Guest Post by Todd Parker - Master Brewer for Copper Canyon
When I was first approached about this topic by Kevin Nash, I enumerated 5 different legal issues that make it more difficult for Craft Brewers in Michigan (this is not an all-inclusive list). In no particular order, here they are:
1. An owner cannot own more than 3 brewpubs.
2. An owner cannot own a brewpub and a micro
3. Brewpubs cannot distribute
4. Micros cannot self distribute
5. Technically brewpubs are not allowed to be at the Summer or Winter Beerfest- or any others for that matter.
To begin with, I should probably introduce some history into why these laws were created. Before Prohibition in the United States, there was very strong political pressure to rein in the sale and production of alcoholic beverages. A seedier side of the alcohol industry that helped lead to Prohibition was the “tied houses” which were common. At the time, many taverns were “tied houses” (which are still common in England), where the tavern owner was lent money, given supplies (furniture, glasses, decoration, or advertising) or actually rented their location from a brewery (breweries at the time were also real estate moguls) and thus were “tied” to carrying only that brewery’s beer. This led to some predatory type lending with some strong arm tactics to keep the system in the brewery’s best interests. It also created an environment where the tied house pushed the alcoholic beverages more than they responsibly should have, which in turn led to the aggravation of the local communities. Then came Prohibition and its repeal. The federal government left it up to each state to make its own alcohol laws. Many states set up “three-tier” systems, where a producer has to sell it to a distributor who then sells it to the consumer. This was to avoid tied house situations.
Having worked as a brewer in California, Wisconsin, and Michigan (and have seen how different each state is in respect to how it regulates Craft Beer) I will endeavor to explain what makes it much more difficult for the Craft Brewer in Michigan.
1. An owner cannot own more than 3 brewpubs.This rule was established to avoid the system of tied-houses. This law punishes effective owners. If an owner is good enough to own more than three, most likely he is doing something right. If beer from one of three U.S. megabreweries can be found in 97% (assumed number) of all establishments serving beer, any laws trying to keep monopolies out aren’t working.
2. An owner cannot own a brewpub and a micro. This is also a strategy to avoid the tied houses, but it again punishes effective owners. When I was the Head Brewer at the Royal Oak Brewery (a brewpub), I had distributors tell me that they had been asked by their customers for my beer. Imagine if your brewpub brewer creates a wildly popular brew and you want to take that to the masses via a microbrewery. You can’t. You have to have it contract brewed by another company.
3. Brewpubs cannot distribute. I do not know why this legal issue was created. It does not in effect set up a tied house type of situation. This issue penalizes those brewpubs with excess capacity that they could otherwise sell on the open market. It makes a new owner decide whether they want to be a microbrewer which can distribute, but cannot sell liquor or any other beers, or a brewpub, which has to have a full service kitchen and have 25% of their gross sales in non-alcoholic items. When I worked in California at BJ’s Brewpub, we distributed our excess beer to other non-brewpub BJ’s restaurants. Our brewpub supplied several other BJ’s taprooms with our excess beer. In using this system, BJ’s is now one of the biggest chains in the United States. In 1996, they had only 7 restaurants, they just recently opened their 73rd.
4. Micros cannot self-distribute. This legal issue was designed to avoid the strong arm tactics that some breweries used pre-prohibition. On a large scale, distribution is a difficult job for any brewery to conduct. However, if you are a small microbrewery, there are limited numbers of distributors, and should you be carried by one, you are then a small fish in a very large pool. A lot of time, your beer gets lost or forgotten by the distributor salesperson or worse, your taps are lost to another brewery (within the same distributor) who paid a “reward” for new tap accounts. Many small micros lack the advertising budgets or extra money needed to pay these rewards. The micros have a limited sales force that can go out and try to help sell their products to the distributors customers. When I worked in Wisconsin (where limited self-distribution is legal), we had a region of the state which was not covered by a distributor and one day a week I would go and make deliveries to these locations. I effectively became our 2nd biggest distributor (bigger than our Milwaukee or Madison area distributors which had over 10 times the population), because I was not competing with 100 other beers in a distributor’s catalog. Limited self-distribution is a very viable way to do business. However, it is unfeasible for the micro to do it beyond a certain point. It is a boon for the distributor also, who the micro will need once they do make it to that point, and the micro will be feeding the distributor with plenty of their already garnered clients. There is no evidence that the breweries will not pay their taxes or that they will sell to others without liquor licenses or to underage kids.
