E-Malt.com News article: USA, NH: Local regulations hinder craft brewers growth

While the Redhook Ale Brewery has seen tremendous growth and only expects it to continue in the city, company officials filled in state representatives on February, 11, on ways the state is hampering that growth, Seacoastonline.com reported on February, 11.

About a dozen state representatives from around the Seacoast — including Tim Copeland, R-Stratham, Joanne Ward, R-Stratham, Amy and Larry Perkins, both Seabrook Republicans, and Fred Rice, R-Hampton — were given a look into the brewery’s operation, its continued growth and the obstacles the company faces related to state regulations.

“This is a pretty impactful state in our industry, in the craft brewing industry,” said Redhook brewer Andy Schwartz. “There are going to be some things that we could use your help with. They are just silly.”

New Hampshire regulates the beer industry more stringently than the federal government, those at Redhook said, limiting the types of beer they can produce in the state. The state’s historic definition of beer, which does not allow for higher alcohol use or unique ingredients, some as simple as sugar, fruits and spices, is often the root of the problem, they said.

The beer industry in New Hampshire is a $1.2 bln effort, which employees more than 5,000 people, said Andy Thomas, president of commercial operations for the Craft Brew Alliance, which operates Redhook and two other breweries. Redhook recently invested $4 mln in its brewery at Pease International Tradeport to increase production by 50 percent.

Established in Seattle in 1981, Redhook opened in Portsmouth in 1996 to expand to the East Coast and is now the largest craft brewery in the New Hampshire, producing nearly 200,000 barrels a year. In addition to Redhook, the Craft Brew Alliance includes Widmer Brothers Brewing and the Kona Brewing Company.

The popularity of “craft beers,” like those produced at Redhook, is seeing tremendous growth, with consumers seeking variety and breweries like Redhook are constantly looking to meet that demand.

“What makes craft breweries different is we are constantly having to be innovative,” Schwartz said. “The market is changing. It’s the smartest consumer market we have ever had. It’s critical that we are able to be innovative and strive to do things differently.”

While Redhook is nationally distributed and has bi-coastal brewing opportunities, the company can’t sell, produce, or ship a brew containing any unnatural ingredient in New Hampshire. The company is anticipating $250,000 in costs for out of state storage for these brews that can be produced at its other breweries.

“It’s not only lost revenue, it’s lost taxes,” Schwartz said. “It’s inhibiting our ability to create, which is the heart and soul of our industry.”

In addition, the company pays 28 cents for a cardboard cutout to hold every two 12-bottle packages created, per state regulations for transport.

“The Seacoast area has become a hotbed for things culinary and trendy,” Thomas said. “As that happens, this becomes more of an issue.”

Rep. Rice said he’s surprised he hasn’t heard of these issues before. Those at Redhook said they’ve become more apparent as the East Coast branch of the company is growing two to three times more than the West Coast.

“Some of these seem to be slam dunks,” Rice said.


15 February, 2012