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Tweak of state law could boost Mississippi breweries

It’s late one Saturday afternoon in September. Outside, the temperature has topped 90, making it seem more summer than fall. It’s the kind of heat that chases beer drinkers into the cool shadows of the neighborhood bar.

And they’re lined up on the stools at Chandeleur Brewing Co.’s bar in downtown Gulfport. It’s getting close to supper time and food is a big topic. College football plays on TVs high on the wall behind the bar.

It could be Anybar USA. Except it’s not a bar at all.

It’s a tasting room. And you can’t just walk in and order a Coconut Porter.

But you can pay $10 to take a tour of the brewery.

So a crowd of six went with Derik Conerly of Chandeleur on this particular Saturday for a five-minute primer on craft brewing. And then they went back to the tasting room for their reward — six samples of Chandeleur’s brews.

In Mississippi, beer must pass through a distributor before it is sold by a retailer or bar. Chandeleur, which cans its beer in its 8,000-square-foot building in Gulfport’s bustling entertainment district, can’t sell a single can to a visitor.

But times are changing. Patrons can now carry alcoholic beverages outside bars in the entertainment district, thanks to the “go-cup” law passed in the 2016 session.

Mississippi’s craft breweries hope 2017 will be the year the state’s beer laws catch up with the competition in neighboring states.

The Mississippi Brewers Guild doesn’t have the exact bill it wants to introduce in the next session, said Matthew McLaughlin, outside counsel for the guild, but it does have an agreement with the Beer Distributors Association on some key points.

The bill they expect to develop would:

▪ Allow in-state breweries that manufacture no more than 60,000 barrels of beer per year to sell their beer for on-premises consumption through taprooms and to sell up to 576 ounces per day per consumer for off-premises consumption.

▪ Provide for an annual cap for taproom sales and off-premises consumption sales of 10 percent of the annual production for the brewery or 1,500 barrels, whichever is less.

▪ Require breweries to pay state excise tax and sales tax on beer sold through the taproom and for off-premises consumption.

▪ Increase the production cap for brewpubs to 75,000 gallons per year, roughly 2,500 barrels.

▪ Remove food requirements from the existing brewpub qualification requirements.

▪ Provide the necessary safeguards for all tiers of the beer industry. Some surrounding states already have so-called taproom sales, which puts Mississippi at a disadvantage when it comes to corralling beer tourists, brewers say.

“Any additional revenue we can generate, whatever it is, if it’s six-packs, four-packs or pints by-the-glass, is real helpful to the business, it’s helpful to get over this start-up hump,” said Dave Reese, head brewer at Chandeleur Brewing.

“Any way that we can generate more revenue is going to be beneficial to everyone, not just us.”

Three-tier system safe

Mississippi has what’s known as a three-tier system that requires beer to go from the brewer to a distributor to a retailer. The law would alter that arrangement but mostly keep it intact.

“We very much support a three-tier system,” McLaughlin said. “Anytime you’re talking about a point of sale at a brewery, it does impact the distributors.”

That was why it was crucial to get the distributors on board with an effort to massage the state’s beer laws. They did that at a joint meeting in June.

“This issue has been vetted over the last several months by the association’s members who want to help the Mississippi craft brewers succeed and thrive while not causing any irreparable harm to the beer industry’s three-tier system,” said Ricky Brown, president of the Mississippi Beer Distributors Association. “This is very favorable legislation for the state’s craft brewers in hopes for their continued success.”

Scott Hixson agrees. Hixson is owner of Hops and Growlers, a Coast homebrew supply store and beer shop.

“Any change at this point will help, whether its brewpubs or breweries, any way to help these small businesses is a step forward,” he said.

Legislature not taking sides

Rep. Scott DeLano often is the point man for alcohol-related legislation because he is from the Coast, one of the resort areas that benefit from less restrictive laws, such as the go-cup law passed last year. He said the Legislature wasn’t taking a stand until the parties involved worked something out.

“It’s a delicate balance,” he said. “It’s something that there has to be a balance and we have to maintain that balance. It’s going to take all parties involved getting in agreement before the Legislature gets anything passed.

“I don’t think the Legislature is looking to take sides on this issue.”

He said any taproom sales are going to have limits. They won’t be able to sell a seasonal beer exclusively at the tap room, he said, nor would they be able to sell to restaurants.

And there probably isn’t a law that would save a struggling bar or brewery, DeLano said.

He said the go-cup law, which allows customers to leave a bar with a drink, “hasn’t been the panacea some thought it would be, but it’s a great freedom thing.”

“It’s a another amenity we can add.”

Taproom sales will only be a fraction of the revenue for breweries.

“We’re probably going to have some natural expansion and contraction within the industry,” he said. “There are some people leaning on this taproom thing as a way to save their business. If they’re relying on a taproom or backdoor sales to keep them afloat, they’ve got some problems that are much bigger than the state of Mississippi’s taproom laws.”

Paul Hampton: 228-896-2330, @JPaulHampton Nate Thurman: 228-896-2350

Mississippi lags

8 craft breweries (51st in U.S. per capita)

$223 million economic impact

30,790 barrels produced (.04 gallons per adult)

Alabama

24 craft breweries (39th)

$438 million economic impact

50,369 barrels produced

Louisiana

20 craft breweries (42)

$646 million economic impact

202,764 barrels produced

Arkansas

26 craft breweries (37th)

$324 million economic impact

24,623 barrels produced

Tennessee

52 craft breweries (23rd)

$753 million economic impact

142,818 barrels produced

2015 statistics from Brewer’s Association

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