5. Technically brewpubs are not allowed to be at the Summer or Winter Beerfests - or any others for that matter.This is effectively a byproduct of issue 3. This is currently being lobbied in Lansing and hopefully we will have a solution soon.
Every state has crazy beer laws that are left over from the days of Prohibition, most states have tried to clean some of these off of their legal rolls. In fact, Virginia just passed a law allowing sangria. This state needs to fix a few to help keep Michigan the Great Beer State. Our Michigan Brewer’s Guild is working to help fix some of these laws, unfortunately, there are bigger lobbies working against us.
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This month’s Beer Advocate is one of the better issues they’ve had. They have one story that is about how great Midwest breweries are: In particular, Michigan breweries. When I read something like that I always get excited.
One of their monthly features that I really enjoy is Advocate This. It is a page set aside for causes that are either political or personal. This issue’s Advocate This was written by Rick Lyke . His story is even more interesting to me because I have a co-worker who is going through the same thing. Rick Lyke, just found out this year that he had prostate cancer. Luckily he found out early because he was able to take a prostate-specific antigen (PSA). He had the surgery and he is doing fine. Two weeks after surgery he even felt good enough to go back to work.
Rick credits early detection for beating his cancer. He was concerned that not getting the word out on the importance of PSA testing is costing some of the over 230 thousand men diagnosed each year their lives. So he decided to create Pints for Prostates. It is a cooperative campaign between people who sell, make and promote beer as a healthy beverage. Their goal through advertising and product placement is to make men aware of the benefits of PSA testing.
Congratulations Rick Lyke on beating cancer. I hope that anyone who ever has to take on that foe can do the same.
For more on Rick’s story check out http://lyke2drink.blogspot.com/ or just click on his name above.
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Here is a press release from Craig Belanger and Jerry Jackson of Brew Bubbas about their new website. The launch date is today (July 1st, 2008). As I go through the site, I will comment more on it but I am really excited about Beer Locator. You should check out that page, it’s amazing! Right now, I’ll just let the press release explain what www.craftbeerlocator.com is all about.
NEW INTERNET COMPANY TO FOCUS ON CRAFT BEER
WARREN, MI (July 1, 2008)—Starting immediately, there will be a website focusing on craft beer. When completed, www.craftbeerlocator.comwill have many features built into the site not yet seen on the Internet. The site will include a beer locator, an events calendar, three beer-related podcasts, and a section of the website dedicated for the beer enthusiasts (the Beer Ex-plorers). All participants will maintain their personalized web page that can be updated or changed as desired.
Beer Locator: Perhaps the most exciting feature of www.craftbeerlocator.comwill be the beerlocator. Each brewery, beer bar, and beer store can have their personal webpage with complete content control. Many options are planned for release in the near future.Podcasts: The podcasts (Internet radio show) will be hosted by Craig Belanger and Jerry Jackson. Craig and Jerry have been doing podcasting for the homebrew community since September of 2006 and have exceeded 4,000 downloads per month. Their homebrewing podcast (Brew Bubbas) has listeners in 54 countries. They have interviewed several brewers including Ron Jeffries (Jolly Pumpkin), Sam Caligione (Dogfish Head), Wayne Burns (formally Bo’s, now Kuhnhenn’s) and Kirby Nelson (Capital Brewery). Local Michigander’s Chris Frey (Governing Committee of the American Homebrewers Association), and Ken Schramm (The Compleat Meadmaker) and former Michigander John Palmer(How to Brew), are regulars on their shows. They have also interviewed Charlie Papazian(Special Edition, 2006). A future interview with Rex Halfpenny (Michigan Beer Guide) will be posted on their first Michigan Beer Scene podcast. They have posted five video podcasts, including two from the Michigan Summer Beer Festival. They have also produced a DVD that was shipped to the participants of the Michigan Summer Beer Festival.
