Craft Brewers Face Regulatory Challenges

As the annual Craft Beer Conference converged this year in Washington, DC, changing regulations are both helping and hampering the growing industry.

This week I attended the annual Craft Brewers Conference. This year’s conference, held in Washington, DC, occupied much of the District's Convention Center, a massive space that reflects the continued growth of the craft beer movement in America.

In addition to sampling many excellent beers from around the country over several days, I sat in on a few educational sessions and spoke with several well-known brewers from around the country to gauge the state of the industry.

While demand for craft beer is growing across the country, it appears many small brewers are also bumping up against outdated federal and state regulations.

State laws regulating breweries vary greatly. The trend, as I’ve noted previously, appears largely—though not universally—to be toward deregulation.

I spoke with Garrett Marrero, founder of Maui Brewing Company in Hawaii, the largest craft brewer in the state.

Demand for craft beer has helped Maui Brewing and other brewers in the state push to expand limits on production six-fold over the past few years—from 5,000 barrels to the current 30,000-barrel limit.

“It’s nice when there are issues where you can be aligned with your competition, and I think that was an obvious one,” says Marrero.

Federal regulations also vary. They’re in flux in large part because of the explosion of beer choices over the past couple decades.

“You reach a tipping point,” Daniel Kopman, co-founder of Schlafly Brewery in St. Louis, tells me. “The consumer’s demanding more variety.”

“Before, you had Anheuser-Busch and you had Miller and Coors, separately,” says Kopman, “and maybe a few years ago you had a few other players that all operated under the same basic playbook. And the rules were very well written and they had significant control over the flow of beer essentially from the brewery—and the raw materials behind it, and all of the packaging materials, and everything that went into the supply side. They had control of the process all the way through to the consumer. And essentially the consumer was in step with them.”

“So now, all of a sudden,” Kopman says, “the consumer steps to the side—and another side and another side. It’s now moved such that [large brewers] can no longer control everything that’s going on. And so that also puts pressure on the regulatory framework, because the regulatory framework was built along the previous paradigm of a few… major brewers.”

Craft brewers expressed a variety of regulatory concerns at the federal level.

I spoke with Bill Sysak, Craft Beer Ambassador for Stone Brewing Company in Escondido, California, who’s known as “Dr. Bill” in the craft beer community.

Sysak tells me that two of the main concerns of those who took part in a craft beer lobbying day on Capitol Hill that coincided with this year’s Craft Beer Conference were barrel taxation and threats that regulations meant to crack down on so-called “alcopops” might unintentionally ensnare craft beer producers.

Perhaps the most interesting part of the conference I witnessed took part during a question-and-answer session that followed a talk by Art DeCelle, an attorney with the firm of McDermott Will & Emery who previously served as general counsel with the Beer Institute, an industry lobby group.

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  • ||

    And not get their grimy regulatory paws all over that sweet sweet lucre?

  • Fist of Etiquette||

    You have a consumer wanting to purchase goods, you have a business willing to meet that need, so obviously the only thing missing is some ignorant asshole from the federal government to stumble into the middle of that.

    What a deathtrap America would be if federal regulations were voluntary. People could go shopping only for those things with the fed stamp of approval if they so desired, while others could throw caution to the wind and buy raw milk or beer made from unrefrigerated grain.

  • Fatty Bolger||

    Absolutely. If people are doing it, they need the government to tell them how. Otherwise, how can they be free to make the right choices?

  • juris imprudent||

    You are only free to choose things that have been appropriately vetted by TOP.MEN. It is thought-crime to even consider anything else.

  • Johnimo||

    Only the selfish chose to think for themselves. It's much safer to think what your told to by an authoritative group. Don't try to comment on this comment. That would be too dangerous.

  • Rights-Minimalist Autocrat||

    If only there were some example...some existing template showing how voluntary regulatory compliance would work. But I can't even conceive of how such a plan could be implemented. It's obviously impossible!

    /sarcasm

  • DJF||

    """Another brewer described FDA inspectors who have visited his brewery as "clueless." Yet another pointed to the growing problem in the industry of "the FDA not really knowing our practices."""'

    The purpose of government inspectors is to make sure that paperwork has all the boxes filled in, whether or not the paperwork or the inspector is clueless is not considered to be important.

