An “historic coalition,” as its being billed, took center stage at the Montana Brewers Association Fall Conference in October in Missoula to discuss a proposed bill to allow license stacking in the alcohol industry.

The bill, expected to be introduced at the 2015 Montana Legislative Session, would effectively allow breweries to directly purchase a retail license and allow retail on-premise locations to purchase brewery licenses.

Dual license ownership is not presently allowed, forcing breweries seeking the privileges of a typical bar to undergo a complicated workaround with significant ownership, accounting, taxation, and other consequences.

In the wake of a contentious and unproductive 2013 Legislative Session which saw the Montana Tavern Association put Montana’s brewers squarely in its crosshairs, industry members chose to sit down in a search for common ground.

News of an agreement among the participants trickled out this summer with sparse media coverage with the Tavern Association and Montana Brewers Association hailing support from all three industry tiers in a collective bid to advance the industry.

But was it?

In a dimly lit, chilly conference room at a downtown hotel at the October conference, members of the coalition took turns answering three questions: 1. Do you think the coalition has been worthwhile? 2. Do you think the coalition should continue? 3. Do you think license stacking is a good idea and why?

Participating in the panel discussion were Neil Peterson, Executive Director of the Montana Gaming Industry Association, Mike Hope, President of the Montana Tavern Association and co-owner of the Rockin R Bar in Bozeman; John Iverson, Government Affairs Director of the Montana Tavern Association, Dale Markovich, owner of Summit Beverage, Kristi Blazer, Executive Director of the Montana Beer and Wine Distributors Association, Brian Clark, owner of Fun Beverage, Todd Scott, Past President of the MBA and owner of Bozeman Brewing, and Josh Townsley, current President of the MBA and co-owner of Tamarack Brewing Co. Tony Herbert, Executive Director of the MBA, moderated the discussion.*

Peterson kicked things off by explaining his take on the value of the coalition. “You develop relationships with people and you really understand where people are coming from and what their positions are and you try and work toward a compromise and I think that’s what we did with the stacking bill,” Peterson said. “Is it everything everyone wanted, no, its not, but I think it is a good step in the right direction and something we can build on in the future.”

Speaking on behalf of the Montana Tavern Association, Hope and Iverson offered a bit of an olive branch to the group comprised largely of brewers and brewery owners.

“Without the coalition, who would have imagined two years ago at the end of the session, a group of us would be sitting up here and you all wouldn’t have guns trying to shoot us.” Hope quipped. “So in all reality my hat’s off to Tony for pulling this together and I think it’s important to get to know each other and understand each others’ concerns.”

“The most exciting thing about the coalition is that we’ve committed to continue to work together,” said Iverson. “The compromise bill we have before us is not the last piece of work that we’re going to do, it’s the first piece.”

Reflecting on the process undertaken by his organization to consider the bill, Hope noted a new outlook for the Tavern Association’s leadership. “The reason I am president of the Tavern Owners Association today is because I was sick of the process that happened at the last [legislative session],” said Hope. “I think how we handled that bill, which was a backroom bill in my opinion, was wrong.”

With refreshing candor, Iverson noted the Association’s effort during the 2013 Legislative Session was led by certain members who have since been “asked to sit down.” “They got the bill they wanted to run,” noted Iverson. “The public didn’t like it and that idea has gone to the graveyard where many bad ideas should be.”

“As the Association stands today, we understand the necessity of your taprooms,” Hope said. “Does everyone in our Association agree with them? Absolutely not. But its written in the law and we’re not here to fight that or to change that.”

When it came time for distributor representatives to speak it was quickly apparent the bill does not enjoy universal support.

Speaking for the Montana Beer and Wine Distributors Association, Dale Markovich characterized the middle-tier’s stance as less than satisfied. “The beer distributors think that there are probably better solutions to the issue of stacking licenses.” said Markovich.

Still, he acknowledged the value of the coalition meetings. “About the first hour and a half [of our first meeting] it was a little tense . . . . but at the end of the meeting we were all drinking beer together,” said Markovich. “This coalition gives us a platform to voice our opinions and everyone is respectful and there will be many more issues down the road.”

Brian Clark, owner of Kalispell’s Zip Beverage was more direct in describing the distributors’ take. “There was good, lively, healthy discussion, there was a willingness to comprehend other people’s positions, and you could disagree without being disagreeable,” said Clark. “But then somewhere along the line a timetable kicked in. We went from lively, healthy conversation to ‘there must be a deal and it must happen now.'”

“Somewhere around March it was no longer a coalition because the deal was done and you’re either on board or you’re not on board,” said Clark. “If the coalition is continuing only to make this deal happen, then its not a coalition or discussion anymore. But I think there is something to be said about continuing to talk, but if it’s a done deal, I’m not so sure.”

“From our perspective [the stacking bill] is really not a compromise,” Clark noted. “It was a deal done between the boards of the MTA and the MBA to stack the deck for the option for every bar in Montana to be a brewer and every brewer in Montana to be a bar and to participate in all three tiers with impunity.”

“If a coalition is only about legislating economic advantages for yourself, then it’s only a matter of time before another interest, such as giant retail and giant manufacturers who are not in this room, will legislate more for their own preferential treatment at the risk of the entire system,” said Clark.

Todd Scott, owner of Bozeman Brewing Co., expressed his support for the coalition’s work and noted some other areas he’d like to see it work on. “Of the things I hope the coalition can address in the future, the availability of licenses, the cost of a license, the 10,000 bbl ceiling . . .  and the quota system,” said Scott. “I’d love to see us eventually talk about doing something with the quota system and making sure all brewers have equal availability to various markets through the distribution system.”

Questions from the audience revealed an underlying tension with the proposed bill and the process to create it. As it turns out, none of the various associations’ members who have been asked to support the bill have seen a copy of it.

This point was brought home during a panel discussion of legal issues the following morning. Audience members asked several questions about the potential effects of the bill and its relation to other state and federal regulations. The answers were succinct. No one can analyze a bill nobody has seen.  [Full disclosure. I participated as a panelist in the legal discussion and our law firm was one of many conference sponsors.]

Two parts of the industry were notably absent from the coalition, distillers and consumers. Their lack of representation made a comment from Kristi Blazer, Executive Director of the Distributor’s Association, all the more apropo. “It’s great to have a place at the table,” said Blazer. “They say if you don’t have a place at the table, you might be what’s on the menu.”

All parties agreed the Legislature prefers not to pick winners and losers. It much prefers for the affected parties to bring solutions that have wide ranging support. That’s a sentiment which appears destined to be challenged given the apparent lack of unity among coalition members.

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* Brad Griffin, Executive Director of the Montana Restaurant Association, Shauna Helfert, Liquor Control Division Administrator of the Montana Department of Revenue, and Sam Hoffman, owner of Red Lodge Ales (a non-MBA brewery) have also participated in the coalition meetings, but were not present. Instead, they presented written comments read by Tony Herbert.