Great article from Tom Scheck at MPR, A Brew Ha Ha over proposed brewery?
Update: Here’s a response from Frank Ball, with the Minnesota Licensed Beverage Association:
It’s pretty simple within the parameters of the three-tier structure we have in Minnesota. The manufactures make the product, the wholesalers distribute the product and we, the retailers, sell the product to the consumer. It’s even more simple if you say it the way my retailers say it: “you make it, we’ll sell it”…you make it ‘and’ sell it, we won’t buy from you”.The reason for the three-tier structure was to keep the integrity of the distribution of a controlled, highly regulated, commodity. Alcohol — like prescription drugs or firearms — is no ordinary commodity. In fact, alcoholic beverages are the only commercial products specifically named in the United States Constitution. Because our society recognizes the importance of controlling alcohol use and access, alcohol has always been treated differently under the law than most other products.
The manufacturers (breweries, vineyards and distilleries) supply distributors. Under the laws which created the three-tier system, each level of the system is independent of the others, ensuring accountability to the public as well as the benefits of healthy competition. By preventing tied houses (i.e. Retailers that sell the products of only one supplier), the three-tier system limits the number of retail outlets and therefore promotes moderate consumption, hence our position with the Surly matter. We want the Surly product to sell in our stores, we don’t want the manufacturer of a great beer to sell to the public, we’ll do that enthusiastically as possible.
Personally, I see “you make it, we’ll sell it”…you make it ‘and’ sell it, we won’t buy from you”. as unfortunate. Certainly these retailers don’t need Surly to stay afloat, though I wonder whether you’d actually see an all-out boycot of Surly products by MLBA retailers should the law get changed. Would you dump a product that sells well & that your customers ask for? “You don’t sell it, I can’t buy it from you… I’ll have to go somewhere else.”
Mob mentality at it’s finest. So ridiculous.
“…we don’t want the manufacturer of a great beer to sell to the public.”
Basically, “we don’t want to be cut out of the deal.” “We don’t care about what the public wants, we want our money.” Hey, it’s capitalism, I guess. But let’s be honest, it’s got nothing to do with the three-tiered system or ensuring accountability. It has to do with the MLBA members’ bottom line.
Funny that it works just fine in many other states.
I find it hard to believe that if this gets passed, the mlba or whoever will stop selling surly. Seems like he’s afraid of a lil’ competition.
Also love how he brings up the constitution for seemingly no real reason.
This is not going to be an easy thing for Surly to tackle. We need a grass roots invasion here along with the lobbying power. We can’t sit here and hope that everything works out. The MLBA has the power but we have the numbers. I don’t want to sound all preachy but I have a sneaky feeling that if we don’t get very involved Evil will prevail.
VIVA SURLY NATION!
Odd approach to supporting a growing business in Minnesota. I wonder if this guy is really speaking for everyone he represents. If you look at Stone in California, Red Hook in Seattle and NH, Goose Island in Chicago and other Large Breweries out of state they have extremely successful on premise Brew Pubs and they still utilize distributors to sell the majority of their beer. I think distributors are very important and I believe in the system he is describing for getting beer to the public through stores and other outlets. I don’t think Surly opening a brew pub at their new brewery overall will hurt anyone. Look at the size difference of the current and proposed brewery, unless I am missing something this will create more jobs for Minnesota and elsewhere. Surly will end up needing to utilize distributors here in Minnesota more as their volume increases as well as distributors in other states to get their beer out to more and more people. Maybe I am missing something here.
-T
The whole three tier distribution dates back to the laws written immediately after prohibition ended in order to appease as many people as possible. Times have changed since the early 1900’s, even if the laws haven’t. It is time to change the laws and stop protecting the middle man.
I guess I just don’t understand this argument. The three tier system isn’t just going to disappear because Surly (and other breweries, which would also be awesome) gets to have a Brew Pub Restaurant & Beer Garden on their premise. People are still going to buy Surly from Liquor Stores. If anything, everyone should be thinking about the beer tourism aspect, which would be great for everyone in the industry. Minnesota is already on the map for our beer, why not make it one of the places in the country people come to specifically because of our beer. And, as Ben said, it does work perfectly fine in other states. We’re just a little behind the times.
The MLBA should have taken more time to respond if they were really opposed. This response includes absolutely nothing that would convince anyone to be against the repeal of this old law. It makes them sound like a racket.
Brew pubs can sell a certain amount over the counter and breweries that produce under a certain amount of barrels can sell direct to consumers already. Only when a brewery is successful can it no longer sell direct. That sure does not sound like its for the public’s safety. Sounds like greed to me. The three tier system was made to prevent the brewery owned houses of ill despair where much more than beer drinking was going on pre-prohibition. I think we are far from those days and no longer need the 3 tier system. Let capitalism and freedom ring.
Unfortunately, arguing about these issues on a blog will not help us. I’m trying not to come off as a dick, and I apologize if I do, but if we want this to happen we need to actually do something aside from complain on a blog.
