Alternating Proprietorships: Getting Started Without a Brewery
Posted on | October 19, 2011 | 1 Comment
Look at all that space? Room for one more? (Photo: GoodLife Brewing in Bend, OR - and my wonderful family Jess and Axel)
The craft brewing industry is ablaze with growth. More and more American craft beer is being sold; more and more brewers are popping up across the country. Its beginning to seem doable – starting your own brewery.
Many of you want to take that big step into professionally brewing. There are probably thousands of homebrewers who have systems and product worthy of floating through the open market. So why aren’t we all selling our grog? Well there’s an easy answer to that – regulation. The federal Alcohol, Tobacco, Tax & Trade Bureau and the Washington Liquor Control Board each enforce regulations that demand a level of professionalism, investment, and most daunting – commercial space.
Well, there is an answer for you. If you believe you have the recipe and drive to make it big, but lack the investment to setup your own shop, you might want to consider an Alternating Proprietorship (AP). The AP is also an option for those of you brewers with lots of space, and empty brewing, who are looking to offset your investment.
An AP is a permissible means of developing a brewing operation without your own shop. In short, the AP structure allows a “host” brewery (a previously existing entity holding a Brewers Notice) to provide brewing operation for a “tenant” brewery, who remains responsible for taxes, records and label submissions.
The AP is not a new concept, having been around for decades. But back in 2005, the TTB publicly issued Industry Circular 2005-2, which shined a light on this less expensive, startup option for brewers. The Industry Circular helps provide guidance on what types of relationships are permissible and what roles the tenant and host brewery must play.
There are a number of huge benefits to considering the AP option, if you plan on starting a brewery in the future:
- AP’s allow you to develop a brand well before you are ready to invest in your own space
- The host brewery takes on much of the physical pressure, burden and liability of the brewing operation.
- AP’s allow a brewer to begin placing their product in the stream of commerce to better preserve intellectual property rights
- AP host breweries often serve as a buffer to allow for easy transition into a highly-regulated industry.
Tags: Alternating Proprietorship > alternative proprietorship > host brewery > leasing brewery space > renting brewery capacity > TTB > Washington LCB
Washington’s Chuckanut Brewery Takes Home Coveted Awards at Great American Beer Fest
Posted on | October 4, 2011 | No Comments
Chuckanut Pilsner, Kolsch and Alt. Wonderful.
Congratulations to the wonderful people at Chuckanut Brewery, who took home the coveted Small Brewing Company of the Year award at the Great American Beer Fest. But, that wasn’t all. The Bellingham brewery took home Small Brewing Company Brewer of the Year (Nice work Will!), two golds (Helles and Kolsch), a silver (Dunkel) and a bronze (Alt). Their haul is beyond comparison, and a testament to their creativity and unmatched quality.
If you haven’t been up to Bellingham to visit the brewery, expect a friendly and intimate look at one of the country’s best small brewers. At the brewpub, you can sit along the inlet, taste excellent local food and even poke into the brewery and smell the fine scent of German Alt, Kolsch and Helles.
What I love about this brewery – their commitment to making perfectly crafted German beer, in a NW market. We have a tendency to ignore anything that doesn’t have more than 50 IBU or 7% ABV. Its just the way of the NW, where we dig our big beer. But Chuckanut is passionate about crafting perfectly balanced beers with utmost clarity. In fact, I have never seen any brewer (not even in Germany) work clarity from filtering the way that Will Kemper does. Kudos to the Kempers for bringing incredible German beer to this great state.
Tags: Chuckanut Brewery > GABF winners > washington breweries > washington winners at GABF
Personalized Label Hassles? Don’t Fret, The TTB Has Loosened Restrictions
Posted on | September 27, 2011 | No Comments
Personalized labels are desirable, just like this one done for my son's birth.
At least one time in your life as a brewer, you will be asked to make a beer for a friend’s event. A wedding, a graduation, an anniversary – whatever. But, your friend will want you to make a custom label.
