SB 1224, the "High Alcohol Beer" bill - before and after

OK, so we have been getting a lot of emails, tweets, calls, etc, asking what we think about the new bill, waiting to be signed by the Governor into law, that will create a new ABC license to brew high-alcohol beers. Well, maybe the best thing to do is to compare the situation before and after the bill becomes law:

BEFORE:

1. Breweries could get a "distiller's license" to brew high-alc beers. Yes, they already could! For some reason, none of the reporting has mentioned that we have been brewing high-alc beer for a year now, which is how we are able to legally brew our "Sue", a 9% abv smoked imperial porter, which won a silver medal at the 2010 Great American Beer Festival.

2. Breweries could get a "liquor-by-the-drink" restaurant license to serve beer, high-alc beer, wine, and spirits. However, the ABC ruled that breweries could not sell growlers to-go of normal strength beer if they held a restaurant liquor license. That's why if you buy a growler at Blackstone's brewpub, you have to do the transaction in the brewery part of the building, which is not covered by their ABC restaurant license.

3. Manufacturers who hold a TN distiller's license could get an ABC retail liquor license to sell their products to-go. However, those products had to be sold in special 750 ml commemorative bottles only, not in their normal packaging.

4. Breweries that received local beer board approval for off-premise sales could sell their regular-strength beer to-go, in any size package they wanted. Growlers, cases of bottles, 1/6 bbls, 1/2 bbls, no problem. Heck, we'd sell you a 40 bbl tank of beer if you brought the tank back the next day.


AFTER

1. Instead of a "distiller's license", the legislature created a new definition of "high alcohol content beer" as beer between 5% and 20% abw. It also ratified any actions the ABC made in giving a manufacturer of high alc beer a license prior the effective date of the law (i.e. they covered the ABC for giving us a distiller's license before ). From what I hear, getting this license will be just about the same procedure for getting a distiller's license, which was $1000 per year and an annual inspection of the brewery.

2. The legislature authorized licensed high-alc brewers to offer free"tastings" during tours.

3. The legislature authorized the ABC to grant high-alc brewers a restaurant license to sell high-alc beers in their attached restaurants. As I noted above, this is not a change in law, breweries could already get a restaurant license to serve high-alc beer, wine, and spirits. With recent changes to the law to allow for limited-service restaurants (i.e. "bars"), allowing restaurants to serve as little as 15% of their revenues in food sales, this license could cost as high as $4000 per year, and as little as $1000 per year if the restaurant got 50% or more of its revenue from food sales.

4. OK, pay attention. Here is where it gets complicated. The legislature authorized the ABC to grant high-alc brewers a retail liquor license. Remember, if you had a distiller's license, you could already apply for a retail liquor license, but could only sell in 750 ml commemorative bottles.

If a high-alc brewer gets a retail liquor license, then the following applies:

a. as far as the state cares, the brewer can sell both high-alc and regular-strength beer at the
same location. But the local governing body (in Nashville, the beer board) can decide if THEY will allow both types of sales on the same premises, and what hours and days that can take place, if at all.

b. the brewer with a retail license could only sell a combined total of 5 gallons or 1/6 bbl to any individual per visit. That's including both regular-strength beer and high-alc beer.

c. for high-alc beer sales, there would be a 15% "inspection fee" paid to the local governing body, based on the wholesale prices of the high-alc beer. Most people would call that a tax, instead of an "inspection fee", but what the hey.


Ok, so you can see how much has changed. A TN brewer can now get a "high alcohol content beer" manufacturing license. Before, they could get a "distiller's license". I have not heard from any other TN brewer saying that they were denied or were having problems getting a distiller's license, so I can only assume that no other brewery tried in the past year.

Before, we could get a restaurant license to serve pints of high-alc, but would not have been able to sell ANY kegs or growlers to go, of either regular or high-alc beer, unless we set up a separate part of the building that was not covered by our liquor license. We decided for the time being that having a separate area with separate entrances, dispense systems, etc., wasn't feasible. Now, nothing on that front has changed (it was an ABC ruling that said you couldn't sell anything to go if you had a restaurant liquor license, and they have not changed their stance as of now). So if we got a license to allow us to serve pints of high-alc beer, we would not be able to sell growlers to-go, of anything - regular or high-alc.

Before, a manufacturer holding a distiller license could apply for a retail liquor license, but they could only sell in 750 ml commemorative bottles. To get a retail liquor license, the ABC requires the local county or metro government to give them a "certificate of compliance", which can be difficult in Davidson county. For instance, the store has to be on a "major thoroughfare", and the cash register has to be visible from the street. You can't make this stuff up.

Now, we could get a retail liquor license, if we could get the certificate of compliance from the city, and sell high-alc beers in whatever package we normally sell them in at wholesale. But we would be limited to 5 gallons per person or 1/6 bbl, combined of both beer and high-alc beer. And the high-alc beer would be subject to a 15% wholesale tax. We sell dozens of kegs every weekend, many of them the full 1/2 bbl size. So that is not an attractive option for us.

So if you have read this far, congratulations! Get yourself a cold Sue from the fridge, and stop duct-taping your head. It won't explode!


What does this mean for Yazoo? Maybe if we were focused on high-alc beers exclusively, it would make sense to jump through all the hoops to get a restaurant license or a retail license. For us, it probably won't mean any changes at all in the near future. We will go on making Sue, and hopefully another high-alc beer in the fall, if we can ever get caught up with sales of our regular lineup. We may apply for a restaurant license, but for a brewery that chooses to only open to the public for 14 hours a week, the $4000 license, plus increased liquor liability insurance, ABC cards for all of our staff, etc., may not be worth it.

