shops without having to go through the gyrations of stocking a minimum of $3,000 of food items to be considered a bona fide grocery store.  Limited tasting events were also part of the bill (our full explanation of the bill is here).

When a bill is tabled at the committee level, especially without a hearing, the bill is basically dead and can only be revived in rare circumstances.  A sponsor may ask to have a bill be tabled for a variety of reasons. The sponsor may have learned of overwhelming opposition and decided the bill should not occupy any more of the legislature's time.  There may be a similar bill in the works by another party.  Given the nature of the legislature, it could be part of a deal pertaining to some other piece of legislation, or the result of party politics in a particular area of law.

We have no indication of the reasons in this case, but have asked Representative Clark to comment.

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

Montana Legislative Update for Tuesday, January 22

Here's a brief update on beer related items at the Montana Legislature for Tuesday, January 22, 2013.

HB 58, creating a brew-on-premise license, easily passed the House by a 70 to 29 vote and has been transmitted to the Senate for its consideration.  Along the way, the bill was amended to clarify that a licensee was prohibited from selling beer or allowing the consumption of alcohol on the premises.  That last one is tough to take.  I have no idea how brew up a batch of homebrew without cracking one open during the process (which might also explain some failures).  The license fee was also dropped from $400 to $40 and the renewal fee dropped from $200 to $20.

HB 204, creating a new license for a boutique beer and wine shop, is scheduled for its first hearing this morning at 8:30 a.m. before the House Business and Labor committee.  It would allow traditional bottle shops and limited tasting events. For details on this bill, see our story from last week.
[UPDATE:  At the committee meeting Tuesday morning, Representative Clark, the bill's sponsor, asked the Committee to table the bill without a hearing and the Committee honored her request. No word yet on the reasons why.]

Representative JP Pomnichowski has a bill ready to be introduced which would allow limited wine tasting events by persons holding a table wine license for the sale of wine for off-premise consumption. The bill is identified as LC 1125.  A license holder could conduct up to twelve tasting events during the year.  No limitations on the amount of wine served are proposed. (The boutique beer and wine license would limit tasting events to one ounce pours and a maximum of ten samples.) However, only those establishments which derive more than one-half of their annual revenue from the sale of wine would be permitted to obtain a license to hold tasting events.  We've asked Representative Pomnichowski why beer is excluded from this bill, but have not received a response.

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

MTA Shelves Proposed Bill To Limit Tap Rooms

Less than 24 hours after Growler Fills broke the news about the Montana Tavern Association's proposed bill to enact disastrous limits on Montana's breweries, the bill (LC 1322) has been put back on hold and, word has it, won't be coming back.
[Note: as of 1-17-13, the title of the bill request has changed]

The bill would prohibit brewery tap rooms from selling more than 10% of their annual production at the brewery itself.  Since most Montana breweries sell far more than 10% of their production at tap rooms (several sell 100%), the bill would effectively force Montana's breweries to switch to virtually all distribution - to be sold in the MTA's member taverns.  It doesn't take much to see bill was not intended to provide the taverns with more beer, but to eliminate Montana's hugely successful tap rooms.

It is no secret the MTA has long been at odds with the breweries, largely thanks to Montana's license quota system which fosters turf wars and competition between segments of the industry which should be working together.  Still, it was odd to see the MTA propose a bill with such significant consequences given the wild popularity of the Montana craft beer industry.

From casual beer drinkers to barely growers, the response was immediate - and not particularly kind.  Yesterday's story was the most shared post out of our three-plus years of work and demonstrated how quickly social media can gather people around a common interest.  Stay tuned for continuing coverage of the 63rd Montana Legislature as well as plenty more craft beer news, events, and discussion.

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

Montana Tavern Association Takes Aim at Montana Tap Rooms

Montana doesn't have tap rooms, a point I'm reminded about by John Iverson, the new lobbyist for the Montana Tavern Association.  They have sample rooms.  That's what the law calls them.

From the MTA's perspective, they've become far too successful.  One industry representative who asked to remain anonymous describes it this way: They were supposed to be small, concrete rooms with whitewashed walls - instead, they've become the most popular bars in the state.