  • jester||

    I'm in Japan right now and even here microbrew is threatening. Not so much as in the US but Hitachino Nest, Yoho Brewing, etc. are challenging the oligarchy (Yebisu,Sapporo,Asahi,Suntory,Kirin.)Okay. I was just joking.But nevertheless, I enjoy immensely the beers of Hitachino Nest.

  • ||

    Japanese mainstream beers are somehow even worse than ours.

    Also, if anyone is looking for a great beer review site, this is the best on teh internetz: http://dontdrinkbeer.com/

  • The Rogue Economist||

    So true. Japanese and Korean mass market brews are pretty dire stuff, and I'm told Chinese ones are even worse. But Hitachino Nest is excellent, even if occasionally quirky (in reasonably traditional Japanese ways).

  • Rights-Minimalist Autocrat||

    Chinese beer is awful, with the exception of the 11 degree Plato Qingdao.

    Yes, China regularly marks its beers in degrees Plato, and 7-8 is the most common. Just foul stuff.

  • ||

    7-8 is pretty low. Must taste like piss.

  • Radioactive||

    that's actually a serious insult to piss...unless you've had some it's hard to describe how bad it actually is, and to think that the germans actually taught them how to brew beer...

  • The Late P Brooks||

    If you don't support more gun safety laws, you are a murderous poopyhead.

    To live in a modern society is to accept moral complicity in many kinds of violence. We pay taxes, and drones kill distant kids; we pay for roads, and thousands are killed in cars; we assent to the murder of farm animals that, we can be confident, feel pain and fear. We justify these moral choices, and our complicity in them, either by reference to a greater good—killing terrorists is so essential that the collateral damage is morally acceptable—or, just as often, by pretending they aren’t happening. All we can do is try to be clear about the kind of violence with which we are complicit.

    So to say that people who know the consequences and still do everything they can to ensure that gun laws don’t change are complicit in the murder of children is to state, as unemotionally as possible, an inarguable fact. They have made a moral choice that the deaths of those children, and the deaths of those who will certainly die next, is justified by some other larger good: in this case, apparently, the sense of personal power that possessing guns provides. That’s a moral choice, clearly made. But we shouldn’t pretend for a minute that they—or we—are making any other.

  • Sevo||

    Lying, self-righteous twit; lefty by any chance?

  • ||

    We pay taxes, and drones kill distant kids; we pay for roads, and thousands are killed in cars

    So if 2nd amendment advocates are complicit in the murder of children, aren't people who refuse to dodge taxes just complicit in even more deaths?

    So I take it Mr. Gopnik is advocating that we stop paying taxes in addition to accepting gun control?

    What is it called when one uses a logical argument inconsistently?

  • Contrarian P||

    "What is it called when one uses a logical argument inconsistently?"

    Tony?

  • Entropy Void||

    L I B T A R D

  • Contrarian P||

    That article made my head hurt when I read it. By the way, the study cited in the Journal of the American Medical Association was not well done, in my opinion. Despite the repeated emotional appeals on this issue, I'm hopeful that the country will continue to not believe the lie that gun laws are a bag of magic beans that will take us to a place where no more children die.

  • General Butt Naked||

    From the comments:

    I appreciate your continuing to write on this subject Mr. Gopnik. I have one question about strategy. Do you think it's possible for the White House to stage a press conference as a shooting range or some military training ground where these killing machines can be demonstrated for what they are? I think this debate has to pass beyond words and images. People have to see exactly what these things can do.

    These people really do have a pathological fear of firearms, and they think that's the normal way of things.

    "If we just show the people how deadly these things are, they'll all call for regulation!"

  • Virginian||

    Someone should link her to hickock45's YouTube channel.

  • General Butt Naked||

    These people live in a goddamned bubble, they think because everyone in their social circle are pearl clutching weenies then everybody else must be the same.

  • General Butt Naked||

    From the study from the article:

    3-4. Gun ownership creates external psychic costs.

    We analyzed whether perceptions of safety might be affected if more people in a community acquired firearms, using data from a national random-digit-dial survey of adults conducted under the auspices of HICRC. By a margin of more than 3 to 1, Americans would feel less safe, not safer, as others in their community acquire guns. Among women, but not among men, those who have been threatened with a gun are particularly likely to feel less safe.

    Gun ownership causes pearls to be clutched, therefore it is bad.

  • juris imprudent||

    Psychic costs? Someone really had the chutzpah to say that in an allegedly scientific paper?

    They should've asked if the people would feel safer with the police disarmed.

    Then they could've measured the cognitive dissonance.

