USA, MA: Rule change alarms small brewers

A rule change at the state’s Alcoholic Beverages Control Commission could hurt 25 craft breweries in Massachusetts, and some smaller beer makers say it could even put them out of business, Boston.com reported on August, 4.

Brewers such as Samuel Adams beer maker Boston Beer Co., Mayflower Brewing Co., Ipswich Ale Brewery, and others that operate under what is called a farmer-brewery license would be affected by the change, which has caused a buzz in the industry since it was disclosed in a commission advisory earlier this week. The change still has to be finalized, state officials said.

The new rule would require brewers under that license to grow at least half the hops and grains they use, or get them from a domestic source - which many said would be difficult in Massachusetts. Without that license, breweries could not operate on-site tastings, and, beer makers fear would be forced to pay distributors to deliver their beer to retail outlets rather than save money by doing it themselves.

At Cape Ann Brewing Co. in Gloucester, owner Jeremy Goldberg said that the loss of his farmer-brewer status would likely put his entire operation out of business. At the least, he said, he’d be forced to close his new brew pub, in which he invested about $1 million, and lay off 30 employees.

"We would have a brewery that couldn’t serve beer on the premises," said Goldberg, who said it could be very hard to get the local liquor license he would need to operate in Gloucester without his farmer-brewery license. "It is going to kill my business."

State officials say the change is meant to clarify regulations defining a farmer-brewer, or someone who grows cereal grains or hops to produce a malt beverage. The law is designed to promote farming in Massachusetts.

Current state regulations do not quantify just how much of their own ingredients beer makers must grow. But on August, 1 the commission issued the quickly controversial advisory saying the holder of a farmer-brewery license - which costs hundreds to thousands of dollars less than other brewers’ licenses - must now prove that they grow at least 50 percent of the cereal grains and hops they use in a year to make beer or other malt beverages, or get those ingredients from "domestic farmland," which brewers read to mean farms in Massachusetts.

"If they want a farmer-brewer license, they have to show that they are engaged in farming, and that they grow the ingredients," said William Kelley, general counsel for the commission.

While the 25 affected brewers do grow a portion of their cereal grains and hops, few could grow the 50 percent the new rule demands. Meeting that requirement, they say, would be nearly impossible.

10 August, 2011