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SB 604 has Passed! What this Means for Virginia Beer

on Mon, 03/05/2012 - 1:06pm

Minutes ago, Senate Bill 604 passed the Senate floor, and is on its way to Governor Bob McDonnell’s desk for signing. We've talked a bit about SB 604 recently via Facebook and Twitter, but if you haven't spoken with us directly, a 140 character tweet probably doesn't suffice to explain what the bill is all about, or what we think it means for us specifically, and for Virginia’s beer culture at large.

SB 604, introduced by Senator Jeffrey L. McWaters and Senator William M. Stanley Jr., gives brewery license holders permission to sell their beer for on-premise consumption where it is made. At present, Virginia breweries that do not have a full service restaurant (brewpubs) have been limited to offering free samples, and selling beer to go. The bill was amended once by a House sub-committee to specify that breweries can only sell brands they own (this law is currently in place for Virginia commercial breweries, so I believe the amendment just provided clarity to lawmakers), and ultimately passed the House floor on March 1, 2012 with 99 yeas and 0 nays, and the amended bill passed the Senate floor on March 5, 2012 with 38 yeas and 1 nay. The bill will go into effect on July 1, 2012. Read the full language of the bill here: http://lis.virginia.gov/cgi-bin/legp604.exe?121+ful+SB604

As brief background on the main group lobbying for the bill, the Virginia Craft Brewer’s Guild re-formed in 2011 as an affiliate organization with the long-standing Virginia Manufacturer's Association. Among the potential legislative priorities of the group was the ability to sell beer on-premise at non-brewpub (sans restaurant) breweries. When Senator McWaters submitted the bill for the 2012 legislative session, several members of the Virginia Craft Brewer’s Guild, including Devil’s Backbone, Starr Hill, Hardywood Park, Bull & Bones, O’Connor Brewing, Legend Brewing, and St. George Brewing, as well as some start-up breweries and local beer lovers, rallied together to lobby in support of this bill. Among the lobbying efforts included numerous visits to the General Assembly, scheduled visits to many delegates and senators, attendance and speaking at several sub-committee meetings, and a hospitality event for the General Assembly at Hardywood Park.

The ability to sell beer for on-premise consumption has worked extremely well as a way to enhance beer culture in other states, like neighboring North Carolina. As evidence, Ashville has been named “Beer City USA” three years straight, and has become a major tourist destination for an ever growing population of craft beer lovers. Further, North Carolina was selected as the location for Sierra Nevada’s east coast satellite brewery, and is a front-runner in New Belgium’s search for an east coast site. With more breweries from the western part of the country looking to expand to the east coast, more favorable beer laws will certainly make Virginia more competitive in attracting $20M - $100M+ expansion projects that will create a great deal of new jobs in a rapidly growing industry.

On the local level, SB 604 will also make it easier for much smaller breweries to launch and start growing. Given a lack of automation and significant labor inefficiencies, smaller breweries tend to create a great deal more jobs per unit of output than larger breweries. As a point of comparison, Hardywood hand-fills 60 bottles per hour with a team of five people. The mega-brewers fill 75,000 bottles an hour with the same or fewer people. In simple terms, small breweries like us have the potential to create 1,250 times as many jobs per unit of output.

For years, thanks to their successful lobbying efforts, Virginia’s wineries have been able to sell wine by the glass at their facilities. As a result, Virginia’s winery industry is thriving. Wineries in Virginia are generating substantial excise tax revenue, sales tax revenue, and property tax revenue for local municipalities and the Commonwealth of Virginia. Virginia wineries are creating jobs, they’re promoting responsible manufacturing, they’re fostering local agriculture, they’re attracting tourism, and they’re enhancing Virginia’s food and beverage culture to a level matched by few states. With the ability to sell glasses of beer, we hope and believe that Virginia’s breweries will make similar positive economic and cultural contributions.