Michigan Beer Events/News: The Michigan Beer Scene podcast will focus on all beer-related events in the state of Michigan. Any beer festival, new beer release, special event or announcement that you want to share with the world, just make Michigan Beer Scene aware of it and it will be broadcast to the world!
Web Features: The site has a forum for discussing breweries, taprooms, and local homebrew clubs. While the site is now being launched, it is updated almost daily as there will be several features that will be unique for the beer enthusiasts (Beer Explorers).
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As I was talking to our friendly local Rave Distributor, he mentioned a place that I did not know had a great beer selection. It was a golf course. A golf course is one of the last places I would expect to have a fantastic beer selection. Rob, Sarah and I had to go and check this place out. What we found was a beer 
drinker’s dream.
It is just a short drive off of 275. Carleton Glen’s Chief One-Eye Lounge reminds me of a ski lodge. It has a large fire place with a nice lounge area around it. The huge window looks out on the 18th green. The rest of the room has wood walls with large old time cabinets that hide “the most beer around”. I knew I would love the place when I looked up at the TV and found The Simpson’s was on.
Let’s just cut to the chase and talk about beer. First thing I want to mention is their beer club. This year’s beer club has 325 beers and ciders. Here are some of the rules according to their beer book…
“Purchase a beer and the bartender will mark it off your list. For every 25 different beers that you drink you will make it to a higher prize level” Prizes include everything from a hat to a wind shirt. For Beyond 250 beers it just states surprise.
“Watch for your name on the board that is updated weekly, showing the current beer club leaders.”
“The beer club runs from March 1st through December 26th every year.”
The beer menu is top notch. It is separated by beer styles(not to BJCP style guidelines) which makes it user
friendly for everyone. Some of the styles include Eisbock, Barleywine and Tripel and of course you still have your usual suspects. The eisbocks they have include Adventinus Weizen Eisbock and EKU 28. Here is a sampling of what is listed under “Barleywines”…
Barleywine:
- Anchor: “Old Foghorn”
- Avery: “Hog Heaven”, “Beast”, “Mephistophelus” and “Samuels”
- Dogfish Head: 120 IPA and “Golden Shower”
When you order a bottle of one of the above, you get a Traditional German Cheese & Sausage Board.
Some of the breweries that are heavily represented are…
- Bell’s
- Avery
- Dogfish Head
- Great Lakes
- Darkhorse
- Sam Adams
There are also plenty of great European ales and lagers. All the beer is served in bottles.
If you make the trip to Carleton don’t be shocked to see us there. I am not going to join the beer club until next year. Other beer enthusiasthave a 4 month head start on me that puts me way too far behind.
Posted in Beer Bar, Beer News 3 Comments »
June 28, 2008 by Rob
Check this out from Great Divide Brewing - it could be yours for $60! Click the image for more info.
*thanks KC!
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June 26, 2008 by Rob
A quick and basic demonstration of stove top homebrewing aired on Fox 2 Detroit yesterday. The demo was done by Greg Burke of Woodward Avenue Brewery. Greg talks about the brewing process and explains some of his environmental friendly brewing processes. Click the image below to watch video.
Another homebrew article just popped in to my news reader that’s definitely worth reading by David Jakubiak of the Lake Villa Review titled: You Too Can Brew.
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“I have three kids and no money. Why can’t I have no kids and three money?”
-Homer Simpson
There will soon be a Granite City Brewery in Troy . The city of Troy gave them the okay and they plan on opening in 2009. They have over 20 breweries with another 2 more on the way not including their Troy location. They are not a brew on premises brewery. They brew off-site and then ship the wort to their restaurants. They then ferment the beer on site. They call the process Fermentus Interruptus™. I’m not sure on how I feel about this way of doing business. I’m a glad to see a place that gives you a different option from the big breweries opening up and could introduce new people to craft beer. The buy local side of me is upset. It turns craft beer into fast food. Why couldn’t someone from Michigan have been the one to open a new brewery in Troy?