Under the old rules, a brewer was required to request a label approval for every single variation of your beer’s labels. Not anymore. Luckily, the TTB has decided to relax its requirements and allow brewers to use already-approved personalized labels with different graphics. That means that your approval for “30 Year Old Doug” might work for “Jess and Doug’s Anniversary Ale.”
According to TTB Guidance 2011-5:
….for personalized labels, it has long been our policy to permit the holder of an approved COLA to change items such as salutations, names, and event dates on the label without applying for a new COLA. Our 2010-1 guidance did not allow certificate holders to change the artwork or graphics on personalized labels without resubmission of the labels for approval. We have reconsidered this requirement and now permit certificate holders to make changes to the graphics or artwork on a previously approved personalized label without having to apply for a new certificate of label approval.
So, if you are planning on offering personalized bottles for your customers, remember these important rules. First, you must submit a COLA application for a personalized label template. On the application (item 19 of the paper application) you must advise the TTB that you are requesting a personalized template, stating the parts of the label that may change from label to label.
Tags: beer labels > brewery personalized label > COLA submissions > custom labels for brewery > label submissions > personalized label submissions > TTB COLA > TTB Guidance 2011-5 > TTB personalized labels > TTB rules
First Elway Polls Show a Split on Washington Liquor Initiative
Posted on | August 24, 2011 | No Comments
Polling on I-1183 has begun
A couple of weeks back, I dropped a line on Washington’s newest liquor initiative. The results of the first Elway Poll have already surfaced and my expectations have prove true: Washingtonians are split right down the middle.
Washington’s Initiative 1183 (I-1183) calls for privatization of the liquor system, relaxation of beer and wine sales restrictions and licensing of private vendors. Last year, I-1100 lost by a narrow margin (53-47). It appears that I-1183 will be a hard fought battle for both sides of the initiative.
According to the Seattle Times, the Elway Poll showed that 50% support it, 38% oppose it and 12% are undecided. Well, it cannot get much closer that that. Each of the voters in that 12% undecided group can get ready for a firestorm of political ads and campaigns to help sway your vote.
The newest article also shows that the opposition group, Protect Our Communities, recently received $4 Million in funds. Those coffers will allow the opposition to go toe to toe with big spender Costco, who has pushed the passage of this initiative.
Stay tuned for more. This won’t go away until November; or as last year showed, until it actually passes.
Tags: I-1100 > I-1183 > I-1183 polling > I-1883 > Initiative 1183 > washington liquor privatization
I-1183 Puts Liquor Privatization Talk Back On The Table
Posted on | August 9, 2011 | 3 Comments
Liquor privatization is back, with a vengeance.
***This was originally published on BeerBlotter.com, a Seattle based beer blog edited by my wonderful wife. I provide legal commentary to BeerBlotter.com throughout the year.***
We can all curse it – we can all love it. The fact of the matter is that another voter initiative is here and its hoping to break liquor from the controls of the state. Will this new one be bringing additional changes to the current alcohol regulation scheme? Yep.
Last year, I-1100 took Washington by storm. That voter initiative that was funded primarily by Costco and was the topic of conversation on this blog and many others for a matter of months. In the end, I-1100 lost by a fairly narrow margin of 53-47.
This year’s initiative took a different approach – scale back the “open market” approach, raise money for the state and file late.
I-1100 was an open market proposal aimed at pulling all sales restrictions on all products. That proposal drew the ire of the Washington Beer Commission who feared wholesale discounts for out of state producers, less shelf space and the emergence of tied-houses. I-1183 heard that disdain and decided not to mess with prohibitions against shelving deals, credit sales and other wholesale discounts. Convenience stores are not going to have the opportunity to sell liquor under the new initiative – only specially licensed stores with adequate (10,000) square footage.
The Washington Beer Commission has not made their position public, but I suspect they will have a different response. The law simply doesn’t raise as many flags as last year’s proposal.
Tags: I-1100 > I-1183 > washington beer commission > washington brewery law > washington liquor law > washington liquor privatization > washington voter initiatives
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