Legalities

[whiskeysausage]

So I made a few brews with a bottle and carboy, success.
I bought a nanobrew system, still working it.

My specific question comes into play on the 'business/legal' side of things. I understand that I cannot sell from my garage, but can I take 'donations'? Can I give it away and sell T-shirts and mugs?

Also, can a microbrewery sell beer on premise? This question comes from "a guy that talked to another guy" that was telling me what to do, who said that a microbrewery cannot sell beer on premise, and that it must sell 'its beer' to another 'entity' in order to sell the beer on site. I.e., the microbrew sells to the restaurant (both owned by the same person, both under the same roof, but two legal entities) in order for it to be legal per federal guidelines.

Is this true? Is this partially true? I can't find anything that clearly defines the situation and have spent a good amount of time online digging around empty handed, hence, I am offering up the question to the well versed masters (you all) in all things legal and artisan in brewing.

Much appreciated, thanks in advance. For reference, I'm in Colorado.

 

[j1n]

You can just look up your state laws and what license / permits you would need. just go to the source rather than ask people on a forum.

 

[seabass07]

Yea, varies state to state, so you'll have to dig through your local laws. Here, there is at least one nano that started in a shed in his back yard and was legally selling keg and growler fills there. Now he's got a tap room. But that's washington.

 

[Yooper]

You can not sell until you are fully licensed. You can not accept donations, or barter in return for brew.

In some states, microbreweries can not self distribute or have a tap room on premises. In some states, they can. Generally, brewpubs can serve their own beer, but they have to have a "brewpub" license and not be a "microbrewery" that packages beer to be sold outside of their own pub.

Laws vary widely from state to state.

 

[sweetcell]

the laws that cover the production and sale of alcohol are a mix of federal, state and municipal, so there is no one-size-fits-all answer unfortunately. you clearly have a lot of research ahead of you. and once you complete it, and if you're ready to proceed, you'll have a lot of red tape ahead of you.

until you get the right permits (which often involve getting a commercial space for making your brew, authorities generally won't grant a license for a residential area), you cannot accept any money for your beer. you can sell t-shirts and mugs but their purchase can't be related to alcohol in any way (you can't offer beer to someone only if they buy a t-shirt, for example).

 

[Brewbien]

You can not sell until you are fully licensed. You can not accept donations, or barter in return for brew.

In some states, microbreweries can not self distribute or have a tap room on premises. In some states, they can. Generally, brewpubs can serve their own beer, but they have to have a "brewpub" license and not be a "microbrewery" that packages beer to be sold outside of their own pub.

Laws vary widely from state to state.

The laws do vary quite a bit. There are two pretty well known basement bars here in Portland where they do take donations while serving homebrew and allowing people to smoke since it is in someones home. We seem to have some of the most lenient beer laws here though.

 

[sandyeggoxj]

Here is some homework. You are new at this and that is cool, but you have A LOT of reading to do.

http://en.wikipedia.org/wiki/Alcohol_and_Tobacco_Tax_and_Trade_Bureau
http://www.ttb.gov/beer/
http://www.ttb.gov/industry-startup/beer/beer-startup.shtml
http://www.colorado.gov/revenue/liquor


Once you have read all that go to probrewer.com and read all that. Then think of a company name and go to this site and this site and see if you can register that name.

Now you are getting started. You have some information and now you can start the physical side of things: building, business licenses/tax id's, permitting, equipment, etc. Get ready to learn a lot about everything. Once you figure out your plan take your expected costs and double them. And then maybe add 20%.

 

[fosaisu]

Permitting regs will also vary from town to town within a state, so you really do need to carefully research the rules for your locality.

If there are any brewpubs in your town, you might consider chatting them up about the process they went through to get up and running. They'll probably be hesistant to give you legal advice (and rightly so) but if you find someone friendly and knowledgable they might be able to share enough info to help you decide if it's worth pursuing (at which point you'd want to actually look at the laws and regs on the books, talk to the relevant local permitting offices, etc.) If you've read any of the brewery startup threads on this site, you'll quickly see that one thing you really want to avoid is running up costs by building a setup that doesn't meet federal/state/local code requirements.

 

[Zuljin]

When a a bar and grill in Texas was sold to someone else who opened it under a new name, that new owner was having trouble getting a liquor license. He could not sell beer during the first charity poker run he held.

