Senate Bill 177 Aims To Change The Game For Small Craft Breweries. Current Tennessee Law Prevents Breweries From Self-Distributing Beyond County Lines.
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Published May 3, 2021
By Jon Styf [The Center Square contributor] –
Brad Eldridge-Smith and his business partner plan this summer to open the taproom at Common Law Brewing in Spring Hill.
They are in the process of getting their equipment in and starting their small business, the first brewery to serve the area of 45,000 residents and growing.
Without a bill that passed the Tennessee House on Thursday and is headed to Gov. Bill Lee, however, Common Law Brewing wouldn’t have even been able to sell a keg of its beer to most of the restaurants in town.
Senate Bill 177 aims to change the game for small craft breweries. Current Tennessee law prevents breweries from self-distributing beyond county lines. Since Common Law Brewing is located in the Maury County side of Spring Hill and many of the restaurants are located in the Williamson County side of town, the change would be significant.
The measure, if signed by Lee, will allow a craft brewery to distribute up to 1,800 barrels of beer annually across the state without being required to use a wholesaler, which many small breweries don’t have access to.
“This is a big step in the right direction for Tennessee around beer,” Eldridge-Smith said.
Patrick Keenan, owner of Copper Hill’s Buck Bald Brewing, said current Tennessee law has prevented his small, three-barrel brewery in a town of 350 residents from growing. He now is hoping to incrementally get his beer in more places.
“It totally changes what I am able to do,” Keenan said.
Keenan sells nearly all of the 275 barrels he brewed last year at his own taproom, with a few going to another bar in Polk County. Under SB 177, he said he could slowly expand and get his brewery’s name out there.
“We’re in this tiny town in the corner of Tennessee and, without taking out loans – which I have no interest in doing – I can’t expand,” Keenan said. “What this would allow me to do is to get the word out. I want people to come back to my brewery. That is exactly my goal. Expand my reach by letting more people know about me.”
Current law allows breweries to self-distribute 25,000 barrels within their home county each year. A smaller brewer, however, could stay under the 1,800 cap and distribute anywhere in Tennessee.
The bill was the result of negotiations between the Tennessee Malt Beverage Association, a coalition of the state’s beer distributors, and the Tennessee Craft Brewers Guild.
The bill’s largest benefit could be for brewers in smaller counties looking to distribute to the state’s population centers.
For Eldridge-Smith, the bill has the potential to be beneficial to more than only his business. He has made it a priority to use local ingredients, from local barrels for brewing to local honey, grits and coffee.
“Anything I can do as a business owner to fuel that sense of community and local economy is important,” Eldridge-Smith said.
The bill wouldn’t prevent breweries from choosing to use distributors as they expand. For many small breweries, it wouldn’t make sense to self-distribute beyond a smaller radius.
“It makes sense for us to have self-distribution over a limited footprint,” Eldridge-Smith said. “But, once you get a certain distance away from where the brewery is, you can’t do that.”