Creating a Brew Group, what things to consider

[smrtpunk]

Good day all,

I have been home brewing for somewhere in the neighborhood of 10 years. During this time I have evolved greatly from the can kits all the way to a 10 Gal electric setup.

Also during this time, I've managed to grab together a few neighbors/family that are interested in the process and like to show up when I'm brewing.

As brewing is always better with friends, I'd like to form some sort of collective group where everyone can get a portion of the beer for themselves.

The benefit for me would be people would show up perform some of the work and lessen the load for me. The benefit for them would be they get some craft beer at a fraction of the cost.

Having never done this sort of thing before, I was curious to know if anyone else has this sort of setup going and if so what are some idea's/guidelines I should be putting in place?

I was thinking of charging $20 on top of the cost of materials for a 5 gal carboy. I figure this should be able to cover the costs:

Electricity for brewing
Electricity for heating (I brew in my garage and heat with electricity)
Other utilities (hot water/lights/etc)

So each brew would yield $40 towards my expenses, what do you think? Should I be OK with this or is there any other things to think about?

Thanks,
Ian

 

[microbusbrewery]

My disclaimer, I'm not a lawyer and this isn't intended to be legal advice. I'm not sure what the homebrewing laws are in Canada, but in most states in the US this would be walking a fine line between legal and illegal at the very least, but most likely straight up illegal in the eyes of the law. It's one thing to have everyone go dutch on ingredients for a group brew, but if they're kicking in anything more than exact actual costs, you're essentially running an unlicensed brewery out of your home. Or it might be considered an unlicensed brew-on-premises activity in the eyes of the law; also questionable. I think the problem is accurate accounting; if you got caught you'd have to be able to show that everyone only kicked in a portion to cover actual expenses. You might be able to talk your way around it or use a loophole. For example, there aren't usually any restrictions on wort production. Essentially you're just producing a sugary solution. So assuming everyone took a carboy home with them and didn't pitch yeast until they were home, you guys aren't technically producing beer...that might be a loophole. That's a pretty common scenario at homebrew rallies and I've never heard of breweries getting in trouble for that kind of thing. It probably depends on how reasonable your local law enforcement, elected officials and bureaucrats are and how they interpret your intent with these activities. Here in Utah, I wouldn't touch it with a ten foot pole because the powers that be are always looking for an excuse to make an example out of someone.

 

[smrtpunk]

Wow, I never even thought of the legalities. Thanks microbusbrewery! I think I'll propose like you mentioned, to have everyone bring home their wort and ferment it out at their own houses.

 

[TheMadKing]

Just have them pitch in for ingredients and gas and then give them beer for free, there's nothing wrong with that!

Another option is to form an official brew club where you charge dues, and the dues are contributed toward ingredients and brewing instruction. You would need a separate bank account for the brew club and you couldn't co-mingle the club funds with your personal funds, but you could essentially brew for free that way. Plus you could attract other local brewers and teach a few people about the process.

 

[SGTSparty]

Question for those who may know more than I do: What if he changed the concept of what is being paid for? Instead of paying for ingredients (which is legal), or ingredients plus overhead (which has been suggested as illegal), what if he just simply called it an expo/demo/gathering and charged admission? As part of the event participants would be welcome to take home but not explicitly paying for swag in the form of brew?

You may still need to research what laws cover that type of event and if you could proctor one on your residential property.

 

[mongoose33]

Question for those who may know more than I do: What if he changed the concept of what is being paid for? Instead of paying for ingredients (which is legal), or ingredients plus overhead (which has been suggested as illegal), what if he just simply called it an expo/demo/gathering and charged admission? As part of the event participants would be welcome to take home but not explicitly paying for swag in the form of brew?

You may still need to research what laws cover that type of event and if you could proctor one on your residential property.

Charging for admission sounds like creating income; would that then create potential tax issues if someone wanted to make trouble?

The "going dutch" thing makes more sense to me. I'd be sure to charge not only the costs of ingredients, but electricity/propane, PBW, sanitizer, and other consumables like paper towels.

 

[smrtpunk]

going off topic, do any of you have experience moving around wort in a vehicle? I would be a bit concerned about spilling the load.

Ian

 

[TheMadKing]

going off topic, do any of you have experience moving around wort in a vehicle? I would be a bit concerned about spilling the load.



Ian

I've done it a couple times, I always make sure it's in a 5 gallon bucket with a tight lid, and I ratchet strap it in place and drive like I'm 93.

 

[dkwolf]

Charging for admission sounds like creating income; would that then create potential tax issues if someone wanted to make trouble?

The "going dutch" thing makes more sense to me. I'd be sure to charge not only the costs of ingredients, but electricity/propane, PBW, sanitizer, and other consumables like paper towels.

Maybe I've misunderstood it in past discussions here, but it was my understanding that if anything of value changed hands, the beer could be considered "sold" - in other words, you, as the brewer, have to buy everything. Jim can't buy the ingredient kit, you brew the beer, and give the beer back to Jim - in the eyes of the powers that be, that was a sale.

 

[kh54s10]

Why not contact a club already in operation and ask them questions? There are a lot of them and I am sure many have different methods to cover costs.

Or maybe a club organizer will chime in here.

 

[smrtpunk]

Why not contact a club already in operation and ask them questions? There are a lot of them and I am sure many have different methods to cover costs.

Or maybe a club organizer will chime in here.

I was kind of hoping someone within a club would chime in.

As for transporting, I was thinking about placing the beer in a carboy with an air lock and placing the carboy into a milk crate and then ratcheting in down for extra security.

 

[Dcpcooks]

We started an AHA sanctioned club two years ago. It's a bit of a process to get off the ground. I'm not sure that's what your looking to accomplish. Today is my last day as club President.


You'd need:
a fein number
Not for profit status with the IRS
A bank account which requires the above
A meeting place
Bylaws and a board
Insurance, you can only get it at September through the AHA and you need a list of members

The up side is you can pour at events. Most events will pay some form of a stipend to recoup brewing expenses.

Within our group is a smaller group of about four or five guys that just split expenses and split the beer. I'm thinking that's a better option based on what you've described above. Think of it more like a co-op than a club. You won't have the documentation listed above but you won't have the protections the above afford.

Let me know if you have any questions.

 

[smrtpunk]

Ya, I think your second option about spliting the expenses is more the direction I'm looking to go.

I also like the idea of members bringing their wort home to ferment in their houses.