Ethical/moral dilemma on "beer brewing research grant"

[Revvy]

Wow...didn't think the response to this initial question would be that large.

Yeah it is more a legal issue, really than an ethical one. The law is pretty explicit, ANY medium of exchange is illegal under the FEDERAL law that re-legalized homebrewing 40 years after prohibition was repealed.

Homebrewing and money is such a sticky situation, homebrewing and the law is a sticky situation. I mean it's still illegal in Alabama, and Utah only legalized it a couple years ago. And even a lot of state laws are screwed up in terms of if you legally can enter contests, or even drive your beer to a public place for a homebrew club meeting. Or if you can hold a homebrew contest in a bar where legal and taxed alcohol is sold (these are all actually issues that have come up over the last few years in this hobby. You can find news stories about all of these on this site.)

Technically you might be crossing a legal line if you then gave them beer made with the ingredients- maybe not if you served them a beer in a social situation, but if you dropped of a sixer of each batch to them. One could say there was an illegal monetary exchange for that beer.

Whether or not it would be legally pursued is another matter, but I'm always uncomfortable even with folks discussing this online, you really don't know what or who's watching the largest hobby alcohol producing website on the planet at any given time. Or if there's keyword bots looking for conversations like this.

Personally I staunchly avoid any situation like this. If anyone asks or offers me money, I simply thank them but say it's illegal.

For me it's about respecting the battle that was fought to get the hobby legalized and about how much this hobby is misunderstood by many folks as someting quasi legal or dangerous anyway. So I tend to step lightly around this.

 

[WhiskeyR]

Don't give it way then. No one's forcing you to do anything.

You guys that charge for your beer (or "accept tips") better accept that you're selling it. Seems like there's a lot of guilt among you.

If you want to sell it, I'm all for it, but quit with the weird "skirting around the issue" thing. If you accept money for it, you are selling it. I'm not getting legal here, just calling a spade a spade.

Kind of a good point here. Next time you're at the bar, just have your friends buy you some beers instead if you feel guilty. Gesture for gesture.

 

[SpanishCastleAle]

I agree with passedpawn and Revvy. I'm no attorney and don't play one on TV. But imo, if you receive anything, even the guy buying you beers at a bar or him cutting your grass or claiming to give you a 'baby shower' gift, in exchange for homebrew it's technically a sale and; in my estimation, illegal. The fact that you receive your 'gift' well after you've given them the beer seems irrelevant. Regarding the 'intent'; of course there was intent, the guy was repaying you for a bunch of beer. It really isn't just a river in Egypt. Very difficult to prove there was intent it would seem though.

It's only a slight moral/ethical issue and tilts in the other direction of the law imo, he wants to rightfully repay you for the beer. His ethics/morals dictate to him that it's the right thing to do. It just seems that it's 'technically' illegal.

That said, I agree that it will in all likelihood go completely unnoticed. I just tend to take Revvy's route and never, ever, ever take ANYTHING for my beer.

 

[Homercidal]

Definitely a legal grey area.

First, you are NOT allowed to accept ANY form of recompense for homebrew.
Second, simply giving your beer to someone MAY have broken a state law. You'll have to look up your state's law regarding the issue of gifting your beer.

But REALLY it comes down to "WHAT WERE YOU THINKING"? It's a cash exchange between friends! Heck, it's my opinion that they weren't even paying you for your beer, right? It was probably for that good advice you gave them that one time. Or maybe for the thing your wife knitted them. I don't know, but it was positively for ANYTHING other than for your homebrew!

I'm allowed to gift 20 gallons to my friends or whoever I want to. Per year. And I am very careful not to go over that

But if we are being honest, I'll admit I don't always claim my computer repair side jobs to the IRS... But I do use that money to contribute to the local economy, and sometimes the economy near Northern Brewer, or Austin Homebrew, or Midwest Supplies.... etc.

 

[luke2080]

Just like the legal grey area with prostitution.

*Sex is fine if you just give it away.
*If someone charges you for it, all of a sudden you are a prostitute.
*If you are wined and dined, and given a couple of "gifts", technically you are not a prostitute, even if you are totally a prostitute.