I don't see us getting a retail liquor license anytime soon. If our friends at Corsair are still fighting to be able to open their liquor store side, after over a year in business at Marathon, I can only imagine how hard it would be for us to get the metro council to change Division St to a major thoroughfare. At least our cash register is visible from the street.

I'm probably going to get some comments, asking how I can't see the whole deal as a victory for TN brewers. But again, I don't know of any TN brewer that was denied the same license we got to start brewing high-alc a year ago. Getting the "pilot project" language thrown out of the bill WAS a victory for craft brewers in TN. All the folks who contacted their lawmakers changed the language of the bill for the better. However, I hope that, after reading through all of this, and comparing before and after, and after you unwind the duct tape from your head, you will agree with me. Not a whole lot has changed for TN craft brewers.

Cheers,

Linus

The new and exciting adventures of Yazoo Pale Ale

http://www.youtube.com/watch?v=K2bgnb4XDeA

Our new pressure sensitive labels finally arrived, so we can run the whole line together. 100+ cases an hour, no missed labels, hardly any low fills - this is so awesome! Plus the shelf life of our beers will be much better.

You can tell our new labels by the fact that the "bottled on" date is no longer notched, but is stamped on each bottle. It's a better label too - you can't hardly get it off the bottle.

Cheers,

Linus Hall
Yazoo Brewing

High gravity beer license bill

OK, we have been getting a lot of calls, emails, facebook postings, tweets, etc over the proposed amendment to SB1224. Here's the story of what is happening from our point of view.

We have been concentrating all week on getting our new bottling line up and running. The technician from Italy was here starting last Friday, and it's been 12-14 hour days since. So in the middle of all this, I got a call last Friday afternoon from a lawyer who helped us get our TN ABC distillery license last year. He told me that there is a certain nationally distributed brewery who was looking to set up another brewery location in either eastern TN, Virginia, or North Carolina. They want assurances from TN that, if they chose TN for their new brewery, they would be able to brew high-gravity beer, and to serve it at an on-site restaurant. So an amendment was added to an unrelated bill, that would create a new definition of "high alcohol content beer" and authorize the ABC to issue licenses to brew it. But then the state-wide definition was narrowed to only allow this particular brewery to qualify. Why, I don't know.

At the same time, the group who purchased the old Coors brewery in Memphis got wind of the amendment. We were going to join with them, to lobby for the bill to include all breweries in TN, but then found out they wanted to go it alone.

We don't have the resources to hire lobbyists. I started calling and emailing our senators. I talked to our distributor, asking them to try to contact the legislators and lobbyists crafting the bill. We have had ZERO input into the wording of this bill.

There are good parts and bad parts to this bill. The good: high alcohol beer manufacturers will be able to sample and sell high-alcs in the same facility where they are made. It would end the silly restrictions against selling growlers to go if you serve high-alcohol beer. It would allow the brewers to operate a restaurant and serve high-alc alongside regular strength beer, and still sell growlers to-go of both types of beer.

The bad: well, that's obvious. It only authorizes three brewers to be part of this "pilot project". We were only included at the last second because we already hold a distiller's license to brew high-alc beer, and the bill ratifies the ABC director's decision to grant us one last year.

I don't like that part of the bill, but I feel that after a year, the ABC director can report positively on the "pilot project" and the legislature can open the license to all brewers. I can't speak for all other TN brewers, but it has been a year since we got our distiller's license. I reported on this blog the details on how we went about getting it. I've talked to several TN brewers about the procedures, and gave them advice on how to go about getting one. We are only included in the bill as it is written, so that the legislature can ratify a decision the ABC had already made, i.e. granting Yazoo a distiller's license.

Again: we have had ZERO input on this bill. We are caught up in the drama of two relatively huge out-of-state brewers trying to influence TN law. Those of you who know me, know that I shoot straight from the hip.

Special Taproom only beer - 100% Brett IPA

So for the next in our special taproom only beers, now that Spring Puppy is almost out, is a very special one. We took about 10 bbls of hot Pale Ale wort, hopped it with lots of Amarillo, whirlpooled it again, and knocked it out into a fermenter waiting with a special Belgian wild yeast, Brettanomyces Drie. Brettanomyces is a wild cousin of normal Saccharomyces ceravisiae, brewers yeast, and is found growing wild on fruit skins in the lambic region of Belgium.

The resulting beer is pretty amazing. I've never tasted anything like it. We didn't filter the beer, just carbonated it and racked it into kegs. It's cloudy golden orange, with a frothy off-white head. The aroma is all fruit - pineapple, bubble-gum, some cinnamon. It's sharply hoppy with a slight acidic finish. Come on down and try it yourself. It's on tap all this weekend until it runs out!

First run!

First run on the new bottling line

http://www.youtube.com/watch?v=rMCFL7QosOc

Cheers,

Linus Hall
Yazoo Brewing

Thinking of starting your own brewery?

Vince Cottone at Sound Brewing Systems is a great resource. I check his website at least three times a week, except lately there hasn't been much used equipment out there. But he has some excellent advice on starting a brewery.

His latest advice is almost a rant! But it is full of great points. I get emails all the time from people thinking of starting "small" and testing the waters. You have to read his advice at www.soundbrew.com on his "Nano-brewery" page. Not to throw cold water on anyone's plans, but every word rings true.

www.soundbrew.com


Cheers!