Start sending letters to your reps, senators, and house members; it is their job to represent us, regardless of your political affiliation! They need to know their constituents want these antiquated laws to be changed to allow more freedom for businesses to grow, and to show the rest of the country that we can be just as good of a beer-centric tourist destination as California, Oregon, or Colorado, if not better.
If the MLBA is saying things that are grossly inaccurate, or just plain insane, then people need to hear about it. Write an Opinion article for the Strib, or Pioneer Press, and see if we can educate the masses to how this is actually hurting innovation and business, rather than helping. If all the masses read are statements from the MLBA, and nothing from us, we lose possible allies.
We want it, we’re passionate about it, therefore we should do something about it. Get off your arses and start writing letters, start up petitions, start movements, whatever! If our voices are only heard in forums and blog postings, instead of in the chamber rooms of lawmakers and legislators, or offices of lawyers, then we will get nowhere.
There’s room for compromise here:
The law could disallow onsite off-sale purchases at the brewery, or (as is my pinko lefty preference) attach a higher state tax to off-sale brewery purchases. That covers the liquor store sales aspect.
And this “destination brewpub” isn’t really any greater competition with regional restaurants/distributors here than any other restaurant would be. Unless Surly decides to stop distributing kegs to other restaurants, which would be insane. and dumb. They’d never do that.
how bout a brewpub and restuarant off the premsies of the main brewery… a lot over, or down the block and around the corner… renovate the old place into the brewpub… anyway, hope it works out, Omar
The MLBA has done a lot for Minnesota, check out their legislative accomplishments:
http://www.mlba.com/membership.htm
Paul: 6 accomplishments in 59 years. Wow, well done MLBA. I make more accomplishments than that in the bathroom each morning.
I was being a little smug when I posted that link. However, notice that keeping wine and beer out of grocery stores is their first accomplishment; and it even includes an exclamation point.
They are a lobbyist group representing their members: anyone who deals in licensed beverages (alcohol). Between their membership and those non-members whose interests they represent, they have a lot of power and capital to influence the state legislature. It will be incredibly difficult to change any law without their help.
As mattm states above, compromise is key here. If the bill is worded to allow Surly to expand as they propose without threatening the three tier system, it might be acceptable to the MLBA. If the breweries who will benefit from the bill, and even the MN Craft Brewers Guild, were to support the MLBA’s desire to keep wine and beer out of grocery stores they will definitely have an easier time.
A grassroots campaign is going to be important, but hopefully will be properly focussed. Need to show support from voters/constituents from all over the state. Not just surly supporters since the bill is not going to have their name on it.
Charlie Papazian has weighed in on the issue too.
http://exm.nr/hGwXSn
This Beer, Wine & Spirits Distributors sheet on the benefits of the three-tier system is pretty laughable. If they’re to be believed, they control dangerous alcohol so well that there is no alcoholism, drunk driving and under age drinking in society thanks to them. Must be nice to live in their world.
http://www.mndistributors.com/cm/pdfs/12-08%20Three-tier%20fact%20sheet.pdf
dihydrogen monoxide is right, and to add, the MLBA is about to find out how passionate Surly fans and craft beer fans are about our state’s beer. Beer is part of our history and identity as Minnesotans and we are not going to let some unnecessary three-tier structure stop an organic, growing craft beer movement. When pressed to validate their positions, the MLBA only uses hollow general terms and leans on the false idea that “its the right way because we’ve always done it that way” Time’s are chaning, 2011 is our year, Cry Booze Freedom!
Here’s one “liquor store” owner that has no problem with Surly’s plans. I cannot understand how any liquor store owner would seriously see this as a threat to his/her business. This kind of thing is the tide that will raise all ships. More people exposed to Surly, more people to buy it from liquor stores, more customers for all of us. I will certainly be emailing my representatives and letting them know how I feel on the subject. It’s time to bring MN liquor laws out of the dark ages!
The MLBA’s views certainly do not reflect my own and I’m willing to bet there’s a new generation of progressive liquor store owners just around the corner. MLBA’s reach will grow smaller eventually, times are a changing! Alvey. The Four Firkins.
“This kind of thing is the tide that will raise all ships. More people exposed to Surly, more people to buy it from liquor stores, more customers for all of us.”
Now that makes sense. Don’t think anyone will be able to buy cans to take home from the new brewery right? Plus, if you come down to the brewery on a sat, and live outside of the metro, you’re still going to go to your local shop to buy the beer.
frank ball should be ashamed. What a bunch of hand waving BS.
his precious three tiered system does what?
helps “integrity of the distribution” and ” ensuring accountability to the public?”
and “promotes moderation?” WTF?
At least he’s honest with the last line, “we don’t want the manufacturer of a great beer to sell to the public, we’ll do that.” should have simply said “we want to remain the middle man in the loop because we get a cut, and we want our cut”
quite pathetic, and the utter absurdity of his “argument” makes me want to get involved to change things even more.