 

[crackhead7]

I would have to agree with Revvy, that it is most important to preserve our craft and not establish any impropriety. Taking donations, purchasing ingrediaents, and such treads the line, I personally just rather trade gestures of hospitality. Interesting that this topic has generated such an interest, however I see this as a very common issue for many home brewers. I have often been propositioned to produce beer for others and always respectfully decline due to the legality, unless I am planning on gifting it to them.

 

[ReverseApacheMaster]

There's a lot of bad information floating around on the subject -- some of it in this thread. I think we've all beat the subject to death. People are either going to engage in quiet transactions that nobody is particularly concerned about and others won't. Nobody's opinion gets changed.

 

[Revvy]

I'm allowed to gift 20 gallons to my friends or whoever I want to. Per year. And I am very careful not to go over that

That's on the Michigan statute? I didn't know.

 

[Phunhog]

I really think we can split hairs forever on this matter. Technically speaking if you trade me one of your homebrewed beers for one of mine that is illegal. I am getting something of "value" for my beer and that is illegal. HBT though has a whole subforum dedicated to this practice (gasp!) The reality is that no one really cares. It is almost on a level of "crazy laws" like can't chew gum and walk backwards on Sundays in South Carolina. I made that up btw...but you get the idea. I do want to thank the Mods for not locking up this thread!! It usually happens when we discuss "this topic".

 

[billf2112]

You give them beer gifts, he gave you $$$$ gifts. Not an issue, he just appreciates your gifts and wants to help pay for the cost you endure, not the beer.

Even if he came to you and offered you money to brew a beer, it would not be buying beer but buying the supplies.

 

[Homercidal]

That's on the Michigan statute? I didn't know.

Quote from the AHA on Michigan statutes:

(c) The gift to an individual for noncommercial use or consumption of up to 20 gallons of beer, wine, mead, honey-based beer, or cider produced under the circumstances described in subdivision (b). This subdivision does not allow a person less than 21 years of age to possess, receive as a gift, or give beer, wine, mead, honey-based beer, or cider produced under the circumstances described in subdivision (b).

And the wording indicates that it's 20 gallons TO EACH RECIPIENT! =8D

I really think we can split hairs forever on this matter. Technically speaking if you trade me one of your homebrewed beers for one of mine that is illegal. I am getting something of "value" for my beer and that is illegal. HBT though has a whole subforum dedicated to this practice (gasp!) The reality is that no one really cares. It is almost on a level of "crazy laws" like can't chew gum and walk backwards on Sundays in South Carolina. I made that up btw...but you get the idea. I do want to thank the Mods for not locking up this thread!! It usually happens when we discuss "this topic".

I agree that trading beers is technically illegal. But we could "gift" each other beer, right? (depending on individual state laws...)

You give them beer gifts, he gave you $$$$ gifts. Not an issue, he just appreciates your gifts and wants to help pay for the cost you endure, not the beer.

Even if he came to you and offered you money to brew a beer, it would not be buying beer but buying the supplies.

The only caveat is convincing the feds. Even exchanging goods for beer is illegal. The ingredients for making beer could be considered goods. As long as it could not be considered a "this for that" situation, you would be good. If there is any way that the feds could claim a "this for that" situation, it's illegal.

 

[monkeydan]

Aint a crime if you don't get caught.

Oh, thank goodness! I KNEW I wasn't really a rapist!

 

[Airborneguy]

Regarding the 'intent'; of course there was intent, the guy was repaying you for a bunch of beer.

I understand your point, but legally, that's not the case. Believe me, normally I am completely on Revvy's side, but this case is different in that the OP did not expect this gift at all, you can get that clearly from his post. That's key because it means that he obviously had no intent, and from how he described it, the neighbor willingly gave this gift in return for his kindness of gifts of beer. Believe me, I don't see "intent" as a flexible thing that can be hidden by trickery and "work arounds" like most of these threads try to suggest. If you put out a "tip" jar, your intent is to collect money for beer, voluntarily, but still clearly in exchange for the beer.

Second, simply giving your beer to someone MAY have broken a state law. You'll have to look up your state's law regarding the issue of gifting your beer.