  • Virginian||

    Science isn't really science anymore, it's just one more tool to use to advance the total State. Psychic costs are now science, because it helps the State.

  • Libertarius||

    I'm glad someone on here agrees with me as to the sorry state of science, particularly the philosophy of science. You should've seen the flaming I got when I pointed out that theoretical physics has merged with zen buddhism. As for the social sciences, fuhgeddaboutit; they are outright hacks who get away with posing their rationalistic gibberish as science merely because they have the rotted laurels (and the misplaced confidence) of an ivory tower to rest on.

    Ayn Rand was talking about the creeping mysticism in science fifty years ago, and this is just one more instance where reality is on her side.

  • Sevo||

    ..."a bright and hoppy future."
    http://instantrimshot.com/

  • Generic Stranger||

    Hops take a marginally undrinkable product and make it completely undrinkable.

  • ||

    That's the gayest thing I've heard since gay came to Gaytown.

  • The Late P Brooks||

    Actually, it’s hard to find a more robust correlation in the social sciences than the one between gun laws and gun violence. The cry comes back: “But those are just correlations. They don’t prove causes!” And, indeed, the most recent damning study, published in that cranky, left-wing rag the Journal of the American Medical Association—which shows a clear correlation, state to state, between strong gun laws and less gun violence—ends with the orthodox injunction that the study could not alone determine cause-and-effect relationships, and that further studies are needed.

    "a clear correlation, state to state, between strong gun laws and less gun violence"

    I wonder where Illinois fits into that distribution.

  • Virginian||

    Yeah how the fuck do they get that? Leave out the cities? Because DC alone proves my case. Arlington VA has like 80 times less murders then DC. So either the Potomac functions like the Wall of Westeros (tomorrow night people!) or there is some other factor at work.

  • C. S. P. Schofield||

    "it’s hard to find a more robust correlation in the social sciences than the one between gun laws and gun violence"

    That is the most damming condemnation of the Social Sciences that I have read in many a long year!

  • The Late P Brooks||

    lefty by any chance?

    It's the New Yorker. There's no mystery here.

  • The Late P Brooks||

    This whole thing about the poor, dead children boils down to a subset of the population with the emotional development of thirteen year old girls. They cannot bear to be subjected to the idea of the world as a messy and complicated and dangerous place which cannot be controlled, no matter how hard they try.

  • The Late P Brooks||

    The correlation between gun possession and gun violence—or, alternately, between gun control and stopping gun violence—is one of the most robust that you can find. And the mechanism that connects weak gun laws to gun murders and massacres is self-evident: with guns around, ordinary arguments escalate into ones where someone gets killed, and crazy kids who dream of getting even with the world can easily find a gun—or, like Adam Lanza, many guns—to do it with.

    If there were no guns, there would be no gun violence, you depraved troglodytes!

  • ||

    If there were no guns, there would be no gun violence

    You monster! Then I'd have to shiv people with a screw driver instead of shoot them. It's soooooo inconvenient (and increases the likelihood of splattering viscera on my coat tails).

  • Virginian||

    My response to this is always the same:

    "Let's assume for a second that you're right. That all the guns can be taken and destroyed, and all the knowledge and factories and shops to produce them can likewise be destroyed. OK, so now the world is back to the 1400s level of firearms. When the world was run by large men with sharp swords, and whoever had the most large men with sharp swords got to tell everyone else what to do. That sound good to you?"

    The rifle is liberty. People love to talk about the printing press, or religious freedom, or sexual liberation. These are all good things, and important aspects of liberty. But without rifles, held by the people, those things are fleeting and transient.

  • Generic Stranger||

    1100s. There were apparently hand cannons in China by the 1200s.

    As to your second point, there was a really good essay written on that several years ago called Why the gun is civilization. I like to point lefties to it and watch their heads explode.

  • Radioactive||

    is it required that they read this in order to make their heads explode? wouldn't a .45 round to the back of their skull have the same effect? not that I'm advocating gun violence or anything like that, just an intellectual inquiry...you know, just thinking out loud...

  • The Late P Brooks||

    Speaking of correlation and causation...

    Oklahoma's largest recorded earthquake may have been the result of injection wells used for disposing wastewater from oil extraction, according to a new study by researchers at the University of Oklahoma, Columbia University and the US Geological Survey. Their findings challenge the state's own geological survey, which concluded the 5.7 magnitude earthquake was likely "the result of natural causes."

