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CT's 80-Plus Local Breweries Want More Flexibility to Sell Beer

CT's 80-Plus Local Breweries Want More Flexibility to Sell Beer

Connecticut Magazine, January 17, 2019

By Ned Gerard

Precious Putnam, co-owner of Beer’d Brewing Co. in Stonington, regularly has to do something no small business owner wants to: turn away business.

That’s because, under current state law, breweries can only sell up to 9 liters a day to an individual customer for off-premises drinking. That translates to 24 12-ounce cans, or 19 16-ounce cans.

Despite a booming craft beer industry — by the latest count, Connecticut has more than 80 breweries with many more on the way — the state is only one of 13 in the country that places limits on the beer that breweries can sell for take-home use, according to the Connecticut Brewers Guild. Among states with limits, Connecticut is the fourth strictest in the nation. Only Rhode Island, Alabama and South Carolina have even greater restrictions on beer purchases at breweries.

Putnam says the current limits are “like going to a farmers market and being told I can only buy 10 eggs. That I need to go to a supermarket [to] buy a dozen.”

In the current legislative session, which extends to early June, the Connecticut Brewers Guild and individual brewery owners will lobby for legislation eliminating or loosening this restriction. And brewery owners will not be the only alcohol producers active in Hartford this year. Winery and distillery owners would also like to see a loosening of laws surrounding their products.

Unlike breweries, wineries do not have limits on the amount of wine they can sell. But wineries cannot sell beer in addition to their wine, while brewers can sell wine in their taprooms. In addition, wine cannot be sold in grocery stores in Connecticut, while beer and malt beverages can.

Jonathan Edwards, owner of Jonathan Edwards Winery in Stonington and president of the Connecticut Vineyard and Winery Association, says, “Many wineries would like to see the ability to sell Connecticut craft beer in our tasting rooms.” Another goal is to permit wine to be sold in grocery stores with a portion of shelf space reserved for Connecticut wine. “The way we see it is consumers are being conditioned toward beer and malt beverages and away from wine, just because that’s what’s available.”

As for distilleries, currently they cannot sell drinks to customers for on-site consumption. However, they can charge for a tour and then provide a complimentary drink, but each visitor may only consume 2 ounces of a distilled product. Tom Dubay, owner of Hartford Flavor Co., and president of the Connecticut Spirits Trail, says distilleries would like to have the option of running distillery tasting rooms as bars and restaurants. These would operate similarly to how brewpubs currently operate.

They would have food and full cocktails, allowing guests to enjoy a distillery’s products as part of their favorite mixed drink. This would help distilleries make more money from their tasting rooms, and be on a more level playing field with wineries and breweries, Dubay says. He adds that he would also like to see distilleries — which frequently use Connecticut agricultural products in their spirits — be able to sell their products at farmers markets. Right now distilleries can promote their products at farmers markets but are unable to sell bottles. “We’re really looking for a baseline of changes, where we can operate in such a way where we can sustain and thrive within the state and add to jobs,” Dubay says.

Craft beer backed back to top

On the campaign trail in October, Ned Lamont came out strongly in favor of the state’s alcohol industries, particularly beer. A press release outlining the new governor’s position promised to “reduce Connecticut’s excise tax on craft breweries by more than half, from $7.20 to $3.30 per barrel,” and “lift the arbitrary 9-liter limit on retail sales so consumers can responsibly enjoy local beer and cider, while also allowing breweries to profit without having to distribute their products through a middleman.” Finally, he vowed to “oppose new and needless restrictions on craft breweries, wineries, and distilleries.” When reached for this story, a spokesperson for the governor says his stance remains unchanged.

Even with the governor’s support, alcohol producers expect a tough legislative battle. Pushes for similar changes last year met with fierce resistance. Liquor store owners opposed the expansion of wine sales into grocery stores, as that could potentially cut into their own wine sales. Beer distributors opposed the elimination of limits at breweries, arguing it would hurt the current three-tier system — manufacturers, wholesalers, retailers — and give breweries unfair control of the market.

Jude Malone, executive director of the Connecticut Beer Wholesalers Association, says wholesalers have long supported breweries in the state. But she thinks the no-limits effort goes too far. “Every year they come back and want more and more and more,” she says. “They’re the distributor, the retailer, the wholesaler, they’re everything. They control every chain of the operation.”

Brewers counter that concerns about a brewery monopoly are unfounded and have not occurred in other states without limits, including neighboring states like New York and Massachusetts.

“We’re controlling our own product; we’re not controlling the entire industry,” says John Kraszewski, owner of Armada Brewing in East Haven. “Out of all the beer sold in the entire state, if every single brewery in this state as of 2017 was to sell every single drop out the door, that’s less than 3 percent of beer sales in the entire state. … So, we’re not going to be running over the entire industry because of this.”

Barry Labendz, co-owner of Kent Falls Brewing Co., says that in Connecticut the balance of power actually sits with distributors. “Connecticut is a state with franchise law, which means if a brewery signs with a distributor they give up the rights to sell their beer in a given territory in perpetuity,” he says. “If we signed with a distributor, we are at their whim. They can tell us what to produce, how to package it, etc., and if we do not comply, they don’t have to purchase it. To switch distributors we would have to purchase our rights back, have another company buy the rights, or take a distributor to court.”

He adds, “The distributors making claims that they fear a monopoly will take place is like Amazon complaining physical retailers have too much of an advantage because they can offer customers a cup of coffee if they walk into their location.”