This is a good point that can make this whole thing moot.

Just like the legal grey area with prostitution.

*Sex is fine if you just give it away.
*If someone charges you for it, all of a sudden you are a prostitute.
*If you are wined and dined, and given a couple of "gifts", technically you are not a prostitute, even if you are totally a prostitute.

As funny as this sounds, it is totally true. In the last case, one can have every intention of lavishing a high-class dinner on a woman just to get her into bed, BUT, the intention is not to buy sex, it is to get her to agree to have sex. Big difference. See how intent is arrived at by the legal system?

 

[Airborneguy]

I agree that trading beers is technically illegal. But we could "gift" each other beer, right? (depending on individual state laws...)

This is exactly the arrangement that the OP is involved in though, which you disagreed with. The concept is exactly the same legally and the product is exactly the same too! What's the difference?

Even exchanging goods for beer is illegal. The ingredients for making beer could be considered goods. As long as it could not be considered a "this for that" situation, you would be good. If there is any way that the feds could claim a "this for that" situation, it's illegal.

Here you explain it much better. Say we are both at the OP's house bearing 10lbs of malt each.

I hand my malt to him and say, "Thanks for the beer you gave me last night. I saw this at the store today and figured you could use it. Have a good day neighbor!"

You hand him yours and say, "Here's that malt we agreed upon. Got a twelve-pack?"

Only one of us committed a crime. Guess who?

 

[samc]

My swmbo says just take the money, say thank you and pour a cold one. She is an avid knitter and will make friends knitted items if they purchase the materials. I tried explaining that this is not the same as with making beer or wine.

Am I just making way too big of a deal about this (like she says I am)?

Forgetting any legal issues -been done to death IMO

Some people like to give others money and get insulted if you don't take it. Do as wife says.

 

[qbst]

For there to be a sale, there has to be intent. There's no intent here, not even implied. A sale does not have to have all the trappings of a normal purchase to be illegal, but in this case, without intent, there is no sale. Understand what I mean?

I would certainly check your state's laws as to this. In Florida, for example, the definition of "Sale" in no way includes any reference to intent. FSA 212.02(15)(d) is the relevant statute for consumables*, and it says that a sale is defined as:

"The furnishing, preparing, or serving for a consideration of any tangible personal property for consumption on or off the premises of the person furnishing, preparing, or serving such tangible personal property which includes the sale of meals or prepared food by an employer to his or her employees."


If property transferred and if there was consideration (the party receiving the beer gave you something in return), it is possible that an ATF agent or tax agent or whomever might construe it as a sale.


I'm not weighing in one way or the other as to whether you should accept the money. They didn't try to give it to me, so it's an SEP, as far as I'm concerned. I'm mainly suggesting that whether it might be considered a sale might depend on your state's laws.




Please note, the foregoing is not and should not be construed in any way as legal advice. The information provided was done so for informational purposes only. No attorney-client relationship was formed. Eat your veggies, drink your starch.



* 212.02(15) is technically (a)-(e). However, the other subsections are either (a) a general definition; or (b), (c), and (e), definitions aimed at more specific acts not germane to this discussion.

 

[Phunhog]

The interesting part about this discussion is that, as far as I know, there is NO legal precedents. I have yet to hear of a homebrewer arrested, cited, fined, etc....for anything connected to homebrewing. Except for a guy in Alabama who also had a still and a guy in CA who was putting opium poppies in his homebrew which are obviously illegal. Let's face it....the authorities don't really care. I recently talked to an ABC agent about giving away homebrew. She gave me the "legal" side....it is forbidden. Then she gave me the "truth"......we don't care and we have more important things to do.

 

[passedpawn]

To be honest, I'd prefer a helping hand on brew-day more than anything else. Or bottling day for when I bottle.

Absolutely. Help bottling would be a godsend.

 

[Homercidal]

This is exactly the arrangement that the OP is involved in though, which you disagreed with. The concept is exactly the same legally and the product is exactly the same too! What's the difference?

That's the point I'm trying to make. It's all about the wording in this case, since we are legally allowed (depending on state statutes) to gift to each other some Homebrew.

