Bill could raise production for Montana craft beer industry


MISSOULA, Mont. - Montana lawmakers will hear arguments on a bill that could change the way Montana breweries conduct business.

House Bill 541 would redefine the definition of "small brewery" and allow Montana brewers to produce up to 60,000 barrels of beer a year. The current law only allows breweries to produce 10,000 barrels a year.

The bill would also allow breweries to sell beer in their taprooms. Small breweries are only allowed to sell a certain number of drinks, and larger breweries are only allowed to provide "tastes."

"Right now, if you're over 10,000 barrels -- that's 20,000 kegs or 140,000 cases of beer -- you can't sell for on-premise consumption. That means we've been giving away 800 or 900 kegs a year. That's over $4 million worth of beer we've given to people," said Big Sky Brewing Company co-owner Neal Leathers.

State Rep. Ellie Hill (D-Missoula) co-authored the bill with State Rep. Adam Hertz (D-Missoula). Hill says state lawmakers first created rules and regulations for local breweries more than 20 years ago when breweries first began gaining popularity. The rules determined how local beer would be produced, sold and distributed.

Hill says those laws have seldom been updated, and the craft beer industry has increased tenfold. The Montana Brewers Association says there are over 50 breweries in the state today. They say craft breweries have increased 87 percent since 2010.

Hill says the "archaic" laws are posing a problem for large-scale breweries and breweries that want to grow across Montana. She wants to update the laws to account for today's demand.

Big Sky, Bayern Brewing Company and Kettlehouse Brewing Company are just three of several breweries across Montana that produce and sell their beer on a national scale.

Hertz says Bayern Brewing Company shuts down its distribution altogether, aside from their taproom, after they distribute 10,000 barrels of beer.

Leathers says the current laws are also difficult for smaller breweries like Draught Works, which is looking to expand. He says business would be much more profitable if they could sell beer at their taprooms.

"It's something to think about. If that limit wasn't there, or was higher, you could grow your business the way you want to, instead of having the government say, 'Up until here you're OK, but now you have to make a decision that's not very good for your business,'" Leathers added.

Others see it differently. State Rep. Dennis Lenz (R-Billings) voted no on the bill in its first two readings in the House.

"Ultimately I always find that alcohol (matters) grow without my help," Lenz said.

Lenz says State Rep. Wendy McKamey's (R-Great Falls) message about alcoholism in her family spoke to him. NBC Montana reached out to her for further comment but did not hear back.

Leathers, Hill and Hertz says the bill would also help the Montana economy.

"All that beer that we're giving away, we'd be selling. There would immediately be taxes on that beer, and we would be hiring more people, so that's more jobs," Leathers added. "Anything that's going to help breweries is going to help barley growers; it's going to help anybody that's providing raw materials grown in Montana."

The bill passed its first two Hhouse readings in a vote of 85-14-1. Hertz says he is presenting the bill to the Senate Business and Labor Committee Wednesday morning. He says the Senate should vote on it some time next week.