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Committee on Economic Development presents bill aimed to improve craft beer industry

CHARLESTON, W. Va. — The state legislature is looking to encourage the brewing craft beer industry in the Mountain State.

In a September interim session, lawmakers heard a presentation from the West Virginia Craft Brewers Guild –representing the interests of the 12 licensed craft breweries in the state/

The Joint Commission on Economic Development took the guild’s recommendations on how they could make the state more friendly to the industry and asked legal counsel to create a bill.

While the first draft presented during the committee’s meeting Tuesday couldn’t incorporate every recommendation, it was able to include one of the major complaints craft brewers had in the licensing.

Currently, there are two types of licenses to those who brew in the state, one for resident brewers and one for foreign corporation brewers.

Under this system, all breweries have to pay the same fee. From the big corporations to the microbreweries like the one potentially about to be started in Shepherdstown.

“That’s a three barrel system, he brews six kegs at a time. To do that, he has to buy a resident brewers license for $1,500 and a brewpub license for $1,000, so $2,500,” Brian Arnett, president of the Craft Brewers Guild said. “You have to sell a lot of beer to make a profit on beer at that small scale.”

In the proposed draft, the fee would change based on production, requiring breweries to provide an estimate of how much beer they will produce when applying for the license. For those producing over 20,000 barrels –at 31 gallons per barrel– per year, the fee would remain $1,500. For those producing between 6,000 and 20,000 barrels per year, the fee would be $1,000. For the small operations producing less than 6,000 barrels per year, the fee would be $600. If the company produced more than estimated and reclassified, they would have to pay the difference on the next license.

The license for breweries wishing to sell their beer on site, known as brewpubs, the fee would now be $400, thereby making the total cost for a microbrewery producing less than 6,000 barrels per year and selling the product on site $1,000 dollars in licensing.

There would be some lost revenue for the state by changing the license fee, but Arnett says it would be made up encouraging more breweries to be created.

“If a lot of people start a lot of nanobreweries all across the state, I think you’re looking tax revenue generation, a tourism generation. If you did a real study on that, I think you’d find out you can make more money from reducing these fees so the small people can afford it.”

Representatives from the state Alcoholic Beverages Control Administration had no problem with the goal of this part of the potential legislation but did have concern with the method of creating only on license for all breweries.

“I know that under the Supreme Court cases, we’re supposed to treat each party similarly or the same, but at the same time they have different functions,” Anoop Bhasin, general counsel with the ABCA said. “If a big brewer wanted to come here and set up shop, they would have some of these privileges of a resident brewer. I would probably still leave it as a separate license.”

All parties agreed that since this was only a first draft, there would be plenty of time to reach an agreement on what would be the best way to achieve the goal of encouraging more breweries to open in the Mountain State.

Another major provision in the draft dealt with how breweries would be permitted to distribute their product.

Under current law, brewers are not permit tasting parties in which they allow potential customers to sample their product for free. The new law would allow them to do hold such event, providing four flavors or brands at a time and to do so without have to apply for an application like Class A liquor retails must do.

Another provision would allow for the sale and refilling of growlers, 64 oz glass or ceramic jugs, on site for in-state breweries that do not already have a brewpub license.

Many of the measures addressing the concerns of the guild included and not included in the first draft are still in the works. As was said many times during the committee’s meeting Tuesday, the bill needs to be adjusted.

However, as chair Bob Williams (D-Taylor) said, they are working to hopefully facilitate small businesses as they open their doors –and taps– in West Virginia.

“We hope to be able to make some baby steps along the way to improve the opportunities for your business and we’re going to continue to work on this.”

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