When it finally came to a vote Tuesday morning, the Senate Business, Labor, and Economic Affairs Committee wasted no time gutting the purpose of HB 541 with three amendments.  Those amendments could have a disastrous effect on Missoula’s Kettlehouse Brewing Co.

With HB 541, Montana’s brewers sought to raise production limits from 10,000 bbl to 60,000 bbl, a proposal overwhelmingly approved by the House of Representatives 85-14. The increase would allow breweries to maintain the right to sell beer for on-premise consumption when producing more than 10,000 bbl.

The Senate Committee disagreed, amending the bill to cut the increase down to a maximum of 12,000 bbl. In supporting the amendment, Senator Dan Salomon, (R) Ronan, stated the bill would allow a “little growth” while the Legislature decides how to address other alcohol licensing issues over the next couple of years.

In reality, the amended bill potentially forces Kettlehouse Brewing Co. to shut down its popular Northside taproom.

HB 541 includes language to define how to calculate the aggregate production total for breweries with multiple locations, parent companies which own multiple breweries, and breweries which contract with other breweries to brew their products.

Kettlehouse has three affiliated breweries, the original location on Myrtle Street, the brewery and taproom in Missoula’s Northside neighborhood, and the new K3 brewery in Bonner.

HB541 would require Kettlehouse to count the beer produced at all three breweries toward the production limit, a total which exceeds 12,000 bbl.

That wasn’t a problem with the original bill’s 60,000 bbl limit. But with the Senate Committee dropping the limit to 12,000 bbl, Kettlehouse would no longer be allowed to sell beer for on-premise consumption at its Northside taproom.*

With today’s vote to approve HB 541, as amended, the bill now heads to the Senate floor for a vote by the full Senate. The Senate has the ability to amend bills during floor votes. Should the Senate pass the bill with amendments of any kind, the bill goes back to the House of Representatives for further consideration.

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*Thanks in part to the current 10,000 bbl limit, Kettlehouse separated its Myrtle Street brewery from its taproom several years ago, which now operates as a retail location under a retail license. The primary purpose of the original HB 541 was to help ensure more breweries would not have to undertake such expensive and complex work-arounds in order to continue to sell beer at the breweries for on-premise consumption.

UPDATE:

Here is the text of the amendment approved at Tuesday’s hearing to define “affiliated manufacturers” for purposes of calculating the 12,000 bbl annual production limit.

“(3) For the purposes of this section, “affiliated
manufacturers” means a manufacturer of beer:
(a) that one or more members of the manufacturing
entity have more than a majority share interest in or that
controls directly or indirectly another beer manufacturing
entity;
(b) for which the business operations conducted
between or among entities are interrelated or interdependent
to the extent that the net income of one entity cannot
reasonably be determined without reference to operations of
the other entity; or
(c) of which the brand names, products, recipes,
merchandise, trade name, trademarks, labels, or logos are
identical or nearly identical.”