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How Idaho’s Beer Distribution Scheme Works for Out-of-State Breweries

Added by Hawley Troxell in Articles & Publications, Wine, Brew, Spirits Law on July 17, 2013

There have been stories in the news lately about how challenging it can sometimes be for a brewery, especially an out-of-state one, to get its products to Idaho consumers. This is largely due to Idaho’s tiered beer distribution laws, a system dating back to just after Prohibition ended.

To start, a person or business in Idaho can get an Idaho brewery license, which, as you can probably guess, allows the holder to manufacture beer. That same person or business can also get a wholesale license, which allows the holder to sell beer to retailers. Allowing brewers to both make beer and also sell directly to retailers is great for Idaho’s growing craft beer industry—it allows Idaho small breweries to self-distribute their products directly to retailers like grocery stores and bars.

Out-of-state breweries, however, can only sell beer to someone with an Idaho wholesale license, and only indirectly through an out-of-state distributor. Retailers in Idaho must then buy the beer from the Idaho wholesaler. An out-of-state brewery must also have a certificate of approval from Alcohol Beverage Control Bureau of the Idaho State Police before its products can be sold in Idaho.

Out-of-state breweries also have to go through some extra steps to open a brewpub in Idaho. A brewpub is generally a bar or restaurant at which the brewery sells its own beer, by the drink, directly to consumers. Only Idaho microbreweries can get the retail license necessary to sell beer by the drink at a brewpub. An out-of-state brewery has to sell its beer to an out-of-state distributor, who must then sell to an Idaho wholesaler. Then the brewery can buy its own beer back from the Idaho wholesaler to sell by the drink at its brewpub.

For help understanding Idaho’s beer regulations or with growing your beer business, please contact our Wine, Brew, Spirits Group at 208.344.6000.