The Politics Of Beer

by lizard

Beer politics in Montana is fascinating for a number of reasons. One recent example of beer politics is republican Jeff Welborn’s (R-Dillon) failed attempt to move forward his anti-business regulation bill:

Draught Works Brewery owners Paul Marshall and Jeff Grant were busy reorganizing their brewing tanks last week to make room for newer, bigger tanks that will be delivered soon.

The new tanks will allow Draught Works, which opened in 2011, to eventually double its capacity, said co-owner Paul Marshall.

The young brewery is thriving in its home on Toole Avenue. But the growth planning at Draught Works continued with Marshall and Grant keeping a weary eye on what’s happening at the 2013 Montana legislative session.

Particularly of interest was a Montana Tavern Association-endorsed bill draft requested by Rep. Jeff Welborn, R-Dillon, which proposed limiting beer sold on premises of small breweries to 10 percent of annual production. The other 90 percent would have to be sold through distributors.

Draught Works sells 100 percent of its beer in its taproom.

“It would kill us,” Marshall said of the “90/10” idea.

The bill has been dropped, but it’s a frightening prospect for Marshall, who noted that the complicated set of state laws under which microbreweries currently operate will heavily dictate how his business moves forward.

Like Republicans at the national level, there doesn’t seem to be any principles involved when it comes to servicing special interest groups (in this case, the Montana Tavern Association) other than servicing that special interest group, even if it means crafting legislation that suppresses one form of business—microbreweries—in order to directly benefit their competitors.

I hope Dave Budge at The Montana Regulation Project is taking note of the desire of the MTA to put even more barriers up in order to stop business growth in Montana.

Another example of the hoops needed to expand a microbrewery is developing tonight, in the chambers of Missoula’s City Council, where Tim O’Leary is appealing council for a conditional use permit. The Missoula Independent reported a few weeks ago about what O’Leary has already had to do to even get to this point:

Last week, O’Leary announced via Facebook that Kettlehouse will soon split into three separate companies. Work is already underway to relocate the Myrtle Street brewhouse to an adjacent building, which will become the new headquarters for Kettlehouse Brewing. The newly established Myrtle Street Taphouse LLC—owned by O’Leary’s mother, Helen O’Leary—will take over the existing taproom location and is currently acquiring a beer and wine license to keep the taps flowing. Kettlehouse’s Northside location will be renamed the Northside Brewing Company and operate as-is under sole ownership of O’Leary’s wife, Suzy Rizza.

“The major difference is the brewery will be owned by me and the beer bar will be owned by Mom,” O’Leary wrote Jan. 18. “We don’t expect to change our serving hours or quantities drastically. In fact we may not even serve wine. That is an option that the proposed license allows but does not require. Our goal is to maintain the atmosphere at 602 Myrtle that our longtime customers have come to love.”

And since Myrtle Street Taphouse is a separately owned and operated company, Kettlehouse will be able to produce enough beer to satisfy increasing demand among wholesalers without upsetting local desire for neighborhood taprooms. O’Leary told the Indy last week that numerous other Montana breweries have already applied similar business models to comply with the state’s varied and restrictive microbrew laws.

Though it sounds like Tim’s plan will be granted forward momentum by the council, there will be an additional condition to the conditional use permit for the Kettlehouse: a 10pm curfew.

An amendment from Mike O’Herron, and supported by Caitlin Copple and Jason Wiener, failed tonight, which means the anti-business victory tonight goes to Alex Taft, Ed Childers, and Bob Jaffe, who opposed late hours (a BIG THANKS to @KeilaSzpaller for live tweeting City Council).

What makes this decision appear very selective and very unfair is the proximity of a fabulous dive called Flippers, where you can drink beer and cheap wine (generous pours) until 2am, and gamble till the sun comes up.

Did I mention Flippers is a block from the Kettlehouse?

In all fairness, if I lived in that neighborhood, I probably wouldn’t be really excited about the possibility of having more drunk people around until 2am either. NIMBYism is a powerful force, and often transcends ideology.

That said, I’m glad the Kettlehouse will no longer by constrained by a 10,000 barrel production cap, because the constraint is solely there to insulate the established alcohol cartel from competition.

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  1. The Tavern Association is now trying to find a Republican sponsor for a 60/40 annual production split instead of their initial 90/10 plan. This latter proposal would effectively close the tap rooms for six Montana breweries, including one in Missoula. Jobs, jobs, jobs!

    My understanding, however, is that they don’t have a sponsor yet for that bill but they do have a placeholder should they find one.

    Alternatively, I am carrying a license stacking bill that would allow small brewers to purchase an all beverage license (should they choose) and allow a tavern to purchase a brewer’s license (should they choose); create an even play field. If a brewer wants to extend their hours and/or sell more pints, then they can buy a license like a bar. (Taverns and breweries are currently prohibited from doing that… which is why the Kettlehouse’s new tavern has its new all beverage license in the name of O’Leary’s mom.)

    My “stacking bill” is supported by BOTH the Brewer’s Association and the Tavern Association, and co-sponsored by Speaker of House, Mark Blasdale (R- Kalispell).

  2. That last post was from me, Rep. Ellie Hill. Sorry that I didn’t make that more clear. Apparently, I have a Word Press account.

  3. lizard19

    thank you for the comment and for trying to pass sane legislation, Rep. Hill.

    I should mention that Keila’s article in the Missoulian today better explains why O’Leary opposes the 10pm curfew. it’s not because the Kettlehouse planned on staying open until 2am, but because of the potential reduction in value of the license itself:

    The Kettlehouse had no plans to stay open until 2 a.m., but O’Leary told the council the 10 p.m. shutdown reduces the resale value of his license and that of others that may be coming on the market.

    “We’ll consent to these restricted hours that are unfairly and shortsightedly imposed by this body,” O’Leary said. “The restriction will place this license holder at a competitive disadvantage with the other members of the tavern industry in Missoula, Mont.”

    unfair and short-sighted. yep.

  4. Buzz Feedback

    Taft’s NIMBYism stops right at the property line of the ADU he wants to put in his backyard. What a weasel.

  5. The MTA exists for the sole purpose of restraining trade. Although this is disappointing to it hardly unexpected. I’m a little bit more sympathetic to the restricted hours (some but not much) because “quite” is a public good so to speak. But if any politician thinks that there is a rational public interest in restricting brewers from selling beer to the public out of tap rooms I’d like to hear it. It belongs in the grand works of Politicians’ Greatest Hits of Obfuscating Bullshit to Protect Donors.

    • Steve W

      Dave, what is your group doing about the restraint of trade, beyond offering moral support here at 4&20? Can both beer consumers and non-consumers alike count on you to push back on the MTA and their political friends in the legislature, and how do you do that?

  1. 1 Montana’s Legislators Working Hard To Kill Jobs | 4&20 blackbirds

    [...] In his weekly column in today’s Missoulian, George Ochenski takes a look at how our legislators are trying to expand their anti-business attacks on local businesses by carrying out the will of the Montana Tavern Association, an issue I touched on in this post about the politics of beer. [...]

  2. 2 Boycotting Big Sky Brewing | 4&20 blackbirds

    [...] it. Lizard, though, I should point out, gave us the foreboding preview back in February with his The Politics of Beer post. HB616 has been put forth by Great Falls Rep. Roger Hagan at the request of the Montana Tavern [...]




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