What he did was serve beer and suggest that people make donations each time they ordered one. You know, to help cover costs for the poker run. The event, and the bar and grill, were open to the public, even if you weren't participating in the bike ride. It was an end run around the license issue.

It's not the same as the topic here, just an example of accepting donations for beer. I mean, to help cover costs of a charity event.

 

[fosaisu]

The laws do vary quite a bit. There are two pretty well known basement bars here in Portland where they do take donations while serving homebrew and allowing people to smoke since it is in someones home. We seem to have some of the most lenient beer laws here though.

That sounds pretty cool - are you sure they're legal operations though?

 

[fosaisu]

When a a bar and grill in Texas was sold to someone else who opened it under a new name, that new owner was having trouble getting a liquor license. He could not sell beer during the first charity poker run he held.

What he did was serve beer and suggest that people make donations each time they ordered one. You know, to help cover costs for the poker run. The event, and the bar and grill, were open to the public, even if you weren't participating in the bike ride. It was an end run around the license issue.

It's not the same as the topic here, just an example of accepting donations for beer. I mean, to help cover costs of a charity event.

If you go this route (end run around licensing requirements) the charity you raise money for should probably be your legal fund!

Seriously, I doubt regulators in most areas would smile on this kind of thing and while you might get away with it for a one-off event, if you are operating an unlicensed business with a sham payment system they'll eventually figure it out and shut you down.

 

[Brewbien]

That sounds pretty cool - are you sure they're legal operations though?

As far as I know they are, but I'm no lawyer. They make less the legal annual limit, and are only open one or two nights a week. It looks like a real bar its just in a guys basement, you don't have to donate as that would be illegal but everyone is pretty respectful and does donate. Its well known enough that I think it would have been shut down if it were illegal.

 

[Homercidal]

I don't know of any state that can legalize the selling or bartering of homebrew. It's a federal law. States can only restrict that law (hence why some states took forever to legalize homebrewing.)

Even if someone has a basement bar and accepts "donations" they are very likely breaking federal laws and could be shut down and fined. It would not be very for the government to prove that the donation jar at the basement bar was connected to the distribution of the homebrew.

The best thing is to only "sell" to friends and to not make it public.

Trust me, I understand how much time and money and blood, sweat, and tears, it takes to open a brewpub. I've seen a few people go through the process. It's very tempting to want to start earning money in advance of the building and licensing. The states are usually interested in helping someone start a new business, but they also want to make sure that people follow the 3-tier system (or whatever system is in place in that state) and are built to code and licensed only after safety and health inspections are complete.

For instance, I know for a fact that it's illegal to sell beer from a residential property in Michigan. You may not brew beer at home and then sell it at a bar. You have to have a specific outbuilding designated as a brewery (It might be a home, but not a home that is actually used as a residential home).

Once you get past the point about the not being able to sell homebrew AT ALL, the other limitations or lack thereof vary from state to state and from community to community.

I really think Probrewer.com is the best place to get the best information on this. Many of those guys have gone through it and they live to help others get started as well.

 

[Brewbien]

Even if someone has a basement bar and accepts "donations" they are very likely breaking federal laws and could be shut down and fined. It would not be very for the government to prove that the donation jar at the basement bar was connected to the distribution of the homebrew.

Well apparently he just got shut down in December after 7 years after being featured on the Brew Dogs show. He admitted to brewing over 30 gallons per week on the show which is over the limit so they shut him down. People have interviewed police and the OLCC (Oregon Liquor Control Commission) over the past 7 years and they said on multiple occasions that what he was doing wasn't illegal, until they found out he was brewing too much.

 

[seabass07]

I don't know of any state that can legalize the selling or bartering of homebrew. It's a federal law. States can only restrict that law (hence why some states took forever to legalize homebrewing.)

I don't think he was talking about selling homebrew. I think he was talking about going pro but producing and selling on his own property.

 

[BigFloyd]

I find this a bit odd for a first post and on the "Beginners Beer Brewing Forum" no less.

IMO, when it comes to making a business (even a tiny one) out of brewing/selling beer, do it by the book or don't do it. Criminal lawyers' fees are expensive, you're fighting an opponent who has almost limitless resources and in some situations the gov't can seize your stuff.