We've written about them many times.  There's something special about Montana's tap sample rooms. Intended or not, the tap sample room limitations (48 ounce/person/day between 10 am and 8 pm) have created family and community friendly places to gather, catch up on all the news, laugh with friends, and enjoy locally made beer straight from the source. All before 8 p.m.

That's not okay, says the MTA.  They were never intended to have pool tables, frequent live music, or otherwise be warm, comfortable and inviting places.  These amenities should be reserved for those who purchase beer/wine, or all-beverage licenses like the MTA's members. 

John readily admits Montana's breweries and their tap sample rooms are complying with the laws as they're written.  Its the spirit and intent of the law they're violating and the MTA wants to do something about it.

The MTA is pushing a bill currently in the drafting stage titled "Limit beer sold on premises of small brewery to 10% of annual production." It is identified as LC 1322.  Though the text of the bill is not yet available electronically, the title tells everything you need to know to understand it.  [Note: as of 1-17-13, the title of the bill request has changed.] The bill has been requested by Representative Jeff Welborn (R-Dillon) who, perhaps not coincidentally, does not have a brewery in his district.

Another bill in the works from Representative Ellie Boldman Hill (D-Missoula) would allow breweries to "stack" licenses. Breweries are not allowed to own all-beverage or beer/wine licenses under current law.  Representative Hill's bill would change that, allowing breweries to also purchase an all-beverage or beer/wine license. Such a license would effectively allow the brewery to eliminate the tap room limitations of 48 ounces, per person, per day, while permitting sales between 8 am and 2 am. It is not at all clear whether the MTA's bill is in cooperation with Representative Hill's bill, or in retaliation for it.

That's the model the MTA prefers because, the MTA says, it puts the breweries on a level playing field with its members.  Breweries are set up to be manufacturers who supply the taverns with product for retail sale.   Thanks to the quota limits on licenses, it also means the breweries would need to purchase existing licenses from the MTA's members if they wanted to stay in the retail game.

According to the MTA, eight (going on nine) breweries currently operate with "closely affiliated" licenses.  Think Tamarack Brewing Co.  Tamarack's Lakeside location has all the look and feel of a brew pub.  In reality, the brewery is separate from the restaurant and bar and has no tap room.  Thus, the MTA's bill would have no effect on Tamarack because 100% of the Tamarack's sales come from distribution, not tap room sales.

Because Lakeside, MT, is in a quota area with excess licenses, Tamarack's closely affiliated restaurant/bar was able to purchase its all-beverage license for $400.  Conversely, it's Missoula restaurant/bar (which does not produce beer and is in a quota area where licenses are over-allocated) paid $750,000 for its all-beverage license.  Great Northern (Whitefish), The Front (Great Falls), Montana Brewing Co. (Billings), and Lone Peak (Big Sky) are some of the others operating under this model.

Although many Montana breweries currently sell 85% to 100% of their production at the brewery, the MTA does not believe the bill will have disastrous consequences.  They have prepared numbers to show that breweries are perfectly capable of switching to a 90% distribution model, in large part because profit margins on a keg of beer are high.  The fallacy in the argument is the presumption that the market - provided by the taverns - can absorb such a switch.

Tap and shelf space is limited.  The success of Montana's tap sample rooms demonstrates the taverns are not providing an experience Montanan's want.  To this, John notes Montana's breweries will need to convince taverns to convert taps from, say, an AB-InBev product to a local product.  If they can't . . . .

Montana's breweries gained the right to sell beer for on-premise consumption during the 1999 Montana legislative session.  It was a grand compromise struck between the MTA, the breweries and others.  There were also only a handful of breweries at the time. Not even the most optimistic among us could envision the explosion in craft beer's popularity.

Fast forward to 2013.  There are 36 distinct breweries with three more under construction. Approximately two-thirds of those will be affected by this bill.  New breweries will need to think much harder about jumping in.  There is no other way to put it:  this bill is a serious game changer.

No matter how you slice it or what kind of spin you put on it, the breweries are playing by the rules they've been given.  They have made decisions and invested millions of dollars into their facilities based on the rules we can all read.  They are creating jobs, buying Montana agricultural products, and making significant contributions to Montana's economy.  If their tap sample rooms were intended to be small, concrete rooms with whitewashed walls, someone forgot to insert those provisions into the law.  Whatever compromise was reached in 1999, a brewery opening in 2013 cannot possibly be expected to follow unwritten rules it had no part in creating and can't find anywhere under the actual law. 