Here you explain it much better. Say we are both at the OP's house bearing 10lbs of malt each.

I hand my malt to him and say, "Thanks for the beer you gave me last night. I saw this at the store today and figured you could use it. Have a good day neighbor!"

You hand him yours and say, "Here's that malt we agreed upon. Got a twelve-pack?"

Only one of us committed a crime. Guess who?

Well, both, since the feds aren't going to care what wording you use. If they can interpret the exchange of grain for beer, they will press their case.

ACTUALLY, this whole thing is silly to me, since nobody cares if a few homebrewers give their beer away, or sell a little bit to friends, or whatever. I mean NOBODY! (unless you consider the people who are against beer in principal, and they don't count

It's the people who are selling hundreds of gallons and running a nano brewery who the feds may be interested in. The right and wrong according to law is simply an exercise I enjoy thinking about.

I don't brew enough, or give enough away (yet) for it to be a problem for me. I've never "sold" a beer in any way, and am nowhere near scratching my 20 gallons of gifts. As close as I've come is a guy at work who liked my American Stout so much that he wanted to pay me to make a whole batch. I'm gladly willing to gift the batch to him and his wife.

 

[Revvy]

ACTUALLY, this whole thing is silly to me, since nobody cares if a few homebrewers give their beer away, or sell a little bit to friends, or whatever. I mean NOBODY! (unless you consider the people who are against beer in principal, and they don't count

It's the people who are selling hundreds of gallons and running a nano brewery who the feds may be interested in. The right and wrong according to law is simply an exercise I enjoy thinking about.

Actually another group cares whether or not homebewers sell their beer or not, the brewing industry. I'll bet you dollars to donuts, that if a large amount of homebrewers started doing it, the big guys would be all over us in a heartbeat.

And don't think it's just BMC that would (and probably is) trying to stop us, but craft breweries as well. That's why we'll never be able to sell at farmer's markets, like some folks seem to think we should. We've talked about that before.

...if this law really permitted homebrewers to sell beer -- and I do not believe that would be the effect of the law -- national and regional breweries would get up in there and kill the bill quickly. It's one thing to have to compete with identifiable small breweries that can only sell through specific venues. It's another to try to compete with an unidentifiable set of competitors that can sell anywhere at a significantly lower price because there's no advertising or distribution costs. Homebrewers will never be allowed to sell their beer without going professional.

S
I mean really, does anyone think that this would ever happen? That someone would even float a bill on making the sale of HB legal? Does anyone not think that one of the largest parts of the alcohol lobby is going to be made up of BMC representatives, who are already constantly at work making it somewhat difficult for the CRAFT BEER industry to easily operate, let alone allow FURTHER cutting in of their profit by a bunch of pissant homebrewers with stars in their eyes? Come on, haven't you ever wondered why it even took homebrewing of beer 40 years AFTER the repeal of the volestead act to be legalized? You don't think there was a little backroom finelagaling going on back then? You think they want us selling our homebrew even at the farmer's market? Come on folks....I don't believe in the vast bmc conspirary as promoted by Beer Wars, but I do have a little idea about politics and business.

Lets not be presumptuous about how magnanimous craft beer would be. They would also want to crush it.

 

[doctorRobert]

People should have better things to do than care if somebody maybe possibly gave you some cash for beer.

That's too little money.


Just like with all things illegal, the way to get in trouble is to mess up on your taxes. But $200 isn't even enough for the IRS to even kick the wheels.

 

[Homercidal]

Actually another group cares whether or not homebewers sell their beer or not, the brewing industry. I'll bet you dollars to donuts, that if a large amount of homebrewers started doing it, the big guys would be all over us in a heartbeat.

And don't think it's just BMC that would (and probably is) trying to stop us, but craft breweries as well. That's why we'll never be able to sell at farmer's markets, like some folks seem to think we should. We've talked about that before.

Yeah, you're right. But I know a lot of brewers who support homebrewing and recognize that homebrewers are more likely to spend more $$ on craft beer than pretty much everyone else.

Yet I bet most of those guys would be against allowing even a limited amount of homebrew to be sold, such as the farmers market principal.

