The Most Beer Friendly State? Ha. Montana Looks to Go Backward

News broke this week that the Motley Fool deemed Montana the most “beer friendly state.”  Predictably, beer centric blogs, trade associations and your average Montana beer lover tweeted the news or posted it on facebook with giddy abandon.

Even local news outlets picked up the story. Factors used to rank the states for their beer friendliness included per-capita beer consumption rates, the number of breweries and bars per 100,000 people, and the state taxes imposed on the production of of beer. It’s a good set of factors, but not the important ones. 
Over the past several months, various stakeholders in Montana in the alcohol-related industries have met to discuss licensing and related issues.  You’ll recall the 2013 Montana Legislature failed to pass a bill (50-50 vote) to create an interim study committee to review the same issues and report back in advance of the 2015 session. 

Participants in the current discussions include the Montana Tavern Association, Montana Brewers Association, representatives from the Restaurant, Gaming, and Distributors’ Associations, the Department of Revenue, and representatives from breweries who are not members of the Montana Brewers Associations.  I’m not privy to the discussions taking place, but I’ve had conversations with people on all sides.  It’s safe to say everyone would like to avoid a repeat of the last legislative session.  It’s not safe to predict any particular outcome from the effort. 

How does this relate to our status as the most beer friendly state? Take a look at those factors used to compile the rankings – including the number of breweries and bars per capita.

Now try this on for size.  The number of bars, restaurants and other non-brewery establishments in Montana is for all practical purposes fixed. The number is not going to increase any time soon.  The number of licenses is controlled by a quota system.  In Montana’s most populous areas, the number of licenses issued exceeds the number available.  Thus, the number will retract before it moves forward.

The current exception is breweries.  There is no quota on the number of breweries. So long as a brewery stays under 10,000 bbls of annual production, they can also serve limited quantities for on-premise consumption.

By all accounts, the Montana Tavern Association wants to change that.  Not the 10,000 bbl limit, but the lack of a quota on the number of breweries.  Under our current system, brewery taprooms represent an alleged threat to the MTA’s members.

The last version of the MTA sponsored bill to restrict brewery taprooms (which ultimately failed) included a provision allowing a version of license stacking – the ability of a brewery to also purchase a retail license to “act like a bar.” But guess what? That ability would come with a price.  Had the bill passed, that option would only available to currently operating breweries and only for a limited time.  All others (and all new breweries) would be required to adhere to new and more restrictive sales limitations.

Effectively, it’s a back-door way of creating a quota and word on the street suggests even direct quotas are being batted around in the current discussions among industry members.

Given the success the Montana Brewers Association had in defeating the MTA’s 2013 efforts (thanks in part to very active and socially connected beer lovers), its member breweries would never go for such a proposal, right?

It is fairly well known that Montana’s largest breweries – who are not members of the Montana Brewers Association – support the concept of license stacking.  It’s not a positive industry-wide move to make, but it can definitely be a smart move for an individual business.

It’s not out of the realm of possibility to think some of Montana’s smaller and mid-sized breweries – members of the MBA or not – might be interested in the idea, too.  Why? If a small business doesn’t think think they have any real prospect of getting a better deal, they might very well be inclined to take the only one it’s offered.

Here’s another idea. Maybe they’re looking to the wrong people with whom to make the deal. Notice none of us consumers are sitting around the discussion table.  None of the thousands of beer lovers who tweeted, texted, called, emailed or otherwise contacted legislators in support of beer has even been consulted. That’s a gigantic oversight and one that should concern every beer lover in this massive state.

License stacking is not the only option for addressing particular issues. For example, but for the 10,000 bbl limit for on-site tap rooms, Kettlehouse Brewing Co. and Big Sky Brewing Co. would not need license stacking to have the ability to sell beer for on-premise consumption.  Raise or eliminate the limit and all the breweries are placed on equal footing. Together. Making their own deal with the help of their biggest fans – the consumers.

By several accounts the Montana Tavern Association is currently executing a widespread divide and conquer plan, meeting with member and non-member breweries and even distilleries to sell their plan to create a new quota system.  That may not be what it’s called or even quite what it looks like, but that’s the net effect.  Convince current breweries to get theirs while the gettin’ is good.

It’s a good strategy.  It’s what’s worked for the 80 years of our Montana quota system. Keep the “haves” to an easily managed number, collect them all under one roof, and band together to prevent any diminution – real or perceived – to the treasure they’ve acquired.

And what have we received from that system?  Frequent fighting between the haves and the have-nots. Tap rooms that are limited to sales between 10 a.m. and 8 p.m. A total ban on retail “bottle shops.” A virtual inability for a mom and pop sandwich shop or pizza joint to add a couple of taps or a cooler of beer for on-premise consumption.  A continuing concentration of the right to sell liquor in a handful of look-alike casinos. License stacking won’t fix any of that.

Heck, even a bill to allow beer and wine shops – ahem, grocery stores – to conduct up to 12 limited tastings per year was defeated at the 2013 Montana Legislature.  Guess who fought it?  The Montana Tavern Association – the great protector of the quota system.  They told the legislature it would lead to a slippery slope of a lack of control over intoxicating substances. Look it up.

The most beer friendly state?  Ha. We’re not even close and we’re looking to take a step backward. Consumers had better beware.  We’re the ones being forgotten in the discussion.

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