Yet, the MTA says it IS in the law.  That's why Montana law calls them sample rooms, not tap rooms.

During the 2011 Legislative Session, the breweries tried to shift the tap room hours to 12:00 pm to 10:00 pm.  The MTA cried foul, loudly decrying the brewers for reneging on the deal struck in 1999. Yet, when faced with the suggestion that the MTA's bill does just that, John vehemently denies it.  The bill is intended to return brewery tap sample rooms to what they were intended to be in 1999, the MTA says.

Whatever you call them, they are nevertheless sample rooms which - since 1999 - have been allowed to sell each patron 48 ounces per day between the hours of 10 am and 8 pm.

Whether any of us want to couch this bill in terms of an old compromise, the spirit of the law, the intent of the original legislation, or any other spin, it's really about one thing: competition. And as long as we're being accurate, there are no "taverns" under Montana's alcoholic beverage laws.  They are "licensed retail establishments."

It remains to be seen whether LC 1322 will be actively pursued or is being drafted to serve as a warning.  Either way, what promised to be a rather innocuous legislative session just got a lot more interesting.

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

Boutique Beer Shop License Introduced in MT Legislature

True beer and wine bottle shops will be allowed in Montana for the first time if House Bill 204 finds favor with the 63rd Montana Legislature.  The bill, sponsored by Representative Christy Clark, would create a new license category for retail sales and also permit limited tasting events for such shops.

Presently, only "bona fide" grocery stores and pharmacies may sell beer and wine for off premise consumption from a retail store.* A "bona fide grocery store" is defined by the Department of Revenue as a retail establishment with a minimum retail inventory of $3,000 consisting of at least three different types of each of the following items: meats, vegetables, fruits, bakery items, dairy products and household supplies.

HB 204's new license category would eliminate the requirement to be a bona fide grocery store or pharmacy, but impose restrictions on hours of operation to between 9:00 a.m. to 9:00 p.m.  Persons holding a current beer and wine license for off-premise consumption would be allowed to convert that license to a boutique license.

The new boutique operations would be allowed to hold up to twelve tasting events in a calendar year by paying a $50 annual fee for a tasting events permit.  An individual sample could not exceed one ounce and a person could sample up to ten servings at a tasting event.  (Do the math, it's an easy one.)  Oddly enough, the bottle shop can stay open an extra hour if hosting a tasting event.

While I don't understand the need to treat the hours of operation differently from a grocery store or pharmacy (which can sell beer between 8:00 a.m and 2:00 a.m.) I'm not sure the proposed hours are much of a concern.  Simlarly, I'd prefer the number of tasting events be doubled (at least), but the bill would allow twelve more than current regulations.

Unfortunately, the new license sets up a bit of an odd conflict.  A place like Toppers' Cellar in Helena would almost certainly convert its license to a boutique license.  Doing so would allow such a place to hold twelve tasting events during a calendar year.   Conversely, Worden's Market in Missoula - one of the best places in the city to buy beer and wine - could not do so because the new boutique license prohibits a bottle shop from carrying more than $3,000 worth of food items in its inventory.  Thus, a place like Toppers could holding tasting events, but Worden's, with its great deli and food market, could not.

HB 204 has been referred to the House Business and Labor committee and a hearing date will be set soon.  

Another bill in the drafting process (LC 1125) is tentatively titled "Allow tasting event by limited sellers of wine consumed off-premises." No text is available yet and it will be interesting to see how it differs from HB 204. The title obviously does not mention beer, but perhaps it is intended to address the Toppers/Worden's dichotomy - at least for wine.**

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

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* Growlers are a different story and may be filled by breweries and establishments with an on-premise license.  Certain on-premise consumption license holders may also sell other packaged beer and wine.
**  Why do we continue to distinguish between sellers/makers of wine and beer?  Can we put the class distinctions to rest, please?

