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Minnesota Legislature

Jobs bill is brewing

Published (4/29/2011)
By Kris Berggren
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You could call HF703 a microjobs bill. It would allow craft breweries in Minnesota to open on-site taprooms where they could hold events and sell pints of their product, much as the state’s wine producers do.

The bill’s sponsor, Rep. Jenifer Loon (R-Eden Prairie), admits she isn’t much of a beer drinker, but is eager to help entrepreneurs like Omar Ansari, founder and president of Brooklyn Center-based Surly Brewing Company, grow their businesses and create jobs.

“I see this very clearly as a great jobs initiative, something we very much need right now, and a way to really facilitate a great craft, the craft brewing of beer in the state of Minnesota,” Loon said.

Ansari told the House Commerce and Regulatory Reform Committee April 13 he plans to build a $20 million facility to accommodate his expanding business, which has grown from 1,600 kegs sold in 2006 — its first year of operation — to 24,000 last year. He would like to open a taproom, restaurant, beer garden and event center. He projects 85 construction jobs and about 150 permanent jobs would be created in the process, and that he’d eventually make about 150,000 barrels of Surly varieties annually.

“We are not asking for any tax breaks or public subsidies, only the necessary changes in the licensing law,” Ansari said.

In a business where word-of-mouth helps boost consumer demand, such onsite sales can be like liquid gold to start-up breweries that can generate much needed cash flow, not to mention brand awareness, for their product. The taproom license would be limited to brewers making fewer than 250,000 barrels of beer annually.

The committee laid the bill over for possible inclusion in an omnibus liquor bill. Sen. Linda Scheid (DFL-Brooklyn Park) sponsors a companion, SF416, which awaits action by the full Senate.

The bill could eventually boost beer tourism, said supporters, including Ryan Petz, founder of Fulton Brewing Company, which started in a south Minneapolis garage and is now building a brewery downtown. He said states such as Oregon, Colorado, Washington and California with laws allowing similar business activity have experienced significant industry growth.

A range of companies could benefit from little Lift Bridge Brewing Company, which CEO Dan Schwarz said produced about 3,000 barrels last year and is building a new facility in Stillwater, to local household names such as Summit Brewing Company of St. Paul and New Ulm’s August Schell Brewing Company. Summit produced 98,000 barrels and Schell’s, 92,000 barrels last year, according to Allyson Hartle, a lobbyist representing those breweries.

Minnesota’s resurging craft brewing tradition mirrors that across the country. Nationally, 1,753 breweries operated for some or all of 2010, the highest total since the late 1800s, according to the Brewers Association, a national group. The number of U.S. craft brewers grew from eight in 1980 to 537 in 1994 to over 1,600 in 2010, according to the association.

Although the Minnesota Licensed Beverage Association has opposed proposals to allow taproom licenses in the past, they are “more comfortable” with the current bill, said Joe Bagnoli, a lobbyist for the association and the Minnesota Manufactured Beverage Association. He said they are pleased there is a cap on the size of brewers who can have a taproom, that those eligible are limited to one taproom, and that they must comply with all alcoholic beverage regulations.

“This is not an attempt to tear down the three-tier system,” Loon said, referring to the makers, distributors and retailers of alcoholic beverages.

A burgeoning beer business could also tap other segments of the local economy, say brewers.

Schwarz recently visited DCI, Inc., a St. Cloud manufacturer of stainless steel storage and processing tanks, including fermenters used in brewing beer. Because of a 28-week waiting period on orders, he had not decided whether to buy locally in that case, but Lift Bridge sources locally when possible. For example, the company buys malt from Rahr Malting, a family-owned business in Shakopee since 1847, and hired union trade workers for a construction project to install three fermenter tanks.

Scott Pampuch, owner of Corner Table, a Minneapolis restaurant, said what is being proposed makes him “technically” the microbreweries’ competitor, but that as an entrepreneur himself, he fully supports the bill.

“In our business environment right now we want to do everything we can to encourage business. … We want to encourage the possibility of people succeeding and lifting themselves up and running their own business.”

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