Insight Idaho Statesman features article “Why Idaho should ease retail limits on breweries”

For decades after Prohibition ended, Idaho had no indigenous commercial breweries. When pioneering brewers began to resuscitate the craft beer industry in the mid-1980s, they needed help entering a market dominated by large, economically powerful competitors.

Idaho, like many states at the time, forbade its breweries either from distributing their products themselves to retailers or from selling directly to consumers. This scheme forced small breweries to find wholesalers willing to distribute their products to bars, stores and restaurants. If a brewery was just starting out, it likely did not sell enough volume to coax a distributor into carrying its brand.

Fortunately, in 1987, the Legislature changed the rules. Now Idaho breweries producing less than 30,000 barrels per year can sell to consumers at a brewery taproom and up to one remote brew pub location. The new policy proved wise. Since 1985, Idaho’s brewery industry has exploded, thanks in part to the fact that startup operations can introduce the public to their beer right where they make it. Some businesses, such as Crooked Fence Brewing in Garden City and Sockeye Brewing in Boise, have opened second brew pubs where they sell their own products as well.

Now that craft beer is taking off, some producers may be able to exceed 30,000 barrels per year in production. Payette Brewing in Boise is considering a new brewery space with as much as 100,000 barrels per year in capacity. Laughing Dog Brewing in Ponderay is also rumored to be expanding capacity beyond 30,000 barrels per year. As the industry matures and shakes out, others will undoubtedly bump up against the barrelage ceiling as well.

Because of the ceiling, breweries that produce and sell too much beer may become victims of their own success, forced to choose between meeting product demand and maintaining their brew pubs. Yet, because the market has changed so much, there is really no good reason for state law to impose this dilemma.

Even the most successful Idaho breweries stand little chance of squeezing out smaller competitors. It is illegal, for instance, for a producer to price-discriminate among distributors or to bar a distributor from carrying products from other breweries.

And given how crowded and varied the craft beer scene has become, it is difficult to imagine any of Idaho’s businesses gaining hegemony over the others merely because they were allowed to run a couple of brew pubs.

The solution: Redefine the microbrewery to keep up with the changing times. The easiest method is for the Legislature to raise the barrelage limit to accommodate what our largest native breweries might generate in the foreseeable future – perhaps 120,000 to 150,000 barrels per year.

Craft brewers and their brew pubs put a lot of people to work, often in rejuvenated light industrial space that would otherwise go vacant on city fringes.

Rising annual output creates tax revenue for our state and drives up demand for Idaho hops, barley and other agricultural products.

We ought to give our native breweries every chance to thrive, and doing so right now is as simple as letting them stay open.

Click HERE to read original article.

For more information, please contact a member of our Wine, Brew, and Spirits Group, or call 208.344.6000.