    It's the latest back-and-forth in a decades-long debate over the connection between fossil fuel recovery and seismic activity. To what extent does oil and gas production shift the ground beneath us? When does the risk of seismic activity outweigh the benefit of increased energy resources?

    The 2011 event in Oklahoma is the largest earthquake linked to wastewater injection, according to the study, published Tuesday in the journal Geology.

    If you support drilling, you want little old ladies' houses to fall down!

  • ||

    Written by the same guy who did this "reporting:" http://www.csmonitor.com/Envir.....ave-energy

  • Virginian||

    One of the more perplexing things about environmentalists is their continued insistence that human beings are capable of causing natural disasters.

    It's quite funny.

  • juris imprudent||

    For the lefty-secular-environmentalist, man is God.

  • Libertarius||

    No he's not. They think man is a hopeless misfit begging for someone to live his life for him. For the lefties, nature is god, and not because they love nature, but because they hate existence, human life and happiness.

    I've written it many times on here before, and I've been flamed because many on here are suffering from the same disease that drives the left: hatred of existence, hatred of the good for being the good, nihilism.

  • T. Monocle Underbitington||

    I've experienced some of this craft brew legislation first hand. In launching a "Brew On Premises" business in KC (similar to what the brewing "gypsies" seek, we provide professional grade, higher capacity equipment and supplies for home brewers to use on a per-batch basis), we first looked to locate on the Missouri side, due to Kansas' well-known heinous liquor laws.

    As it turns out, since Missouri couldn't place our new business into one of its pre-defined business categories--we aren't a brewery, a manufacturer, etc.--they weren't interested in blessing us with a second look, let alone a license to operate.

    Ultimately, Kansas' lust for new business overcame its fear of icky booze and has pretty much bent over backwards to help us launch (for now...we haven't been visited by inspectors yet).

    Brew-On-Premises are relatively common in Canada, but is a newer business model in the US of A. Anyone have any experience? If you're a home brewer, would you consider doing so out of your home in a cool environment on pro gear?

  • The Rogue Economist||

    Honestly, if I were in that part of the country, I'd give it a look. Not an especially experienced brewer yet, but I'm getting there, and I'm aware that one of my primary barriers to getting to the level where I think my talents and creativity can take me is the cost of acquiring said professional equipment.

    So yes, I think that is a pretty cool concept.

  • ||

    We would pay for all supplies and rent equipment to boil, ferment, bottle, etc.?

  • in4mation||

    My first hand experience with federal regulators is that they are the least knowledgeable people at the table.

  • The Late P Brooks||

    Do you think it's possible for the White House to stage a press conference as a shooting range or some military training ground where these killing machines can be demonstrated for what they are?

    "Is that damn schoolbus here, yet? Oh good, there they are. Lissen- you kids go downrange- I mean, over there- and line up, because we're going to play a game. Run along, now."

  • Sevo||

    The Late P Brooks| 3.30.13 @ 12:04PM |#
    "Do you think it's possible for the White House to stage a press conference as a shooting range or some military training ground where these killing machines can be demonstrated for what they are?"

    Are these people familiar with the term "pandering"?

  • General Butt Naked||

    "America... uhhh, ummm, errr... There are those that put a car in a ditch, and... uhhh, ummmmmmmmm... We were shocked by the... uhhhhhh... tragedy. Look at 'em run,Joe... ummmm... Quick, dip your shirt in the blood... errrr...."

  • ΘJΘʃ de águila||

    "err, err, yes the Children....I'm sorry, the President must leave now, he must return to the White House War Room to review his Kill List to select the next African children to be assassinated......Uh, err....."

  • William Kostric||

  • mariyana||

    Tyler. I see what you mean... Debra`s stori is terrific, last tuesday I bought a great new Ariel Atom after bringing in $9550 this last month and-just over, 10k this past munth. with-out any doubt it's the most comfortable job I've ever had. I actually started nine months/ago and almost straight away began to make more than $81, per-hour. I went to this site,, and go to home tab for more detail--- http://goo.gl/XjdQI

  • John Galt||

    Start messing with my beers and it'll be war.

  • Radioactive||

    ATF...should be a convenience store not a government agency

  • Alton543||

    up to I saw the bank draft four $8939, I accept that...my... friends brother woz realie making money parttime online.. there aunts neighbour haz done this less than fifteen months and just repaid the morgage on there cottage and bourt themselves a Land Rover Range Rover. go to, http://www.wow92.com

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