As West Virginia’s craft beer industry continues to grow, brewers are turning to the state legislature for help in expanding further. Members of the West Virginia Craft Brewers Guild presented some ideas at the state Capitol Tuesday.
Blackwater Brewing Co. owner and brewer Lincoln Wilkins told the Joint Committee on Economic Development that his industry is growing, but current state law is keeping it from becoming a bigger economic force.
Craft brewers have made their wish list and hope to help draft a bill that would bring about some of these changes. Lawmakers could consider the issue when they return full time in January.
So, here’s five things West Virginia craft brewers want to see changed at the statehouse:
1. A Streamlined Licensing Process:
As a member of the state craft brewers guild, Wilkins says the biggest problem is licensing. There’s a $1,500 resident brewers license just to make the beer. There’s an additional $1,000 license to operate brewpub on site.
At any other bar, that’s only a $150 license. Both the resident brewer and brewpub license require additional state bonds.
Wilkins says it’s much easier in states like Ohio.
“Really, these states have streamlined this process and either pulled back or structured their license process in such a way that is not such a burdensome financial amount on the breweries that are starting up,” said Wilkins.
Although the Guild believes breweries should have just one required license, West Virginia Alcohol Beverage Control Administration (ABCA) General Counsel Anoop Bhasin said integrating the licenses may be difficult, if not impossible.
“I think it would be problematic. There’s two different functions and two different tiers. We try to maintain a separation of those tiers and those functions,” said Bhasin.
2. Incentivize Start-Ups and Growth:
The West Virginia Craft Brewers Guild believes licensing fees should be on a sliding scale to incentivize startups. The guild argues that production costs on smaller scales are considerably higher than those of larger operations and the flat rate of $1,500 discourages potential businesses from getting started.
Instead, they argue that, as the volume of a brewer’s output increases (while production costs go down), brewers would be able to afford higher licensing fees.
3. Expanded Flexibility of Operations, Similar to Wineries and Distilleries:
Brewers also want more flexibility in their operations, hoping to match the ability of wineries and distilleries to have tastings, provide limited sampling, and sell more of their product directly to the public to be consumed off site.
The Guild argues allowing these provisions will benefit the tourism industry.
4. A Streamlined Labeling Process and Alcohol By Volume (ABV) Analysis:
The West Virginia ABCA requires a certified laboratory analysis of alcohol by volume and sales approval of products. Mountain State Brewing Co. owner and guild president Brian Arnett explained that process happens out of state and it can take up to 40 days.
“So, you have beer sitting there waiting for the analysis to come back. Then, it goes to the state and you have to wait for the state approval to come back as well. So, sometimes, you brew your beer and you’re waiting 60 days,” Arnett said.
The ABCA doesn't confirm the alcohol by volume analysis procedures. The Guild argues that brewers' analysis procedures are precise enough and a sworn affidavit should be sufficient.
5. More Flexible Distribution:
Brewers are also concerned about laws that lock them into long-term agreements with distributors. They contend current distribution franchise laws protect distributors from large-scale, out-of-state beer companies yet hurt small, in-state brewers by not allowing brewers legal recourse to end agreements.
Phillip Reale of the West Virginia Beer and Wine Wholesalers Association argued against breaking down the three-tier distribution system of brewers, wholesalers, and retailers.
“I don’t know that anybody would disagree with the notion that perhaps some of the fees maybe are higher than they should be or that you could try to streamline the process as much as you could,” said Reale. “But, in doing that, you have to be really careful that you don’t disrupt the control."
Bhasin of the ABCA points out that some changes have been made for brewers to better self-distribute but, federal case law dealing with interstate commerce puts limits states' ability to make certain changes.