What is interesting about the story of Granite (according to their web-site) is the two founders. One of them was a executive and the other a brewer. They started off with just one brewery and expanded into what they are today. The lesson you can learn here is that people who have money and a good business sense need to get with brewers that have the knowledge and artistry of brewing skills.
What we need is a something similar to a matchmaker who finds investors for brewers and soon we will have more breweries. Now, I know how to find brewers. I don’t know how to find people that can pony up the dough for a microbrewery. I’m a poor working class slob. What I can do is help investors find brewers so please take part in trickle down economics and give a brewery a chance.
Where do you find brewers? You can look on the Internet. Of course everything is on the internet now, even me. In particular you need to be looking at home brewing blogs. Beer bloggers think and talk way too much about beer. We have bored everyone with beer talk to the point where the only place to go is the blogosphere. Wouldn’t you want to give someone a break that loves something so much that he spends most of his free time brewing or writing about beer? Home-brew contests are another great place to find good brewers. All you have to do is look at results of the contest and you know whether they brew good beer. Pick the person who has the most medals. It’s that simple. There are professional brewers right now who are working under master brewers that could use a chance to show what they can do.
Of course, easier said than done. Times are tough, especially in this state, and money is tight. However, America still has 10 million millionaires according to a recent report. History has shown that when times are tough people like to drink more beer. Granted, people drank lagers that they could get for a cheap price.I would rather drink two 6.4% ABV beers than four 3.2% ABV beers. Craft beer is not a fad and can change along with American’s taste. Best of all there is still opportunity for growth. There are so many cities in Michigan, Ohio and Indiana that don’t have microbreweries. Chelsea and Monroe are good examples of towns in need of a microbrewery. All these towns need is someone to do it.
Posted in Beer News 6 Comments »
June 25, 2008 by Rob
Thanks to our friends at Kalamabrew for making this video. Very cool!!
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I just got my Zymurgy magazine in the mail today and the results of the 6th annual reader’s poll is in. 1,600 readers voted and the only rule is that the beer must be sold commercially somewhere in the United States.
Last year’s number one (Dogfish Head’s 90 minute IPA) is still the top dog. The number two is Bell’s Two Hearted. Founder’s Kentucky Breakfast Stout (tied 11th), Bell’s Expedition Stout (tied 15th), Bell’s Hopslam (tied 20th) are the other MI beers that made the list.
They also broke down the breweries by the amount of beers from their product line that got votes. Bell’s topped this list when the readers voted 18 of the beers that Bell’s brews as a top ranked beer. As for total votes, Bell’s topped that list too. Founders made the list at 15th and Jolly Pumpkin came in at 25th.
I do want to mention the great showing by Great Lakes. They were ranked tied for 16th in total votes. Their Edmund Fitzgerald Porter was ranked tied for 13th in top ranked beers. GLB is only about an hour and a half away from my house, so I consider them local.
Keep watching http://www.beertown.org/index.html for a complete list.
No news on whether Old Milwaukee Light got any votes. It’s an inside joke. Let’s just say sometimes you must drink with the devil to appreciate imbibing amongst the angels.
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June 23, 2008 by Rob
By Helen Lounsbury - The Bay City Times
Northeast Michigan adds a new recreational opportunity to its quiver this month - the Sunrise Side Wine and Hops Trail. “The only Michigan industry that hasn’t taken a hit since 9-11 is wine touring,” says Jack Matthias, a trail organizer and Hillman’s Thunder Bay Resort owner. “With two wineries in the Northeast now, and our blue collar crowds that like beer as much as wine, we threw in our two breweries, too.
Click here to read more.
Posted in Beer Event, Beer News, Brewery/Brewpub, Michgan products No Comments »
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