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Thursday, August 23, 2018

Craft Beer's Illinois Problem

In its infancy, craft beer was a virtual blip. A nothing. Without passage of the Brewpub Bill in 1985, Oregon's craft beer industry would have certainly remained small and insignificant. It simply could not have flourished in a scenario where breweries could not sell directly to customers.

One of the reasons the Brewpub Bill passed is that beer distributors and retailers, who weren't interested in craft beer at the time, decided to not oppose it. They figured it wouldn't hurt to let these cowboys chase their dreams and that craft beer might someday make them money. Little did they know.

The ability to sell directly to customers was crucial to the industry establishing a strong identity here. It led to the emergence of taprooms and pubs where a brewery's beer could be featured. That formula, more or less, has been used to boost the fortunes of craft beer across the country.

Fast forward to last week, when Illinois Gov. Bruce Rauner signed a bill allowing licensed breweries producing up to 120,000 barrels of beer annually to purchase beer or cider from wholesalers or other breweries to sell in their taprooms. Great news, right?

The signing drew quick criticism from several restaurant and bar owners in Chicago. They view the law as a blurring of the lines between taprooms and bars. The effect of the law, they say, is that the only difference between taprooms and bars will be a bar's ability to sell wine and liquor. They aren't pleased.

“Taprooms are going from a place to grab a pint after a tour to enticing a customer to spend the whole evening there,” one owner told Brewbound. “To me, that’s why we have brewpub licenses. If you want to be a full service, one-stop shop to the consumer, then you should be subject to the same laws and zoning rules as the rest of us.”

Owners essentially object to the different zoning rules that breweries, which are considered manufacturing outlets, are subject to. As well, beer brewed on site carries a much higher profit margin than anything bars and restaurants sell. Remember, bars and restaurants buy almost everything they sell through distributors at a much higher price point. It's the law.

“We don’t think it’s cool that breweries with taprooms act as bars,” an owner told Brewbound.

From the craft beer side, I've seen several condescending comments in various places. The consensus seems to be that adding guest beers and ciders to taproom lists is fine and something that needs to happen due to the overwhelming popularity and girth of craft beer.

Part of the argument is that brewpubs and taprooms typically want to sell their own beer first and guest beer or cider second. True enough. One brewery owner told Brewbound that the new law was necessary so he could bring in and sell collaboration beers brewed at other breweries.

That's all well and good. But it seems to me that the bar owners have a legitimate beef. We seem to have lost sight of why taprooms and brewpubs were set up in the first place, which was to allow brewers to display and sell their own products directly to consumers.

If the original taproom/brewpub concept had included the right to sell a variety of beers to consumers like a bar or tavern does, the restaurant and bar industry may well have opposed changes in the law and derailed legislation everywhere. That didn't happen.

Now that craft beer has attained star status, it has the power to push for changes that may put other businesses at a disadvantage. The situation in Illinois is one example of that. It's really not okay. No one likes a bully, especially one that ought to know better.

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