At Hardywood, we see SB 604 as an opportunity to build our relationship with the community and with other local businesses, to make visits to our brewery more educational and engaging, to create more jobs and to increase our output through our distributor and retail partners more on par with demand. We may increase our visiting hours, but we still plan to close by 8PM at the latest. Our hope is to encourage greater traffic to local restaurants by encouraging more people to come out in Richmond in the early evening. We would like to offer occasional live music, and to become available as a host of private events. We would also like to release more pilot/test beers to the market for feedback on a regular basis. Certainly, with the additional opportunities SB 604 will create this July, there will be more work opportunities with Hardywood.

All in, we feel the passing of SB 604 will help pave the way for a very bright future for Virginia's craft breweries, and will enable Virginia’s beer scene to become truly world class. We extend our deepest gratitude to all who reached out in support of this bill.

Special thanks go to Mike Killelea, brewer at Legend and chairman of the Virginia Craft Brewers Guild, Brett Vassey, president and CEO of the Virginia Manufacturer’s Association, Alice and Olivia from the VMA, Jeff Smith IV and Jeff Smith III of the Smith Group, Inc., Curtis Coleburn with the Virginia ABC, Antonio Elias with Delegate Betsy Carr’s office, Jasen Eige from Governor McDonnell’s office, Steve Crandall with Devil’s Backbone, Mark Thompson with Starr Hill, and last but not least, my colleagues at Hardywood Park, Patrick Murtaugh and Brian Nelson.

Comments

Collins Huff's picture

this is great news for small business and Virginia's economy.
eric.mckay's picture

Thanks, Collins! We agree!
Patrick's picture

As the former lobbyist for the VA wine industry I'm glad to see the breweries finally got the same privliges. Great work!
eric.mckay's picture

Thanks for helping to pave a path for this opportunity, Patrick! To me, it seems Virginia wine culture has become the east coast leader, and I hope one day we can say the same for its beer culture!
Gayle Davies's picture

Does this mean that Starr Hill, a brewery I live < mile from and drink several of their beers every week, will now allow me to come have one on site? Sorry to have to extract this, but I've had enough Starr Hills this evening to render me unwilling to pay close enough attention to what this really means to me.
eric.mckay's picture

Hi Gayle, we worked closely with Mark Thompson from Starr Hill in lobbying for the passing of this bill, and I can assure you, they will offer beer for sale on site starting sometime (perhaps immediately) after July 1 when the law goes into effect.
steve's picture

Once the governor signs it how long do you estimate it will be until a brewery can take advantage of this ?
Antonio's picture

All laws take effect on July 1st after being signed, and the ABC has confirmed that they are ready to modify brewery licenses so that there is no delay in implementation. So expect to buy a pint at your favorite brewery on July 1 of this year!
eric.mckay's picture

Hi Steve, thanks for posting. To add to Antonio's follow up, Hardywood is working hard to make its tasting room area more inviting and comfortable for guests, and we plan to start offering glasses of beer for on-site enjoyment starting July 1, 2012.
Steve DB Brewing Co's picture

Hardywood guys you rock. Awsome event at your place on Tuesday. I wanted to thank you for hosting the event and I look forward to working with you guys in the future on other important issues facing the craft brewing movement in Virginia. Cheers
eric.mckay's picture

Thanks for taking us under your wing, Steve! I'm really excited to make the most of SB 604 and know that we couldn't have had this new privilege without your and Mark/Starr Hill's support, so thank you very much for that!
Eric's picture

I'm a little late to the party on this, but I have read the 604 bill and am trying to understand what passage of this can actually be interpreted into allowing breweries to sell their products on sight. The closest I found is "Such license may also authorize individuals holding a brewery license to (a) operate a facility designed for and utilized exclusively for the education of persons in the manufacture of beer, including sampling by such individuals of beer products, within a theme or amusement park located upon the premises occupied by such brewery" and also "offer samples of the brewery's products to individuals visiting the licensed premises." What do they mean by "samples" and "educational"? I know its a little off topic here but I'd love the clarification. Many thanks!

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