Brew-On-Premise License Gets First Hearing

The 2013 Montana Legislature got underway on Monday, January 7, and wasted little time in taking up the first significant legislation pertaining to beer.  House Bill 58 would create a new license for brew-on-premises operations.  The bill received its first hearing before the House Business and Labor Committee early Friday morning.

The bill is sponsored by Representative Pat Noonan and was requested by the Department of Revenue.  Representative Noonan said the bill has generated quite a bit of interest, including calls from reporters wondering if this was an attempt to encourage a new business idea. It's not. 

Rather, the intent of the bill is to regulate businesses (some of which are already operating) which provide space and equipment for private individuals to brew their own beer.  Think curious beginners, or homebrewers who do not have the space to brew (or whose wives or husbands don't like the smell).  It is legal under federal law within certain guidelines, but Montana has no regulations on the books to keep such businesses within the guidelines.

 

Speaking for the Department of Revenue, Shauna Helfert noted that current federal and Montana law allows people to brew at home for personal consumption and the Department has no interest in changing such provisions.  (Thank goodness.)  

Under the new license, a brew-on-premise operation can rent space and equipment and provide knowledge on the process, but cannot provide physical assistance.  Providing physical assistance converts the brew-on-premise operation to a manufacturer of alcohol which is regulated in other ways.  A license would cost $400 with a $200 annual renewal fee. 

Prohibited physical assistance includes: filling of vessels with brewing ingredients; mixing of ingredients; movement of beer and malt beverages from one container to another; or filtering and bottling of the final product.  It does not include: cleaning, maintenance, and repair of brewing and bottling equipment; maintenance of climate and temperature control; disposal of spent grains and wastes; quality control of beer and malt beverages, including laboratory examination; or preheating of vessels or containers.

Three people spoke in favor of the bill,  Tony Herbert, Executive Director of the MBA; Kristi Blazer, Executive Director of the Montana Beer and Wine Distributors Association, and John Iverson, on behalf of the Montana Tavern Association. The MTA requested an amendment to make it absolutely clear that these premises cannot sell alcohol. 

There was no opposition to the bill and questions from the Committee raised no significant issues.  Odds are, HB 58 will have no trouble passing.  As Representative Noonan noted in closing, if the bill does not pass, nothing happens to the existing or future businesses.  They merely proceed on without regulation. (And who doesn't like more regulation?)

Executive action on HB 58 could come as early as Monday.

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

Kalispell Finally Gets A Brewery

Billings has six. Missoula four.  Bozeman, Helena and Great Falls have two each. Butte is soon to get its second one.  Heck, even Philipsburg and Wibaux have one.

For some reason, Kalispell has long remained the only one of Montana's seven "large" cities without a brewery.  Missoula's Bayern Brewing Co. kicked things off in the modern era 25 years ago. Smaller towns like Hamilton, Stevensville, and Belgrade (two each) have had the good fortune to embrace the benefits of a community brewery for many years.

That's about to change as discussed in this story from Kalispell's Daily Interlake.  Long-time homebrewer Cole Schneider, along with his wife and fellow U.S. Telemark Ski Association team member Maggie Doherty, have the brewery under construction at the corner of 4th and Main Streets. (Incidentally, that's a couple doors down from some of the best coffee in Montana at Colter Coffee Roasting.)

I've visited Kalispell often and always found it to be an odd place for beer.  It's in a similar place Great Falls was about 2 years ago - no local brewery, a few good taps at a couple of places around town, but overall lacking in any real craft beer scene.  Then, Bowser Brewing Co. opened, the Steinhaus switched its taps over to 21 Montana brews and, more recently, The Front Brewing Co. opened and everyone realized there was a huge pent up demand for good beer.

Kalispell has Hops Downtown Grill which is doing great things with beer and food.  Moose's Saloon has the largest selection of taps, but few rotate with anything unique. The North Bay Grille has had several  interesting, rotating taps for a few years, but the quality and consistency of the food and service has taken a real nose dive.  Tamarack, Flathead and Great Northern breweries are all nearby (and soon Desert Mountain), but Kalispell has not had a brewery to call it's own.  As Montana beer lovers know, there is something very special about our local tap rooms.  In many cases, they've become a kind of community center - the English pub of olden days. 

There is every reason to think Kalispell is about to embark upon the same path.

