As Craft Beer Culture Grows, Regulation Becomes Trickier


One of the issues with calling such a sprawled country home is the question of how do we unify as a single identity, while simultaneously celebrating our regional differences. Certain things, however, manage to hold us together. Popular culture, sports, national traditions, and 'Americana' brands like Coca-Cola, Budweiser and Coors all factor in this equation.

But the brand of beer you drink is arguably falling from grace in the world of American unifiers.

Craft beer, defined as a beer brewed in small quantity, distributed in a particular region, and with a distinctive taste, is quickly becoming one of the things that make us wave our local flags, a la regional cuisine. The niche market has been growing steadily for some years now, even as the overall beer market has been in decline. That gives some sectors of the craft beer world some serious balls for an industry vying for respectability.


“Technically what we are doing is grey market— sort of flouting the law and walking that line between legality and illegality,” Matt Simpson of The Beer Expert and said about the relatively recent phenomenon of craft beer trading. “The more light that we shine on it, the more attention is going to be noted by [shippers] and the law.”

While no one that Fusion spoke to has actually had run into trouble because of illicit craft beer trading, it’s just one example of the new legal issues that the industry is dealing with.

Since the repeal of prohibition, states have reserved the right to regulate alcohol within their borders. They have a three-tiered system for regulating alcohol that breaks it down by producers, distributors, and retailers. The craft beer world is quickly blurring all of these sacred lines, putting it at odds with every step of the process, as well as lawmakers.

In reaction to this new reality, several states are considering laws that could severely impact the growth of the now booming economy.


One of the cornerstones of craft beer culture is the tasting room— a place where patrons can sip the beers brewed on site, along with “guest taps” that come in from other local breweries. This collaborative method of helping promote breweries outside their respective establishments is coming under fire in Florida, thanks to a bill recently filed in the state legislature. “For us right now, it’s kind of hard to keep up with production. So if we do run out of a style of beer, we’ll put on a tap from a different brewery,” Amy Costello, an owner of Point Ybel Brewing in Fort Myers, FL told News-Press. “It’s a way to work together to promote different breweries and to get your beer promoted in different cities.”

This peer-to-peer marketing approach that craft brewers have organized is pissing off distributors, traditionally the middle men in the retail process. According to the legislative assistant responsible for the Florida bill, the law is intended to make “brewers and brewers compete with each other”, and “distributors and distributors compete with each other,” so “brewers aren’t competing with distributors.”


Conflict over the ability of breweries to sell and market directly to consumers is also playing out in Minnesota, where a local brewery recently announced plans to shut down and reopen across the state line in Wisconsin, due to what owner John Moore calls overregulation. His kind of brewery, called a brewpub, can only sell the alcohol they make on the premises, as they are unable to bottle and sell it. Moore says that while his beer has won awards few people know about it because he can’t sell his product outside his establishment.

And yet even in Wisconsin, brewpubs can only sell about 1,000 barrels in stores— about 330,000 12 ounce beers. That means that over time, Moore might have to press even farther east into Illinois, as many brewers have already done. "We have the same stupid laws [as Minnesota] that drive businesses out of state instead of encouraging them to stay in," Jeff Hamilton, an officer with the Wisconsin Brewers Guild told


In Massachusetts, a law that critics say essentially locks brewers into perpetual contracts with distributors is getting statewide attention.

Despite the strange cases seen above, welcome changes for the craft beer world could be coming in some places. In Maryland, for example, a recently proposed bill would raise the limit of beer brewpubs produce and allow local breweries to sell at farmer’s markets and state fairs. The liquor lobby is, predictably, not very happy with that proposal.


In any case, the Brewer’s Association, a group representing craft brewers from across the country, has made it their mission to see craft brewers make up 20 percent of the domestic beer market by 2020. In 2012, the latest numbers available, that number was 6.5%.

Succeeding in that goal could be an uphill battle considering some of the backwards alcohol laws that some states still have on the books when it comes to even drinking the stuff.


For example: in New Hampshire, you can only buy liquor at state run stores. And in Indiana, it is illegal for convenience stores to sell cold beer to consumers.

With the industry gaining critical mass and a devout following, changing those laws might be the goal of a new kind of lobby in state capitals everywhere.


Daniel Rivero is a producer/reporter for Fusion who focuses on police and justice issues. He also skateboards, does a bunch of arts related things on his off time, and likes Cuban coffee.

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