And the triple irony is that I would BET MONEY that most of those guys probably took a few dollars for their efforts before they went pro.

I can see their point. It's like saying you can't sing the blue until you've lived them. Gotta pay your dues.

 

[cockybitz]

1. spend the money on equipment.
2. Next time they are over thank them for the XXXXXX.
3. Enjoy a homebrew.

See, no exchange for beer. Just a gift. I mean, who doesn't need an extra freezer, or a turkey fryer, or an extra corny keg?

 

[Phunhog]

Revvy is right on with this one. The brewing industry, including micros, does not want competition. Especially competition that doesn't have to jump through all hoops and red tape that they have to deal with. There is certainly nothing immoral or unethical about homebrewers selling beer. It is against the law purely for political reasons. Just look how hard it is to start a legal micro in some states.

 

[FromZwolle]

Yeah, you're right. But I know a lot of brewers who support homebrewing and recognize that homebrewers are more likely to spend more $$ on craft beer than pretty much everyone else.

Yet I bet most of those guys would be against allowing even a limited amount of homebrew to be sold, such as the farmers market principal.

And the triple irony is that I would BET MONEY that most of those guys probably took a few dollars for their efforts before they went pro.

I can see their point. It's like saying you can't sing the blue until you've lived them. Gotta pay your dues.

it would be super neat to be able to barter with homebrew at farmers markets. there's usually some good cheeses and a decent Q stand at the ones in my area. it'll never happen, but it would be cool.

 

[Homercidal]

it would be super neat to be able to barter with homebrew at farmers markets. there's usually some good cheeses and a decent Q stand at the ones in my area. it'll never happen, but it would be cool.

Yeah, I would totally be down with that! Starting to make hard cheese now, and some no-knead bread. I could see myself getting fat by hanging out at the Farmer's Market!

 

[MazdaMatt]

There's little in this world that I appreciate more than appreciation.

In that spirit, I'd take that 200, buy a regulator, a keg, a paintball CO2 tank and a picnic tap, a grain bill of his favorite beer, fill up the keg and deliver the whole setup and say "thanks for your appreciation of my homebrew".

edit - ps, you'd be a retard if you listed it on your taxes. Geez.

 

[Spartan1979]

I'd be more worried about taking the money, making you a professional brewer and no longer able to enter amateur competitions.


j/k

 

[Phunhog]

Here is how I am dealing with the situation. I have made up some brewery t-shirts that I sell for a little bit of profit. The profit is enough that it covers the cost of making the beer. I even went so far as to contact my local ABC to make sure it is ok. They said that as long as I am not selling beer or using the t-shirts as a "ticket" then they don't care what I sell. There is a lot of love out there for homebrewers and I found out that people WILL support you. I have sold a lot of t-shirts to people who have never met me....let alone had my beer. They just want to support the "local" brewery and get a cool t-shirt.

 

[brewit2it]

My three thoughts.

1: They wrote the check. Either because of
A: They can afford it, and know what it takes to produce the beer you give them.
B: You whined about how much it costs for the beer you make and they feel guilty.
C: They think they're in your debt for all the beer you gave them, and want to repay 'somehow'
Only you know the actual case.

2: From their perspective. "Holy S! 8 CASES of hand-made craft beer for $200! WHOO HOOTERS!"

3: Cash it, and make a batch of beer in their honor, or name a batch for them (if you do that, make sure it's sneaky so other friends don't ask, "Why is this one's called Sam's brew? WTF did he do to deserve a beer named for him?") Or buy some equipment for the brewery and mention it next time they're over.


Personally, in the grand scheme of things, I wouldn't cash it. My friends can drink all the beer they want at my place, no charge, ever.

B

I agree, accept the check graciously so your friend gets the credit of the gift but then don't cash it. If he asks why you didn't cash it just tell him you really appreciate the thought but it is your choice and pleasure to share your beer so you wouldn't feel right about accepting payment.

 

[doctorRobert]

I think most of you are nuts. Cash the check. Youre not selling beer.

You need a permit to sell food. if you invite friends over for dinner, and they bring wine, do you not accept because it could be construed in some weird way to mean you exchanged food for wine, as if you sold it?

