Montana Breweries Vs. Montana Tavern Association 2013 (LC1429)

As a long time fan of craft breweries, commonly known as the makers of microbrews, I tend to keep up on the happenings in the scene.  I can’t say for certain just how many of these “nectar of the Gods” have hit my pallet, but I know the number of beers that I’ve either sampled or drank outright reaches into the thousands.  I’ve supported breweries since I could legally drink.  I hold them supremely responsible for my current state of beer knowledge, where I’ve shed every bit of beer racism (judging beer by it’s color) and have broken down all preconceptions of what I do and don’t like as far as malted beverages go.  They continue to challenge my pallet and they keep it as exciting as it is diverse.

Fast forward to my life in Montana.  At first glimpse, we have a thriving beer scene.  Within an hour’s drive of Missoula, I have access to almost 10 breweries and the state supports an ever growing number.  Seems every trip I take, I encounter a new brewery.  Great!  But, unless you keep up on the scene, you’re at risk of not knowing just how vulnerable this beer scene is.  Ever since I stepped foot in this state, I’ve watched the Montana Tavern Association (MTA, state lobbyist for taverns) go at it toe-to-toe with the breweries and the Montana Brewers Association (MBA, state lobbyist for breweries.)  You would think that Montana, one of the largest beer grain producers in the world, would generally have it’s shit together in these regards.  Hell, you’d think way up north here we could just drink and be left alone to nobody’s business…the rest of the world probably thinks we’re a bunch of drunks anyway.  (We are home to the #1 seller of Pabst Blue Ribbon in the entire country after all…)

You see, there’s a dark side to all this.  We have one of the most terrible liquor licensing structures that I have ever witnessed come out of a state.  While I don’t want to get into all the mechanics of the law, here’s what you need to know.  On one hand, the laws are inviting to new breweries and make it possible for brewer-Joe to relatively inexpensively obtain a brewers license.  This license only allows the brewery to sell 48 ounces per day/person and they must only operate between 10AM and 8PM.  On the other hand of general liquor licensing, our legislature rules with a heavy handed fist.  They only allow a specific number of liquor licenses (and thus taverns or even restaurants) to operate on a beer/wine license in a given area, and that number is tied to the population of that area.  This “magic” number of licenses is essentially determined by a bureaucrat, who knows nothing of the business, what the market will support and is absent of any studies for a given demographic.  Combine that with our legalized gambling and you have a recipe for high profits, low supply and insane demand.  Consequently, we’ve seen MILLION dollar liquor licenses be sold in this state.   With costs like that, a new-to-be brewery that just wants to make and sell beer would be bankrupt before they even opened their doors.

This brings us to the great MTA/MBA battle of 2013.  I’ve been awaiting the official introduction of LC1429, a proposed law that would “generally revise the laws” in regards to a brewery license…essentially pertaining to what can and can’t be done within the four walls of a typical brewery establishment.  Introduced by the MTA and a few select legislators, it was preceded by LC0653, which aimed to take a similar route of restricting the on-site sales capacity of a brewery, but at this time, appears even less aggressive than LC1429.   LC0653 has currently been withdrawn, but may still rise up by attempting a good-old 1-2 punch should LC1429 fail.

The text of this new bill has been withheld during the drafting process and so far, we’ve heard nary a peep from the bill’s drafters.  We’re hearing crazy talk like, “a brewery can’t provide popcorn,” and “there shan’t be any wicked devil music played at these locations.”  (Yes, you heard that right, the MTA may be advocating we drink and drive on an empty stomach.)  We also suspect that it will be even more draconian, potentially limiting on-site sales to a certain portion of a brewery’s entire production.  Again, these percentages will be a number determined solely by a bureaucrat and the MTA’s “imperfect” guidance, not any official demographic studies or input from “the competition”…the breweries themselves.  Such a thing would KILL small town breweries who can’t as easily gain a state-wide share amongst a highly competitive industry and it forces prohibitively expensive, ill-timed bottling equipment investments on small growing businesses that live and die by their local population.

