Minnesota’s craft brewers have been an economic success story in the last decade. In 2011, there were 35 craft breweries operating statewide, according to the Brewer’s Association. In 2020, that number was up to 217, an increase of 520 percent. While the craft beer boom has been a nationwide phenomenon, Minnesota has been something of a market leader: it ranks 13th nationally for breweries per capita.

This success is largely due to free market policies, which have given these breweries the freedom to innovate and grow. Starting in the 1970s, the federal excise tax has been cut and smaller breweries exempted. Deregulation saw home brewing legalized. Brewpubs —breweries with restaurants or pubs on the premises — were legalized in every state, Minnesota doing so in 1987. In 2011, Minnesota’s production breweries won the right to operate and sell their own beer onsite in a taproom. 

Nevertheless, both tax and regulatory barriers to further growth remain. Removing these can help our state’s craft brewers to continue their success.

Remove the ‘Growler Cap’

In the regulatory sphere, one of the main barriers to the expansion of craft breweries in Minnesota is the ‘Growler Cap’.

This law restricts breweries producing more than 20,000 barrels annually from selling ‘growlers’ (containers that can be used to transport beer). Breweries that grow to approach this level of production face a choice between continued expansion or ending the sale of growlers, which can make up a substantial share of taproom sales.

Legislators should remove limits such as the Growler Cap. This would free Minnesota’s smaller breweries from the choice between growth and onsite sales and allow consumers greater choice.

John Phelan is an economist at the Center of the American Experiment.