 

[Airborneguy]

Here is how I am dealing with the situation. I have made up some brewery t-shirts that I sell for a little bit of profit. The profit is enough that it covers the cost of making the beer. I even went so far as to contact my local ABC to make sure it is ok. They said that as long as I am not selling beer or using the t-shirts as a "ticket" then they don't care what I sell. There is a lot of love out there for homebrewers and I found out that people WILL support you. I have sold a lot of t-shirts to people who have never met me....let alone had my beer. They just want to support the "local" brewery and get a cool t-shirt.

One of the homebrewer booths at our local beerfest did that last year. They sold hats, glasses and stickers. If I remember correctly, at the end of the day they had sold almost everything. I got one of their stickers for free for being from another booth.

 

[ReverseApacheMaster]

I think most of you are nuts. Cash the check. Youre not selling beer.

You need a permit to sell food. if you invite friends over for dinner, and they bring wine, do you not accept because it could be construed in some weird way to mean you exchanged food for wine, as if you sold it?

The quid pro quo nature of the exchange is what matters. In your example, two people are bringing stuff and sharing it. It is not transactional. When an item is sold -- or bartered -- the buyer and seller do not communally enjoy the product. Each takes what they have obtained from the transaction to their exclusive benefit.

You can judge the situation with reasonableness. Is the money intended to be an exchange -- even an unintentional one -- for the beer? Maybe the gifting friends intended to give the money as a general thank you for letting them come over, use electricity, watch TV, eat food, sample homebrew, etc. In that case, it is likely to be an unrelated gift from one friend to another.

 

[msa8967]

There has never been any intent on my part when I give beer away to my friends and neighbors to expect anything in exchange for it. When I started giving away larger amounts of beer to my friends I explained that my motivation was/is:

1. There is no possible way I (and my wife) could drink all of the beer that I brew.
2. The act of brewing and learning about better brewing methods has done more for me than any psycho-therapy would ever be able to do. Plus the fact that it is much cheaper.
3. In my job as a teacher I do not produce a tangible/physical/tactile product that I can say I am proud of and measure my own sense of improvement with.

Their $200 grant/gift was very generous and in no possible way have I ever mentioned how expensive making the beer is. In fact, I have probably bragged a bit about how going all grain, washing yeast and doing a group grain purchase has brought the cost of my brewing down to under $15-20 per 5 gallons.

The last time I gave them beer (about 2 1/2 cases) was three weeks ago when we learned that my wife was expecting and thus most of the bottled beer needed to be given away before it turned to the darkside. They returned some bottles yesterday with a nice thank you card and this $200 check of appreciation which I never expected from anyone.

It is interesting to read some many different points of view on this topic, especially about not being able to sell home brew at farmer's markets.

 

[BlackJaqueJanaviac]

I would take it exactly at face value. As far as I know there is nothing illegal about a grant for researching brewing.

Using the money for anything other than research and self-improvement would be an insult to your friends. Just like using money given specifically to treat yourself to dinner would be insulting to use it to pay the electric bill.

I don't think the ATF can get your for accepting grant money you're not selling beer. The IRS might consider it "income" but $200 shouldn't kick you into another tax bracket.

I don't buy any of the "namby-pamby" or "it's only illegal when you get caught" stuff. That kind of thinking is Machiavellian and very bad.

So use the money to buy some brewing books, equipment, and if you use it to buy ingredients it should be for experimental purposes. To use the money to buy ingredients for an "old stand-by" recipe would not be appropriate (unless you're attempting to improve an old stand-by).

 

[luke2080]

3. In my job as a teacher I do not produce a tangible/physical/tactile product that I can say I am proud of and measure my own sense of improvement with.

Umm...maybe measure yourself via the grades of your kids? For instance "last year 4 dumb kids flunked out. This year only 2 did!"

 

[Rahahb]

How is this even an issue? Lol

RDWHAHB for real man. :cross:

 

[TomHanx]

yeah how did this turn into a 70 post thread? take the money. im not a lawyer but theres no law against giving friends money. i wish mine would be so generous and start paying for there share of "our" brews.

 

[THart]

Totally illegal in Iowa, as are most good things <(}>:{