House approves bill to boost craft breweries
The House unanimously approved Richmond Delegate Jennifer McClellan’s bill to let licensed breweries lease their facilities to craft beer makers, a move that may boost the local beer industry.
From Capital News Service, Charles Couch
Neil Burton studied the brewing industry for two and a half years as he prepared to bottle a new beer for Richmond consumers. But Burton still lacks the most important ingredient for breaking into Virginia’s brewing business–a start-up fund of roughly a million dollars.
“It costs a lot of money because the equipment’s so expensive,” Burton said. Plus, there’s the cost of buying or building a brew house–the building where the product is brewed, fermented, and bottled. Those expenses represent major financial limitations on who can make craft beer. But a bill approved by the House and sent to the state Senate may cut the steep cost for those brewing on a budget.
Delegates on Friday unanimously approved House Bill 359, sponsored by Delegate Jennifer McClellan, D-Richmond. It would allow licensed breweries to lease their facilities to other licensed beer makers. “The problem is the way current law defines a brewer,” McClellan said. To become a licensed brewer, one must own the brew house where the alcoholic beverage is produced, McClellan said.
“You have to be the one that owns the physical sort of bricks-and-mortar distillery, which is very capital intensive, and a lot of people just can’t afford to do that,” McClellan said. “But you have existing breweries that have excess capacity, who would love to sort of enter into an agreement with a new craft brewer and brew their beer. But they can’t do it under current law.” As McClellan points out, beer makers aren’t using their equipment at all times.
Burton can attest to that: makers brew a batch, place it in fermentation tanks and then the brew house may sit idle as long as the beer takes to ferment. “If you have the ability to maybe just purchase more fermentation tanks versus having to go and buy a separate brew house, it could make the cost of getting involved in the business easier,” Burton said. He said this would allow brewery owners to increase revenue when they wouldn’t be using their equipment anyway.
“It’s good for Virginia business is the way we see it, because it can increase fairly quickly the number of breweries in our state.” Currently, 36 brewing businesses operate in Virginia, Burton said.
Craft brewers have had success with similar legislation in Pennsylvania, Connecticut, Massachusetts, California, Colorado, Oregon, Washington, Florida, and Minnesota, he said. “Those are a lot of your key brewing states,” Burton said. “As a commonwealth, I think we’ve been doing a really good job with opening new breweries.
“But to have the beer culture that you would see in a place like Colorado, California, Pennsylvania–these types of beer cultures–I think we need some improved regulation and law that can make it a little easier for businesses to get involved in production brewing.”
Besides potential job and business growth, the bill could help attract tourists to the state, Burton said. “When taking these industries into account, it’s also a tourism draw for people who want to come taste these products and visit the actual brewery.”
The craft brewing industry provides 100,000 jobs in the United States.
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photo of Neil Burton by Capital News Service
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Oh man, super duper exciting. I hope this finds similar success in the senate.
YES!
Anyone knowledgable as to how long one might need the brew house capacity for a batch of beer of x, y, or z sizes? I assume a bigger brewery would be brewing then fermenting and distributing constantly like an ongoing production….? Curious and obviously ignorant.
@Mike
That’s the idea, but smaller brew houses might go for a day or days without any actual “brewing” that is: sparging, boiling, racking, bottling. I am just getting into home brewing and I can attest to the fact that it’s mostly time and patience. It might take an extra few hours to bottle a batch of a bigger yield, but brewing times remain the same.
The way I read the article was that existing breweries might have one or two empty kettles/fermentation tanks that they can lease to a small craft brewer, or they might have space to lease in which a small craft brewer might purchase the kettles/fermentation tanks themselves. The inherent cost has a bit more to do with plumbing, insulation, electrical, heating and cooling than you might think. Brew houses need to be kept at very specific temperatures, especially fermentation rooms. If a brew house is already set up to do these things, it makes the costs for the small craft brewer go way down.
The Old Dominion Brewery in Northern VA comes to mind when I think of this bill. If they aren’t running at absolute full capacity, it would be very cost effective for them to rent their space to a small batch brewer. Actually, right now they also brew Tuppers Hop Pocket ale, which is headquartered in Maryland. I think that functions as more of a licensing deal but you get the idea.
Either way good beer takes about 1-3 weeks to ferment and age, then about 3-4 weeks before it would hit any store shelves.
@T
Actually, Old Dominion is now owned and brewed in Delaware. Tuppers’ beers are contract brewed at St. George and have been since OD closed down several years ago. The former Old Dominion facility in Ashburn is now being operated as Lost Rhino.
Thanks Paul good to know, I haven’t been up there in forever and the Tuppers website is possibly unchanged from 1998.
Great legislation for the Virginia economy! Great for us craft beer lovers too.
I miss living in Jennifer McClellan’s district. She represented me well and she has several great quality-of-life bills this year. I’m in Loupassi’s district now and while the bills he’s introduced this year are mostly pretty harmless, his socially conservative votes are making Virginia much less pleasant for me.
Beltway Brewing Company in DC has been working on this model for some time:
http://www.washingtonpost.com/blogs/all-we-can-eat/post/beltway-brewery-this-beers-for-you/2011/11/26/gIQA0xbqzN_blog.html
Awesome to see that VA is pressing forward with this bill to offer similar partnerships between VA-based craft brewers.
Lookin’ good, Neil!
This bill will be great for craft brewing in Virginia and for opening up possibilities for people around the state to have access to great beer.