 

[pablosbrewing]

As far as I know they are, but I'm no lawyer. They make less the legal annual limit, and are only open one or two nights a week. It looks like a real bar its just in a guys basement, you don't have to donate as that would be illegal but everyone is pretty respectful and does donate. Its well known enough that I think it would have been shut down if it were illegal.

Federal legal limit is only 200 gallons per year *cough*. That's less than 31 pints a week. Not nearly enough for me to open my basement to the public, I'd have nothing left for me

Edit: 200 gallons is per household, assumes 2 or more adults live there. Otherwise 100 gallons is the limit.

 

[Doctor_M]

Good information in here!

 

[northcal]

Pretty sure that is illegal in every state.

The man wants his share. Interesting time to post this, it's April 15th.

So I made a few brews with a bottle and carboy, success.
I bought a nanobrew system, still working it.

My specific question comes into play on the 'business/legal' side of things. I understand that I cannot sell from my garage, but can I take 'donations'? Can I give it away and sell T-shirts and mugs?

Also, can a microbrewery sell beer on premise? This question comes from "a guy that talked to another guy" that was telling me what to do, who said that a microbrewery cannot sell beer on premise, and that it must sell 'its beer' to another 'entity' in order to sell the beer on site. I.e., the microbrew sells to the restaurant (both owned by the same person, both under the same roof, but two legal entities) in order for it to be legal per federal guidelines.

Is this true? Is this partially true? I can't find anything that clearly defines the situation and have spent a good amount of time online digging around empty handed, hence, I am offering up the question to the well versed masters (you all) in all things legal and artisan in brewing.

Much appreciated, thanks in advance. For reference, I'm in Colorado.

 

[bleme]

I have a friend that just started a microbrewery here in California. He had to rent a building in an industrial zone and set up all his brewing equipment, without producing a drop, for 9 months until he was approved to produce.

 

[Calichusetts]

Here is some homework. You are new at this and that is cool, but you have A LOT of reading to do.

http://en.wikipedia.org/wiki/Alcohol_and_Tobacco_Tax_and_Trade_Bureau
http://www.ttb.gov/beer/
http://www.ttb.gov/industry-startup/beer/beer-startup.shtml
http://www.colorado.gov/revenue/liquor


Once you have read all that go to probrewer.com and read all that. Then think of a company name and go to this site and this site and see if you can register that name.

Now you are getting started. You have some information and now you can start the physical side of things: building, business licenses/tax id's, permitting, equipment, etc. Get ready to learn a lot about everything. Once you figure out your plan take your expected costs and double them. And then maybe add 20%.

Honestly, can we make this the standard auto-response. Change up the state info, but this is spot on. Nothing ground-breaking on this site and this advice is perfect. Good luck...

 

[sandyeggoxj]

Honestly, can we make this the standard auto-response. Change up the state info, but this is spot on. Nothing ground-breaking on this site and this advice is perfect. Good luck...

I would be honored if you copy/paste this around. I have read all of it and more and I get a little frustrated with people who just want us, or anyone really, to tell them what to do. If you aren't motivated to find it then you can't do it . Pretty simple stuff. Lots if info and logistics but nothing that is very hard to figure out.

 

[thatjonguy]

The first thing you should do if you want to get in the beer business is start reading federal code. Then state law. Then county/city ordinance. Then federal code again.

Repeat.

Making beer is great fun; but the size of the brewery is no matter to the government. The laws apply universally.

Commerical brewing is still a business, it is still subject to all the business stuff. If you have no interest in business nor learning and actively participating in that side; then you might just want to stick to home brewing.

 

[sweetcell]

If you have no interest in business nor learning and actively participating in that side; then you might just want to stick to home brewing.

or find a partner who is willing to take care of the business side, while you do the brewing part. hey, one can dream...

 

[Homercidal]

I don't think he was talking about selling homebrew. I think he was talking about going pro but producing and selling on his own property.

I interpreted it to say that he wanted to find a way to sell homebrew until he could get his actual license. At least find a way to make money by not selling homebrew, but by selling something else while giving away the homebrew.

One thing he might be able to do is sell T-shirts for the future brewery to make money and not charge AT ALL for people to come in and sample his homebrew for evaluation. As long as there is ZERO mention of getting a free sample when advertising the shirts, and as long as the sampling customers leave without buying a single thing. Then he might be able to persuade a judge that there was no barter being done.

 

[Clonefan94]

I hate to be a jerk to the OP if he is legit, but does anyone else get the "This is a Troll" feeling from the post?