Rendering from CTA presentation to Kalispell Chamber of Commerce

Three Montana Winter Brewfests Set for February

Think a little snow and cold temperatures get in the way of some outdoor brewfest action? If so, and you're a Montana resident, you may be living in the wrong state.

For the past three years, Bigfork, MT, has laughed in the face of old man winter while holding an outdoor brewfest on the town's idyllic streets.  Temperatures have ranged from the single digits to the the mid-forties, but neither cold nor snow have deterred the hardy from their beer.

This year's Bigfork Brewfest will take place on Saturday, February 23, 2013 from 3 p.m. to 10 p.m. on Mill Street at the south end of downtown.

Moving outside for the first time this year, the Missoula Winter Brewfest sponsored by the Missoula Downtown Association will take place at Caras Park on Friday, February 15, 2013 from 5pm to 10pm.  Word has it they're planning some unique ways to make it warm, cozy and inviting.

Philipsburg, MT, is getting into the brewfest action for the first time with an event sponsored by Philipsburg Brewing Co. set for Sunday, February 17, 2013 from noon to 6pm. The brewfest coincides with a hockey tournament which runs February 15-17.

Meanwhile, Great Northern Brewing Company's Black Star Beer Barter will take place this year on February 2. 

We'll try to provide more details as we get closer to the events.  

The Session No. 71: Brewers and Drinkers

This month's Session* topic is hosted by John at Homebrew Manual. He raises the topic of brewers and drinkers and writes:

Brewers and Drinkers is about your relationship with beer and how it’s made. Do you brew? If so why? If not, why not? How does that affect your enjoyment of drinking beer?

Here are some things to think about if you’re stuck:

• Do you need to brew to appreciate beer?
• Do you enjoy beer more not knowing how it’s made?
• If you brew, can you still drink a beer just for fun?
• Can you brew without being an analytical drinker?
• Do brewers get to the point where they’re more impressed by technical achievements than sensory delight?
• Does more knowledge increase your awe in front of a truly excellent beer? 

I started homebrewing somewhere around 1997 and have dabbled in it off and on ever since. It is getting harder to remember, but craft beer was just emerging in Montana back then and choice was limited compared to today's standards. Homebrewing offered a window into the magic of beer and the possibility of greatly expanded choice.

Truth be told, I wasn't making very good beer, even acknowledging I'm my own worst critic.  There were a few successes, including the time a scotch ale blew the top off the fermenter and somehow still turned out delicious.

Moving to all-grain brewing and playing around with my favorite hops to brew IPAs has changed all that. The process is more satisfying when starting from scratch (not to mention time consuming) and brew day is a great adventure of wonderful aromas and the promise of the next great thing. I've been warned at home not to let the IPAs run out - music to my ears.

So, let's take a look at John's questions:

Do you need to brew to appreciate beer?

Absolutely not. But it helps. This is true of any subject we express an opinion about. I can appreciate that my favorite college football team needs to fire it's offense coordinator even though I never played the game. Yet it would help me articulate the reasons why and provide more credibility to my opinion if I'd played, and even better if I'd coached.

Being a home brewer provides perspective, appreciation and a little street cred, though it is considerably different than commercial brewing.  It provides insight into the process of recipe formulation and the variations which ensue from the smallest of changes (or errors).  There is no doubt it has increased my appreciation for those who do it well.  

Do you enjoy beer more not knowing how it’s made?

I can't answer that question except to to speculate.  I've known how it was made for nearly twenty years and can't remember a time during my craft beer exploration that I didn't at least understand the basics.  But beer isn't sausage. It is a wonderfully interesting marriage of art and chemistry.  I suspect all craft beer drinkers are at least curious to know how this great beverage is made and I can't imagine anyone liking beer less because they learn the process.

If you brew, can you still drink a beer just for fun?

Absolutely.  I do it all the time. Beer is a luxury and as a consumer and blogger, it's good to remember not to take things too seriously at times. It's fun to compare, contrast, deconstruct and critique.  It's equally fun to pour a favorite while kicking back in the shade on a hot summer day. Different fun for different days.

Can you brew without being an analytical drinker?

This question can be read two ways.  Is it asking whether you need to be an analytical drinker in order to brew? Or does it ask whether being a brewer carries a danger of turning you into an analytical drinker?

