Craft brewers continue push to double current limits for annual production

12/07/2015 02:30 PM

FRANKFORT – As the 2016 General Assembly session approaches, officials from the craft brewing industry made another pitch to lawmakers to make two revisions to state statute to help the industry grow and produce increased tax revenue for the state.

Adam Watson, president of the Kentucky Guild of Brewers and co-owner of Against the Grain Brewery and Smokehouse in Louisville, along with Daniel Harrison, co-owner of Country Boy Brewing in Lexington, told members of the Interim Joint Committee on Economic Development and Tourism on Monday that their industry is steadily growing, but needs restrictions limiting the maximum amount of beer brewed per year increased; as well as allowing craft brewers to sell their products at “fairs, festivals, and other similar types of events” in order to enhance visibility and marketing of their products.

Watson, told committee members that the industry has seen astonishing growth in the commonwealth over the last six years.

“In 2009, Kentucky had only five breweries, producing less than 15,000 barrels of beer,” Watson said. “In 2014, Kentucky brewers produced 71,640 barrels of beer and generated revenue of $45 million. At the rate that we’ve been expanding and adding new facilities, I’ll be surprised if our 2015 numbers don’t approach doubling that.”

Watson estimates the total economic impact of Kentucky produced malt beverages moving through the three tier system at $495 million annually.

Kentucky’s current total of 33 craft brewers export to 38 states and more than 12 countries.

The first request to legislators is to raise the production volume cap on the existing micro-brewer license from 25,000 barrels to 50,000 barrels annually.

Watson says that several craft brewers are closing in on the 25,000 barrel limit and raising the amount will allow the companies to continue to grow and prosper and produce increased tax revenue for the state.

“Several years ago, none of us ever imagined that we’d approach the 25,000 barrel mark,” Watson said. “But there are several of us looking to exceed that mark in the very near future. As the law currently stands, the most successful of us would be faced with making the choice between abruptly stopping our growth, and closing down our tap rooms.”

The second request is to permit craft breweries to sell their products at small functions such as fairs or festivals, which is a privilege already afforded to small Farm Wineries under their existing statute. This would allow provide market access to smaller breweries as well as enhance visibility and marketing of all of Kentucky’s craft beers.

“These events are one of the most effective ways small brewers have to build brand recognition and a consumer following that enables them to break into the retail market,” Watson said. “We regularly turn down requests from community leaders and other organizations because we simply aren’t allowed to vend at their event.”

Rep. Jill York, R-Grayson, pointed out to Daniel Harrison, who also serves as secretary for the Kentucky Guild of Brewers, that another advantage of a healthy craft beer industry in Kentucky is additional revenue for Kentucky farmers.

“You’ve also got a lot of Kentucky farmers growing your materials for use in that and that keeps spreading that impact in the communities,” York said.

“We’ve bought every hops that we can find in Kentucky,” Harrison said. “There is the Kentucky Hops Growers Alliance. It’s in its infancy but, it’s growing, to kind of find willing farmers who are looking to find new crops to grow.”

Watson said that his organization is currently working on drafting language for their bill as well as looking for a legislator to sponsor it.


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