MountainBeers

Proposed Bills Seek to Boost the WV Craft Beer Industry

Posted on January 27, 2015

January has provided a flurry of proposed legislation promoting the craft beer business in West Virginia. Within the last week, three separate bills were proposed, each revising and adding language to the current framework. As each bill was proposed by different senators, each differs in content.

First, I’ll provide my understanding* of the current laws that will be affected by these bills, as it is helpful to know the background:

• Only brewpubs can sell two growlers per day; brewers and restaurants are not permitted to sell growlers (see Black Sheep/Charleston Brewing issue);
• Brewers are not permitted to offer product samples for consumption at the place of manufacture;
• WV-based breweries must pay an annual license fee of $1500; this is a flat fee that does not vary based upon production. Non-resident brewers pay the same $1500 fee, and brewpubs owe a $1000 annual fee.
• Brewers and brewpubs must furnish a bond to the state to secure payment of taxes (etc.)

Each bill offers its own benefits to West Virginia’s craft beer industry, but not each bill provides the same degree of change for this high-growth industry.  Below I’ve listed changes that provide the greatest amount of benefit and flexibility to the state’s craft brewers (in my humblest of opinions):

• Bill 273 would allow brewers and brewpubs to sell up to four growlers per customer/per day. Next year’s Super Bowl party could be totally stocked with fresh, local craft beer!
• Bill 273 would permit brewers to offer two ounce samples at the brewery, capped at 10 samples per person/per day. Notably, the brewer would then need to be licensed as a retailer and provide complimentary food (type unspecified; presumably, snacks would be fine) as well. Contrast this with Bill 290, which allows 2.5 ounce samples but caps the per person total at 16 ounces.  Good luck to brewers who try measuring out the maximum of 6.4 samples!
• Bill 273 introduces a tiered, production-based license fee scheme for resident brewers. Those producing less than 12500 barrels of beer annually would pay $500, those producing between 12501-25000 barrels annually would owe $1000, and, finally, those producing greater than 25000 barrels annually would pay $1500 (though, strangely, the latter category would seem to be prohibited entirely by new language added in 11-16-6a(e) of the bill).  However, this tiered structure would also require brewers to produce annual projections of production, as well as an additional annual report stating actual barrels produced.
• Bill 273 removes the bond requirement for brewpubs (only).
• Bill 290 establishes a communication mechanism whereby licensees and license applicants can request information such as application status (etc.), and the state must respond within one business day.
• Bill 290 reduces the annual brewpub license fee to $400.
• Bill 297 appears to greatly expand growler sales, and would seemingly solve the Black Sheep/Charleston Brewing situation by allowing growler sales by all Class A and Class B retailers who obtain a proposed $60 Class G endorsement. In addition permitting growler sales in taverns and restaurants, this would also seemingly permit grocery stores (with a few basic qualifications) to sell growlers. This is common in larger stores in the Pittsburgh area, such as Whole Foods and the GE Market District.  Note:  Although growler sales would be greatly expanded, this bill also requires labels for growlers with beer name, ABV, and certain information about the retailer.  This will add an extra, potentially annoying step for retailers to manage when selling growlers.  I’ve seen this handled in other states by affixing a tag around the neck of the growler that contains the required detail.

All proposed legislation is now being considered by the Committee on Economic Development during the 60-day legislative session; hopefully, our legislators agree on changes with the most positive impact on the industry.  WV craft beer enthusiasts should be pleased that this topic is receiving much-needed attention, as these changes will fuel continued growth of WV small businesses that happen to sell craft beer.

(And, since the topic is being discussed, I hope also that the state’s 12% abv cap on beer is revisited; folks in our neighboring State of Ohio might have some important advice on the subject!  Moreover, there appear to be no changes in regard to non-resident brewers who wish to sell in WV; becoming licensed to sell in WV has been described as “extremely difficult” by one prominent craft brewer).

Cheers to positive change!

*I spent some QT with the proposed bills, and how they modified existing law, but I certainly can’t claim to be an expert.  Please feel free to comment if something is unclear or inaccurate, and I’ll happily revisit/research the bills.