WV governor calls for regulatory relief on craft brewers

In his annual State of the State Address given to the state Legislature this evening, West Virginia Governor Earl Ray Tomblin called for regulatory relief on the state’s craft brewers.

“We must encourage the same innovation we ask of all of those investing in our state and allow our state’s entrepreneurs to put their skills to work without the burden of unnecessary state restrictions,” Tomblin said. “That’s why tonight I am proposing legislation to give our craft brewers increased opportunities to succeed as part of our state’s growing craft beer industry.

“Together, we can continue to show those across the country, around the world and here at home that West Virginia is the right place to make an investment and the Mountain State is a great place to do business.”

The exact language of his legislative proposals has not yet been released, but craft brewers are hopeful that the door is opening for a new and improved regulatory climate.

The WV Craft Brewers Guild has been working with state legislators over the past year on several proposals that would improve business opportunities for the industry and the governor’s support could only help.

State brewers and industry advocates have expressed interest in measures that would:

• allow production brewery tasting rooms without having to operate a restaurant (brewpub) or obtain a second license;
• permit increased opportunity for growler sales at breweries, beer retailers, and restaurants;
• simplify and reduce paperwork and costs for label registration;
• allow breweries to sell their own  bottled and canned beer at the brewery to consumers for off-premise consumption (in addition to the kegs already permitted);
• allow an exemption for small breweries from the franchise agreement requirement for small breweries wishing to sell their product to beer distributors. (WV small wineries are not required to sign franchise agreements to sell through distributors.);
• ease the more-burdensome and restrictive price posting requirements for small breweries to encourage the production and distribution of more unique, one-off and seasonal beers;,
• accommodate operation of dual proprietorships and revolving proprietorships to allow one production facility to be shared by more than one brewery, thereby accommodating incubators for new brewery start-ups;
• authorize breweries to hold tastings at fairs and festivals and sell packaged beer to consumers there in the same manner currently allowed to WV small wineries;
• reduce annual license fees for small brewery operation;
• better accommodate small brewery investments by non-residents of West Virginia.

Lack of tasting rooms holds back craft

In West Virginia a production brewery may not operate a tasting room at which it could sell its beers both by the glass and in packages for take out. WV law requires the small brewery to obtain an additional brewpub license–at considerable extra cost–and, therefore, establish and operate a restaurant, in order to sell draught and packaged beer to the consumer at its brewery.

Some craft beer advocates believe that this is likely the primary reason WV craft breweries have not had the success that those in surrounding states have seen. West Virginia’s small wineries have long had the right to sample and sell their products to customers at their tasting rooms without having to obtain a second license or operate a restaurant. In the past few years, neighboring Virginia and Maryland saw explosions in craft brewery growth following their law changes to allow production breweries to operate tasting rooms. One thing is clear: states with healthy craft beer industries allow brewery tasting rooms.

Parity with winery regulation

In many respects, WV craft breweries are only seeking regulatory parity with the state’s small wineries. In the early 1980s the state adopted new, progressive winery legislation. In it, small wineries were given a basket of tools to use to help them grow and be profitable. Brewery law was never changed to give small breweries those same tools.

Results of this imbalance are clear. The state currently has twice as many small wineries as it does small breweries — a very odd statistic in light of the fact that WV is much more of a beer drinking state than it is wine drinking. National per capita consumption statistics show WV almost at the bottom for wine drinking but much nearer the national average for beer consumption. These numbers would indicate that the state has a great opportunity to see disproportionate growth in its craft brewing industry, if only it had the laws and regs to support it.

If the state can adopt business-friendly small brewery legislation, it stands to gain new brewery businesses, new jobs, new tourist attractions, and new tax revenue. It surely seems like a win-win proposition.