Brewers fight for bill to make more beer

Of Montana’s approximately 62 breweries, Cabinet Peaks in Libby is one of the smallest, producing only 600 barrels last year, a far cry from the 60,000 barrel maximum put forward in senate bill 541 which, if implemented as is, would dramatically increase the growth of the industry.

“I’ve been at it since bill 541 hit the ground. They are probably tired of me emailing them all the time” says Sarah Sorenson, one of Cabinet Peaks Breweries owners, of her recent involvement advocating for the bill.

Sorenson says she didn’t realize that running a brewery would involve being political “But my entire life savings is tied up in the future of this industry, I have no choice but to be there. We have to be successful.”

After a trip to Helena on March 22nd to meet with members of the Montana Brewing Association and other interested parties, Sorenson is now eagerly waiting to see what the implications of a series of amendments to the bill are.

In the bill, carried by Rep. Adam Hertz, R-Missoula, breweries asked to be allowed to increase the amount of beer they can produce each year from 10,000 barrels to 60,000 barrels, without the increase affecting their taproom sales limit.

As it stands, once a brewery is producing over 10,000 barrels, they lose their taproom sales. “The 10,000 barrel limit was arbitrary,” says Sorenson “it was set before craft brewing really took off and we couldn’t imagine anyone producing that amount in a year. But brewing has been so successful over the last 30 years that more and more breweries are beginning to hit that threshold.”

Several Montana breweries have either stopped producing at 9,999 barrels to avoid losing valuable revenue and employment from the taproom or, in some cases, are giving away beer ‘samples’ instead of selling them.

The first amendment put forward lowered the annual barrel amount to 12,000, an increase of only 2,000 barrels above the current limit. Breweries hit back that this increase would not make it worth their while, as expanding production even incrementally means purchasing expensive new equipment. “If a brewery is thinking about expanding, they’ve usually been planning it for years, and it involves millions of dollars” says Sorenson.

Senator Tom Facey of Missoula offered a compromise motion to raise the limit to 30,000 barrels, but the motion failed.

Consequently, the amount was raised once again to 60,000 and subsequent amendments put forward a tax increase of $1 per barrel on brewery’s who produce more than 10,000 barrels per year and changed some language which explains how to calculate total production if a brewery has more than one location or has a parent company.

“We went from it looking disastrous to now looking almost reasonable” says Sorenson, who knows the effects of the bill won’t touch her or business partner Kristin Smith in the near future, but sees that expansion for the industry is good for everybody “people want to drink Montana beer and we have all the makings of the industry right here - local grain, clean water.”

The biggest brewery in the state, Big Sky Brewing Co., currently tops out at 45,000 barrels a year. The only Montana brewery that has never been allowed to sell pints, Big Sky would be allowed to begin selling beer for consumption at its existing taproom if the bill is passed.

Co-owner Bjorn Nabozney estimates the brewery has given away more than $4,000,000 in free beer over the past 10 years, costing the state hundreds of thousands of dollars in excise and income taxes.

Sorenson appears incredulous as she speaks about breweries having to limit their growth to avoid the financial consequences “At Bayern brewery in Missoula, the owner, Jurgen Knoller, is now at 9,986 and a half barrels. He’s looking at a million bucks to get a different license to separate his taproom from his beer manufacturing business” she says.

The economic repercussions if the bill is not passed are obvious, says Sorenson “this is a bipartisan bill - legislators are tired of seeing zero progress and seeing that the economic train has left the station. First and foremost we are manufacturers and if it’s going to affect the economy positively, we’re all for it.”

At the time of press, the senate was still engrossed in revising the bill, so no outcome was known.