Ok, so we discussed this bill on the Insiders Roundtable on March 1st (it's the episode all about Josh Noel's New Book if you wanna listen) so lemme clarify some things and offer some opinions:
First we gotta talk about the licenses involved:
Class 1 Brewer's License = This is a license that allows one to produce up to 30,000bbls annually and can self distribute up to 7,500bbls. (Pipeworks, Lake Effect, etc)
Class 2 Brewer's License = This is a license that allows one to produce up 120,000bbls annually. This license cannot self distribute, but can commonly transfer (with approval) of up to 120,000bbls of its production (so up to 100%) to another Class 2 License owned by the same Licensee (Destihl, Revolution being the example of how they cannot transfer to the Brewpub without going through a wholesaler)
Brewpub License (Special Retailers License) = This license allows one to produce up to 5,000bbls annually and cannot self distribute, but CAN sell on and off premise (growlers) up to 5,000bbls, or 100% of production. There is no limit to how many brewpubs a License holder can own, so long as ownership is not shared with a Class 2 license. They CAN share ownership with a Class 2, but their brewpubs are limited to a max of 3 and the Brewpub must be a separate location. (Revolution)
One note here: Currently, Brewpubs can offer Food, Wine, Spirits, Beer & Cider. Taprooms can only offer their own beer.
Ok, ready? Here we go:
1: "For starters the bill allows Illinois brewers to sell their beer to other brewers for sale in those other breweries’ taprooms. (See amendments to 235 ILCS 5/3-12(a)(18)(A) and (C))"
So this part of the bill came about because two breweries did a collaboration beer, and then one of the collaborators couldn't sell it, sticking the other brewery with all of the inventory. This is pretty uncontroversial to everyone.
2: "2nd, in addition to allowing breweries to sell other craft beer from their taprooms it also allows brewers to sell cider from their tap rooms. (See amendments to 235 ILCS 5/6-4(e))"
Again, uncontroversial, and came about mostly because taprooms wanted to be able to have a gluten-free option. However it's worth pointing out that Cider is not defined by this bill, and that the language of the bill is fairly broad. Also, Cider is considered Wine by the IL liquor commission, so assuming this goes through, a Taproom could easily start selling wine and say "Yeah but by your own definition of Cider we can sell Wine too." The cynic in me sees this as a backdoor into Wine sales at taprooms.
3: "3rd, it allows Class 1 Brewers to transfer up to 930,000 gallons of their beer from one of their premises to another provided they obtain permission from the Illinois Liquor Control Commission, and allows Class 2 Brewers to transfer up to 31,000 gallons of beer between their premises so long as they’re within 80 miles of each other and provided they submit notice to the Illinois Liquor Control Commission of the transfer. (See amendments to 235 ILCS 5/5-12(a))"
So on the Class 1 side that's the entirety of production, or the full 30,000bbls. This make sense for the example of Lake Effect. They're in the process of opening a taproom, and can now send all of their beer there to sell.
On the Class 2 side, we'll use Revolution as the example, because as stated above, they can't transfer to their Brewpub or vice versa without going through their wholesaler. So this simply cleans up the language and allows them to do it.
Two things to note here: One is that the language in the bill says you must have manufacturing at both locations in order to transfer but doesn't impose a size limit either way on it. So in the Lake Effect example, Clint could have a 5 gallon homebrew "test system" in the Taproom. The other is that these these transfers are capped at the full 120,000bbls EXCEPT for Rev, Half Acre, Two Brothers & Destihl, all of whom have been grandfathered to be able to produce and transfer however much they'd like. When Pipeworks hits 120,000bbls (in 2022?!) they will not be able to transfer any more than that. Personally i understand why Rev and the others would be grandfathered, but personally i'm always bothered by an uneven playing field.
4: "And 4th, it establishes a Brewer Warehouse Permit which allows Class 1 Brewers to transfer and store up 930,000 gallons of tax-determined beer that they manufacturer at an off-site warehouse, and allows Class 2 Brewers to transfer and store up to 3,720,000 gallons of tax-determined beer that they manufacturer at an off-site warehouse. It should be noted that while this is a new license, the ability to operate an alcohol Warehouse is also still granted and addressed in Article VIIA of the Liquor Control Act. (See amendments to 235 ILCS 5/5-3)."
Also uncontroversial. People run out of room.
--
Overall these moves are fine, but i see a lot of this as ripe for exploitation by big beer, Ballast Point and Goose Island being the obvious examples here. With Ballast's foothold with their Brewpub license here in IL, they can now open as many as they'd like with the full force of Constellation behind them to do it, and can start exerting market pressure on pricing and such.
And ABDI doesn't like this, which makes me pretty happy.
![Craft A Brew - Safale S-04 Dry Yeast - Fermentis - English Ale Dry Yeast - For English and American Ales and Hard Apple Ciders - Ingredients for Home Brewing - Beer Making Supplies - [1 Pack]](https://m.media-amazon.com/images/I/41fVGNh6JfL._SL500_.jpg)