So I made a few brews with a bottle and carboy, success.
I bought a nanobrew system, still working it.

This question comes from "a guy that talked to another guy" that was telling me what to do,

I mean the guy goes from making a few brews in a carboy to buying a nanobrewery? And this is his only post? Seems like a lot of investment to go into from talking to a guy who talked to another guy who said something.

I apologize if the OP is sincere. Please accept that. It just seems to me that a simple google search about how to start a brewery would have been my first instinct. Hell, typing in "Selling Nanobrew" brings up at the first link the TTB FAQ page.

 

[Homercidal]

I hate to be a jerk to the OP if he is legit, but does anyone else get the "This is a Troll" feeling from the post?





I mean the guy goes from making a few brews in a carboy to buying a nanobrewery? And this is his only post? Seems like a lot of investment to go into from talking to a guy who talked to another guy who said something.

I apologize if the OP is sincere. Please accept that. It just seems to me that a simple google search about how to start a brewery would have been my first instinct. Hell, typing in "Selling Nanobrew" brings up at the first link the TTB FAQ page.

I wouldn't jump to that conclusion. I've seen this before form someone who gets bit by the bug pretty hard and has enough business experience to want to jump into making an awesome hobby into a business. They pop up on here from time to time. It's usually pushed along by friends and family who tell the homebrewer that they beer is awesome and they could make money selling it. I've had it happen to me (mostly just because I am into craft beer and brewing and they see the growth in the industry, not because my beer is that awesome...)

We see it here from time to time. Not as much lately.

 

[Clonefan94]

I wouldn't jump to that conclusion. I've seen this before form someone who gets bit by the bug pretty hard and has enough business experience to want to jump into making an awesome hobby into a business. They pop up on here from time to time. It's usually pushed along by friends and family who tell the homebrewer that they beer is awesome and they could make money selling it. I've had it happen to me (mostly just because I am into craft beer and brewing and they see the growth in the industry, not because my beer is that awesome...)

We see it here from time to time. Not as much lately.

I hear you. And you are probably right. I just find it odd that you jump in that head first, but don't bother to come back and post in the thread and actually carry on the discussion you started. The one post thing is what is my red flag.

 

[jbaysurfer]

I have read all of it and more and I get a little frustrated with people who just want us, or anyone really, to tell them what to do. If you aren't motivated to find it then you can't do it ..

Quoted for truth.

 

[Trox]

I hear you. And you are probably right. I just find it odd that you jump in that head first, but don't bother to come back and post in the thread and actually carry on the discussion you started. The one post thing is what is my red flag.

I'm thinking he didn't get the answers he was looking for so decided to slink away thinking he was looking like a fool, and so wanted to cut his losses.

If it is a troll post then it is a very weak one, and he should feel bad about that. If he wants to see what a real troll post is then he needs to check out the "I'm not a Homebrewer, but an Artisan" thread. That was a decent troll post; could have been a lot better if the OP had come back and posted in it once in awhile.

 

[Clonefan94]

I'm thinking he didn't get the answers he was looking for so decided to slink away thinking he was looking like a fool, and so wanted to cut his losses.

If it is a troll post then it is a very weak one, and he should feel bad about that. If he wants to see what a real troll post is then he needs to check out the "I'm not a Homebrewer, but an Artisan" thread. That was a decent troll post; could have been a lot better if the OP had come back and posted in it once in awhile.

If all trolls were good ones, we probably wouldn't hate them as much.

I guess troll was maybe a bad word.

I like your descriptive "slink away" I'll refer to these types of posters from now on "Slinkies"

 

[Phunhog]

One thing we never talk about is the enforcement, or lack thereof, of laws pertaining to homebrew. I have heard that the ABC in my area only has two agents to deal with thousands of licensed alcohol establishments. The last thing they want to do is deal with a bunch of homebrewers. They simply don't have the time. Now that is NOT permission to break the law of course but rather take a don't ask/ don't tell approach.

