The state legislature should give the Drink Local Economic Recovery Act a hearing

I’ve written before about the damage that the Covid-19 pandemic and misguided government policy responses to it are having on Minnesota’s thriving brewing and distilling industry. The Minnesota Craft Beverage Council (MCBC) reports that :

• Bars and restaurants saw a reduction in staff of 61.97% and 39.55%, respectively, in 2020. With COVID restrictions in place, 93% of these establishments reported negative financial health…
• There were nearly 200 breweries in MN employing more than 4,500 prior to the pandemic. Several breweries have closed permanently, while many more have shut down until they can be open at a larger capacity. Last year left many with a revenue loss between 25-75% and a job loss of 28.43%.
• The wine industry, which includes cidermakers, saw a reduction of 12.11% in it’s workforce last year. Wineries that rely on tourism and events lost revenue due to the restrictions. Cideries pivoted to consumer sales directly from their taprooms, but due to the lack of ability to self-distribute, the loss in on-premise consumption led to significant revenue loss…
• In 2019 the distilling industry boasted nearly 450 jobs, seeing a reduction of 23.87% of their workforce in 2020. Due to the pandemic, many distilleries pivoted to supporting communities through creating hand sanitizer. They relied on liquor store sales with regional/national brands.

A bill – the Drink Local Economic Recovery Act (SF 1176/HF 1192) – would go some way towards helping them. The bill’s measures would:

• Allow all breweries to sell beer to-go in cans, bottles, and growlers up to 64oz, with a per person/day purchase limit of 768oz (and an annual limit of 750 bbls)
• Allow brewpubs to distribute up to 200 barrels of their own product
• Allow cideries to have more access to the market through up to 75,000 gallons of self-distribution
• Create more standard taxation for cideries/wineries to align with federal statute
• Allow distilleries to sell up to 1.5 liters per person/day
• Allow bars and restaurants to permanently sell limited amounts of beer (72oz), wine (1 bottle), and cocktails (34oz) to go with take-out orders
• Allow liquor stores & bars/restaurant to fill growlers

The MCBC claims that the bill will:

• Put 100,000+ food & beverage workers who were furloughed and laid-off due to the pandemic back in their jobs
• Allow these small/family-owned businesses to recover faster
• Support economic recovery throughout the state through increased sales tax revenue, increased tourism, and an increase in employment for this year and years to come
• Move Minnesota out of last place when it comes to liquor laws

These craft breweries are innovative small businesses being hampered by regulation. These regulations do not exist to protect the consumer but intermediaries, who can, they claim, only stay in business if the law imposes a barrier between willing producers and willing consumers. As this is an affront to economic freedom, unjustifiable on either moral or economic grounds, we at the Center have long supported measures like allowing Minnesota’s breweries, bars, and restaurants to sell alcohol in any size package for at-home consumption and the #freethegrowler campaign.

The bill has plenty of support, but so far the state legislature won’t give it a hearing. We hope that lawmakers will act on this, but time is running out.

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