Craft beers are hugely popular, but brew pubs' market is limited by age-old Minnesota rules.
When Minnesota breweries won the right to sell their beer to visitors at on-site taprooms last year, brew pubs across the state thought they were next in line to broaden their reach.
Under state law, brew pubs are prohibited from selling their beer off-site to bars, restaurants or bottlers.
"People just assumed we'd be able to sell ours," said Dave Hoops, master brewer at Fitger's Brewhouse in Duluth, which serves its acclaimed beer at the three restaurants and five bars it owns and operates. But Hoops knows from experience that challenging the rest of Minnesota's liquor establishment is never easy.
"This is my 14th year at the brewhouse and I've spent 10 of them going down to the Legislature" to push brew pub bills, he said. "But I think there's hope."
This year, the Town Hall brewery in Minneapolis hired a team of lobbyists to build the support needed to change the state's long-standing and elaborately constructed walls between retailers, brewers and distributors. Brewery founder Pete Rifakes knows it will be a long-haul fight.
"It's going to happen," he said confidently. But Rifakes knows it may take more than one legislative session.
Minnesota laws dating back decades decree that the only place to buy brewed pub beer is at a brew pub. You want Fitger's beer? Go to one of its restaurants up north. Aficionados of Town Hall's brews can come and fill a half-gallon growler jug at the brew pub. But if you're thinking of getting those brews in a six-pack at your neighborhood liquor store or by the pint at your neighborhood bar, you're out of luck.
"The law should be modernized," said Andrew Schmitt, director of Minnesota Beer Activists, which tracks beer issues on behalf of consumers. "I don't think anything would happen [if the law changed] except that more people would be enjoying locally made beer."
Rifakes says at that at least once a month he turns away out-of-state beer distributors who want to stock one of Town Hall's award-winning microbrews.
But letting a business be both brew pub and brewery would upend a system that has long had a wall between those who make the beer and those who sell it. That's not a change the state's influential liquor lobby will accept willingly.
"This isn't cupcakes, it's not pastries, it's not bread we're talking about. This is booze," said Frank Ball of the Minnesota Licensed Beverage Association. "We really do support folks in the craft brewing industry. We love their product. But we also have to be mindful that this is a controlled substance we're dealing with."
After preparing all session to push a bill this year, Rifakes said late this week that the strategy is shifting to build grass-roots support, with the big push coming next session.
Michael Madigan, president of the Minnesota Beer Wholesalers, said that brew pubs exist at all only because the law was loosened enough to allow beer to be brewed and sold under the same roof. To bend the law further, he said, might break the whole system.
An opening for big brewers
In the days before Prohibition, big breweries often owned the local taverns as well. That monopoly led to abuses that ranged from price-fixing to saloon-based prostitution rings.
Creating an exemption to help out local brew pubs could open the door for the large-scale breweries to sue for the right to get into the retail business as well, Madigan warned. There would be nothing to stop, say, Anheuser-Busch from buying up Applebee's.
"The effect of this would be to expose our laws to possible legal action," Madigan said. "If a Minnesota brewer could have an interest in retail, an out-of-state brewer could argue that they have the same right."
Nationally, Colorado and Oregon allow brew pubs to bottle and distribute. Madigan acknowledged that multinational brewing companies have not taken advantage of those laws.
Mark Stutrud, founder of St. Paul's Summit Brewery, said he's "neutral" on the brew pub bill, but sensitive to possible encroachment by microbrew pubs. Stutrud grew Summit from a storefront on University Avenue in 1989 to a national presence that by 2009 had a 2 percent share of all the beer sold in Minnesota.
He sees something a bit unfair in brew pub owners -- who chose to get into the retail side of craft beer -- wanting to cross over to the manufacturing side now that they've built up a customer base. Changing the current system "would not be good for the industry as a whole," Stutrud said. "It would be a competitive disadvantage for the smaller breweries."
Where's our bill?
Even beer enthusiasts are divided on whether the state should change the law.
"It's a great time to be a fan of craft beers in the U.S. and especially in Minnesota," said Tyler Anderson, craft beer manager at Zipp's Liquors in Minneapolis. "There's absolutely a demand, if we were able to sell six-packs, 12-packs of Town Hall, Barley John's ... I'd love to be able to sell Fitger's. Having that option, of being able to sell those beers, would be great."
At the Four Firkins specialty beer store in St. Louis Park, owner Jason Alvey agreed that there's a "huge demand" for local microbrews. But he's leery of too big a change.
"What nobody wants is to go back to the situation that existed before Prohibition," Alvey said.
There is little doubt of the demand for local craft beer. When Town Hall announced it would sell a limited quantity of its barrel-aged craft beers, devotees turned out in droves, jugs in hand.
"We had people lining up at 8 a.m.," Rifakes said. "We don't even open until 11. We sold out in an hour and a half. That's roughly 1,000 [growlers] in an hour and a half."
Rifakes said he's happy that brewers got their bill, but, he said, "Where's our bill?"
Jennifer Brooks • 651-925-5049