 

[sweetcell]

One thing we never talk about is the enforcement, or lack thereof, of laws pertaining to homebrew. I have heard that the ABC in my area only has two agents to deal with thousands of licensed alcohol establishments. The last thing they want to do is deal with a bunch of homebrewers. They simply don't have the time. Now that is NOT permission to break the law of course but rather take a don't ask/ don't tell approach.

i would think that news of a homebrewer - or anyone, for that matter - selling alcohol illegally would attract the ABC's attention very quickly.

their job is usually inspecting law-abiding bars and beer shops, looking for outlyers (someone breaking the law). so you might need to check out dozens or hundreds of places before finding anything that needs enforcement.

a homebrewer selling out of his garage is a guaranteed bust. it's known illegal activity, instead of hoping to find something.

 

[Phunhog]

i would think that news of a homebrewer - or anyone, for that matter - selling alcohol illegally would attract the ABC's attention very quickly.

their job is usually inspecting law-abiding bars and beer shops, looking for outlyers (someone breaking the law). so you might need to check out dozens or hundreds of places before finding anything that needs enforcement.

a homebrewer selling out of his garage is a guaranteed bust. it's known illegal activity, instead of hoping to find something.

True but a licensee MUST let an ABC officer into their business....it's a part of their license. The only way an ABC officer can gain access into a private garage is with a search warrant or an undercover sting operation. I can't imagine them putting that much time/effort into something like that. Unless they were serving to minors...then they get what they deserve.

 

[sweetcell]

I'm thinking he didn't get the answers he was looking for so decided to slink away thinking he was looking like a fool, and so wanted to cut his losses.

alternately, he asked a (naive) question and was met with OMG YOU CAN'T JUST DO THAT YOU NEED TO REEEEEAAAAAAAD EFFING REGULATIONS IT'S FEDERAL VS. MUTHA STATE VS. BADASS LOCAL BRACE YOURSELF RUN AWAY etc etc etc... and the OP decided to back away, slowly, from the crazy.

yes, i recognize that i was one of those screamers :rockin:

 

[sweetcell]

True but a licensee MUST let an ABC officer into their business....it's a part of their license. The only way an ABC officer can gain access into a private garage is with a search warrant or an undercover sting operation. I can't imagine them putting that much time/effort into something like that. Unless they were serving to minors...then they get what they deserve.

we're getting totally here...

if the homebewer is selling to the public, then he needs to let the public in somehow. inspector would just need to show up when the homebrewer has his/her door open. sees homebrewer being sold, proceeds to shut the place down.

as someone mentioned before, if the homebrewer sold small amounts to friends and family, and everyone kept their mouths shut, then the chances of getting caught are lowered. WARNING: it's still illegal.

 

[Trox]

alternately, he asked a (naive) question and was met with OMG YOU CAN'T JUST DO THAT YOU NEED TO REEEEEAAAAAAAD EFFING REGULATIONS IT'S FEDERAL VS. MUTHA STATE VS. BADASS LOCAL BRACE YOURSELF RUN AWAY etc etc etc... and the OP decided to back away, slowly, from the crazy.

yes, i recognize that i was one of those screamers :rockin:

Maybe, but the way he worded his questions left me with the feeling that he was looking for "Yeah that works we all do it all the time around here" answer.

If all trolls were good ones, we probably wouldn't hate them as much...

I guess that is true, but then I visit a lot of MMO forums so tend to expect more from my trolls. Then again gaming trolls have much easier topics and audience to work with.

 

[jbaysurfer]

One thing we never talk about is the enforcement, or lack thereof, of laws pertaining to homebrew. I have heard that the ABC in my area only has two agents to deal with thousands of licensed alcohol establishments. The last thing they want to do is deal with a bunch of homebrewers. They simply don't have the time. Now that is NOT permission to break the law of course but rather take a don't ask/ don't tell approach.

Thats a dangerous attitude to propagate in the Homebrew community IMHO.

When federal authorities don't have the resources to enforce certain activities, and they think those activities are becoming a problem, they just out law it completely.

 

[KeyWestBrewing]

Would people still be allowed to have free beer without giving any form of a donation or entry fee? If the answer is no then its still considered a sale. If they were to not buy a shirt/mug would they still be allowed to have free beer? If the answer is no then its still considered a sale. To sell your beer you must be fully licensed and what requirements must be met will depend on your states laws. There's also a lot to go through before a facility is even legally allowed to be used for production.

As was said.... Do it right or don't do it at all. This is something the government does not mess around with. If they find out your bucking the system they will drop the hammer on you.

 

[kevron]

I am a mod on other forums, and occasionally you'll get agents posting leading questions seeing what kind of responses they get. Just a heads up. ipe: