Boycotting Big Sky Brewing

by jhwygirl

Major rumbling began maybe 2 weeks ago – a bill designed to kill Montana craft breweries as we know 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 Association.

The fiscal note has a pretty plain language summary of the bill. It does significantly change the licensing fee for breweries and it changes production limits such that virtually all current “small breweries” would then be reclassified with higher licensing costs, jumping from $200 to $100,000.

The hearing was held today in House Business & Labor. The room was packed, with proponents of the bill largely being bar and tavern owners. One proponent of this bill stood out – Big Sky Brewing located right here in Missoula.

Outcry began immediately – as is the way things go on twitter – and a petition was started calling for a boycott of Big Sky Brewing.

It’s a huge shame that Big Sky Brewing is siding with the loathsome Montana Tavern Association. Instead of positioning themselves to enhance and promote craft brewing here in Montana, they’re only concern is their own competition.

Beer is one industry where it is possible to grow, purchase and produce the finished product, maximizing economic output here in Montana – and creating a string of Montana jobs. The economic benefit of 100% value-added production is significant and something the Montana legislature should be encouraging.

This legislature can’t see fit to suspend the gas and oil tax holiday for the oil and gas corporations, yet they’ll hit up small craft brewers – some that are actually the conduits of economic development for small towns all over the state – for $100,000 licensing fees.

Ridiculous. Next time they talk about how unfriendly Montana is to business, they better look in the mirror at this one. A purely Montana industry and they’re doing the best they can to impede its growth.

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  1. Holy ship! How did I miss this?! It’s a clear business tactic that has no ground for legislative action. I remember a time when our business community competed healthily through their product quality, service, reputation and delivery. Nowadays we’re reduced to cutthroat licensing fees and wasting our valuable legislative attention to cut down grass-roots businesses? I would be ashamed.

    That said, I think we should put together an event to SUPPORT our local brewers. Maybe a fuck-the-tavern-association-and-big-sky-brewing taproom crawl?

    xoxo
    Ray

  2. NamelessRange

    Great post. I had no idea. Seriously, how can they defend such Machiavellian Bullshit? Montanans, and especially Missoulians best not forget this. I am done with Big Sky Brewing. And anyway, Double Haul has been Missoula’s best I.P.A. for years now.

  3. I’m not shocked it is a Republican trying to do this

  4. Montana republicans are ridiculous! People need to wake up and stop electing these morons to office. I believe there was another group of businesses picked on by the 2011 legislature and those businesses were basically forced to shut down. What businesses will be forced to shut down or taxed out of exsistence next? Get a grip Montana, during the next election, remember to get rid of these jerks and elect officials who really will represent the people, if you can find them.

  5. Big Swede

    Thanks for the heads up. I was going to be in Mizzo this weekend. One place I won’t go to.

  6. lizard19

    wow, this post is getting a ton of views. I think Big Sky Brewing has made an enormous miscalculation about craft brew culture—you know, where they came from not that long ago.

    it’s really too bad. I have great memories of biking from our house in the slant street neighborhood to Big Sky’s taproom when it was on Hickory street to get my growler of barley wine.

    I’m curious what kind of dealing behind the scenes would even lead Big Sky to consider siding with the anti-business tactics of the MTA?

  7. wolfpack

    How exactly would buying a license that allows brewpubs to stay open longer, sell more product and follow the same zoning laws as other bars crush anyone? The law would have opened brewing up to all bars if the had the talent for it. The real story hear is that most of the breweries were for it but some were threatened with a smear campaign and others were threatened by beer distributors who control who gets into grocery stores. Distributors can only lose from more microbrewing tap rooms. Breweries don’t even have to worry about a license until they reach 300 barrels through the tap room when the 40/60 split kicks in. BTW 300 barrels is 600 kegs or 74,400 pints or $297,600 cash. That’s not exactly chump change. The $100K license was a cap and only applied in markets were they were selling for more than $100k. Many would pay $0 for a license because that’s all a license is worth where they setup.

    • It seems very odd to me that if most of the breweries really did support this bill, they chose not to do so publicly — because of threats from the distributors, who you point out are threatened by more tap rooms.

      Overall, I think the problem so many people have with this is (as eebee pointed out): our republican-controlled state government is developing a nasty habit of destroying local businesses for no good reason. While transparently pandering to the interests of a very small minority of heavily vested interests. The problem is systemic and has run rampant for years; but, now that our beloved local brewers are being threatened it ought to get interesting…

  8. wolfpack

    J Michels, Again you start from the premise that the bill would destroy microbreweries. What exactly would cause that? The amount being talked about for buying a license ranges from zero to $100K but allows a doubling of serving hours. These non gaming beer licenses currently sell for more than $100k in the big cities so a purchasing brewery instantly makes money from the purchase. Any business guy would see this makes it easier to get a microbrewery up and going. The quota system is just a way to keep drinking only establishments from popping up on every corner. Almost every state has some way of doing this, Montana just happens to have a free market system like cap and trade for carbon. There are special licenses for restaurants and there are licenses with no gaming attached. These new license types have been added recently and expanded over the last few sessions to address the concerns above.

    Boycotting Big Sky for being rational and not being bullied by others in the industry doesn’t sense. Talked to one on one, almost all the breweries liked the bill but were just too chicken to face some of the propaganda machine which has made it’s mark here. It’s easy to buy into it until you actually try to figure out how a brewery would be hurt.

    • RMB

      It’s obvious to me, but maybe not everyone… Small breweries that sell their product only through their taproom and not through distributors are immediately hurt.
      Startups that need a business model that allows them to succeed, profit, and grow for a few years are immediately hurt.

      • wolfpack

        Under HB616, small breweries are allowed to sell 600 kegs annually before they are required to buy a license or sell wholesale. 600 kegs is a lot of beer for a bar that closes at 8pm so it could easily be said that the startup was successful before they would have to step up to the next level. The point could also be made that starting up with the more robust rights a license would provide would make success more likely (i.e. staying open past 8pm).

        • RMB

          First off I’ll just say being “successful” and what constitutes “a lot of beer” are impossible to define without a lot more context around the market and location of a brewery. But if anything I’ll say this bill clearly introduces barriers to growth for small breweries.

          For example, let’s say in year 1 a small brewery claims “success” and is just barely able to break the 300 barrel sales limit through their taproom. Assuming the market for that beer stays the same, year 2 now imposes a restriction that only 120 barrels (40% of 300) can be sold through the taproom. The brewery clearly still wants/needs to sell those 300 barrels through their taproom otherwise they are just ignoring the market and losing the revenues that made them successful in year 1.

          But now to make that work the brewery has to more than double their total production to 750 barrels to be able to sell 300 barrels (40% of 750) through the taproom. And on top of that they must move 60% of additional product through distributors and/or taverns. So by being successful they are forced to more than double production and find additional markets for 60% of the beer they make…in a very short period for the life of their business. For a new, small business those are not challenges to be taken lightly. As entrepreneurs or investors I think we can see this as a major barrier to growing small breweries in MT.

  9. Reblogged this on the Montana Maven and commented:
    More on the politics of beer in Montana. Politics and beer have been joined together since the beginning of our country. Remember the Whiskey Rebellion? There’s a good book on the history of the saloon period from 1870-1920 called “Faces Along the Bar” by Madelon Powers. People who say they loves their freedoms turn around and like to control other people’s ability to brew their own brew. They also seek to control people’s leisure time. It’s an old story.

  10. Good discussion over at Growler Fills: http://growlerfills.blogspot.com/2013/03/text-of-montana-tavern-association-bill.html
    So where did all this regulation using a quota system start? Is it part of the lingering prohibition movement i.e. limiting the number of bars? Should we limit the number of banks? Groceries stores? Wal-Marts? I get regulating a bar so it doesn’t sell tainted beer, but why a quota system? That does seem in little big gulp nanny state. And what’s with the no singing in a tap room? Sounds glum.

  11. The unfortunate thing in all of this is that no one seems to be arguing the “compelling state interest” of licensing at all. Wolfpack seems to think that it’s to limit bars from being opened anywhere. But that surely could be managed at the municipal, rather than the state, level through zoning. It’s no surprise that the Montana Tavern Owners want to create barriers to entry since many of them paid an artificial premium due to the market disequilibrium. But having a license that has a market value of $100,000 that sells from the state for $75 says more about the mismanagement of licenses than it does about the need to control. This is just another example of a government created problem.

    • Big Swede

      They ‘re coming for the cheese makers next Dave.

      • JC

        Blessed are the cheesemakers:

        “What’s so special about the cheesemakers?”

  1. 1 Big Sky Brewing faces second public relations battle in three months | BeerPulse

    [...] This post calling for a boycott went viral on Reddit’s Beer board on Wednesday and a live petition on Change.org contains approximately 250 signatures from those supporting a boycott of Big Sky. [...]




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