Is being an analytical drinker a bad thing?  Do any of us just pick up a beer and drink it with no thought at all? There are beers I know I like.  Really like.  I reach for them when the mood strikes and get lost in the flavors.  I've already done the thinking about them. I equally enjoy trying new beers. Does paying attention to their aromas, flavors, colors and quality lessen the experience?  Hardly.

Do brewers get to the point where they’re more impressed by technical achievements than sensory delight?

Not me.  It took me a long time to switch to all-grain brewing because I was intimidated by what I didn't know and wasn't sure how complicated I wanted to get.  It turns out it's not that much more complicated and brewing has become more enjoyable. There's a certain point where anything I do for fun can reach a level where it's no longer fun.  Take fly fishing. For me, it's an excuse to wade the streams and let my mind wander to simpler pursuits.  But the moment I have to pump fish stomachs to determine what they're eating to select the proper flies, my fun is done. (Nice image, eh?)

With all-grain, I learned I could get a little more serious about it while simultaneously enjoying the process more and increasing the quality of my product. There are many more techniques and pieces of equipment I can add. Some I will.  But for me, most aren't likely to provide enough return on the investment.

Does more knowledge increase your awe in front of a truly excellent beer?

Nope. Try enough beer and the truly excellent ones will stand out no matter what you know about the brewing process.

There you have it. Another Session is in the books.  To the brewers and non-brewers out there, how do you answer these questions?

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*Today is the first Friday in January 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.

Beer Laws: Montana Legislature Gears Up for 2013 Session

Look out.  The 63rd Session of the Montana Legislature convenes Monday, January 7, 2013.  What it holds for the future of Montana is anyone's guess. 

The Montana Legislature meets every other year and only for 90 days. While the short, biennial sessions helps maintain a "citizen legislature," it also guarantees a whirlwind of frenzied action as our legislators try to make sense of more than a thousand proposed bills.

For 2011, the Montana Brewers Association made a push to shift the tap room hours, but the message received was loud and clear.  The road for such change still runs through the Montana Tavern Association.

What's up for 2013? Not the tap room hours. There are no plans to try to amend those this session, so get ready for two more years of a not-so-free-market stifling choice.

How about the 10,000 bbl limit? You'll recall Kettlehouse Brewing Co. pulled out of several Montana markets in March 2012 rather than produce more than 10,000 bbl, the point at which a tap room must stop selling beer for on-premise consumption.

Word has it the MBA was ready and willing to help Kettlehouse and the 2-3 other large-ish breweries get the limit raised. Rather than present a united front, Kettlehouse, Bayern and others dropped out of the MBA, choosing instead to go it alone.  It doesn't take a rocket scientist to figure the big boys in Montana's craft brewing scene might be willing to horse trade certain privileges they no longer need in order to obtain a higher bbl cap.

Still, a concrete effort to raise the cap, if any, remains in the shadows.

Here's what we do know:

• The Montana Department of Revenue is asking the legislature to create a license for brew-on-premise operations.  A hearing on the bill (HB 58) is scheduled for January 11 and you can find the text of the bill here.
• A new "boutique beer or wine license" is in the works for off-premise consumption (LC 1294).  Presently, only grocery stores and pharmacies can sell beer and wine for off-premise consumption, precluding the traditional "bottle shop" common in many other states.  (Yes, there are obvious workarounds.)  This bill would authorize bottle shops and permit tasting "events" to be held up to twelve times per year.  Patrons would be limited to ten, one ounce tastings per event.   While I hate these limits, it's at least something.  The unapproved draft bill is available here, but is subject to change.
• Revisions to Montana's restrictions on direct shipments of beer and wine will be a topic of conversation.  Two bill draft requests have been made, one to license and regulate wineries selling and shipping wine directly to MT consumers" and the other to generally revise laws affecting the sale of beer or wine through mail." No bill text is available yet.
• Legislators have staked out numerous other placeholders for potential bills affecting generically identified subjects like "generally revise state liquor laws," "generally revise brew pub laws," and generally revise laws related to microbreweries."  Some of these will turn into specific bills and some will not.  

Stay tuned. There's plenty more to come over the next few months.