A curious development in the story, and the motivation for explaining all this to you, came to my attention today.  The MTA has all ready taken to the defense and is proactively campaigning for this legislation.  They KNOW it’s a highly controversial bill and I’m certain they’re feeling the heat from constituents and breweries alike.  In this letter to the editor, the MTA literally complains about jukeboxes, an on-site game and the dimensions of an “appropriate” sized tasting room.  It falls short of criticizing the art work on the walls, peanuts being served to patrons and installing doors that allow people to enter the building.  They even went so far to defend the insanity of our liquor licensing laws, the very thing that creates all these problems to begin with.  Surely, I didn’t read them say that NOT ONE other state in this union might have some better ideas about modern liquor licensing than we do now?

I am the first to agree that yes, our breweries are probably siphoning off some business from local taverns and that sucks.  But, it would seem that the MTA won’t be happy coexisting with breweries until they’re forced into being cold, damp and dark outbuildings, with no bathrooms and extra licensing fees required to provide heat to patrons in the middle of winter.  I jest, but that’s really what this is about, isn’t it?  Breweries have become popular because they create inviting environments that focus exclusively on local craft brew.  They participate in their communities, create interesting events and work to draw every bit of traffic they get into their doors.  They’ve embraced social media and stay in contact with their customers.  The catch, for all of us, is that when it’s 8PM or you’ve had your three brews, you’re done.  Taverns have just as much opportunity to bring the competition, without any of the limits, but they’ve yet to realize that they can be successful if you serve a lot of local brews and don’t focus significantly on gambling.  (e.g. The Rhino, Tamarack Missoula, Flathead Missoula.)  There’s a lot of potential for a tavern to try and get a contract with Neptune, Carters, and/or any number of the excellent breweries in central and eastern Montana and try to bring their beer local to Missoula.  Do this both ways and you have a thriving industry that can become competitive enough for the national scale.  This benefits our grain growers, our farm workers, our servants, our business owners and not to mention, the people who enjoy great, fresh beer.

But instead, the MTA conspires in secret and threatens the very lively hood of small, local businesses that support Montana’s agriculture and supply decent paying local jobs.  In practically every way, this legislation has received zero input from Montana’s breweries and is exclusively designed to favor the powerful members of the MTA.

The bottom line is this.  I believe that our current liquor laws, while they certainly provide some good, create artificially inflated regulation expenses and generally harms Montana’s local industries.  We can point to 49 other states and say, “their laws are imperfect, too.”  Or we can take the first step to acknowledge that what we have isn’t working and needs ground up replacement.  We need to craft legislation with input from both tavern owners and modern breweries that benefits both taverns and modern breweries.  Our state’s liquor laws are in such a predicament because tavern owners and restaurants have spent ridiculous amounts of money on artificially inflated liquor licenses.  We need to protect these significant investments, that we created, to a certain degree.  The only practical way to overhaul this is to establish a sliding scale, over a period of 5-10 years, that eventually evens the playing field and still invites small business owners to step up to the plate by starting a new tavern or brewery.

I, for one, have read the legislation in other states and there’s a LOT we can learn from elsewhere.  That said, we have some unique challenges.  We have a need to accommodate gambling.  We need to recognize the significance of Montana breweries supporting Montana’s primary agricultural product.  We need to understand that the attitudes and preferences of today’s drinkers need to be accommodated to remain competitive.  But this nonsense of limiting local business growth and leveling complaints about a boom box, has to stop.

But hey, at least the local politics keeps me awake.  Want to do something about all this?  NOW is the time.  Next month, it will be too late.  You have to choose how you will be governed, or these choices will be made for you.

Please visit this page for information about what you need to do!  Time is of the essence!

UPDATE:  03/20/13 – Please read my updated analysis of LC1429 / HB616, which provides insight into the bill’s mechanics – the good, the bad and the ugly.  It also explains why, despite the good found in the legislation, we need to continue to oppose this legislation.

For good beer!