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Brewers Keep Wary Eye on Legislature
Bills that could affect on-premises sales, licensing floating in Helena
Brewer Craig Koontz uses a flashlight to check the level of a porter being transferred from the fermenting container to an oak barrel at Tamarack Brewing Company in Lakeside. - File photo by Lido Vizzutti | Flathead Beacon
 The 63rd session of the Montana Legislature is well underway, and local breweries in the Flathead have their eyes on Helena as lawmakers consider new rules and regulations that could affect the industry.

Already, one bill that would have limited taproom sales has surfaced and then was dropped. But as microbreweries continue to grow in Montana, they will likely receive more attention in the Legislature, according to Josh Townsley, co-owner of Tamarack Brewing Company in Lakeside and vice president of the Montana Brewers Association.

“It’s been a hot session a little bit as far as just trying to play defense,” Townsley said.

The first bill that caught the association’s attention was a draft sponsored by Rep. Jeffrey Welborn, R-Dillon, that would have limited on-premises sales to 10 percent of a brewery’s production, with the remaining 90 percent to be sold through distributors.

“The 90/10 bill was definitely something we strongly opposed; any percentage really makes it difficult for the industry to grow,” Townsley said.

Many start-up breweries begin by selling their product through taprooms, or “sample rooms.” There are already limits in place on these sales: no more than 48 ounces per person, per day and the taproom can only be open from 10 a.m. to 8 p.m.

Adding a percentage restriction would cripple many start-up and established breweries, Townsley said, in an industry that is increasingly becoming a boon for Montana’s economy.

According to a report from the University of Montana’s Bureau of Business and Economic Research, craft brewers in Montana are responsible for more than 430 jobs and nearly $50 million in private-sector sales. Breweries are also responsible for $1.5 million in state taxes.

Townsley said he has heard of more percentage-based legislation floating around in Helena, but is unsure if it will come to fruition. There are also other drafts regarding breweries and licensing, he said, as well as some placeholder draft requests that could affect the industry.

Marcus Duffey of Great Northern Brewing Company in Whitefish said he is keeping an eye on the happenings in Helena, but is not concerned about licensing-based laws.

Duffey said he understands the reasoning behind some of the proposed ideas to limit on-premises sales, because liquor-based businesses are trying to protect their investments.

“I understand bar owners wanting to protect the values of their licenses,” Duffey said.

But that protection shouldn’t come at the cost of market competition, according to Greg Johnston, owner of Flathead Lake Brewing Company in Woods Bay.

Taproom sales represent over half of his brewery’s sales, Johnston said, and keeping track of those numbers gave him more insight when he was weighing whether to expand.

Armed with that information, Johnston said he felt more confident with the decision to move the brewery to a larger location in Bigfork.

“If taproom sales were only that small percentage we might not have done that,” Johnston said.

Bills like the 90/10 would stagnate many breweries, Johnston said, and would likely keep others from entering the business.

Townsley said he understands the value of competition in the marketplace, and is wary of laws that would put breweries at a disadvantage.

“I don’t think anybody has a right to be complacent and say there can’t be any more competition,” Townsley said.

“Do I foresee more legislation? I hope not. I think that the market itself will play itself out. I think competition breeds excellence, everybody has to adapt and change to the times,” he said.
 
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