Good news from Olympia! Very soon, Washington Brewers will be able to get Special Events permits to expand the way they can sample and sell their beers. Thanks to House Bill 2605 (signed by the Governor on 3/31/16 and effective 6/9/2016), brewers can seek out a special events permit up to twelve times a year. The permit lets breweries hold an event offsite from the brewery or taproom where they can sample and sell their beers directly to consumers. Brewers must seek out the permit ten days in advance of the event, and must post the permit at the premises where the event will be held.
How might Washington breweries take advantage of the Special Events permit? One example, aptly pointed out in coverage by the Washington Beer Blog, explains the scenario where a brewery on one side of the pass wants to reach out, sample, and sell to its fans on the other side of the pass. Rather than find a retail location for a tap takeover, the brewery can put together its own event to not only pour but also directly sell its beers. Breweries could also use allotted permits to serve at corporate events or other gatherings.
Ultimately, under the new law, the Special Events permit would give breweries one more way to reach out into the public, and they can do so up to twelve times per year. The permit cost is $10.00.
We’re excited to report this one, but also a little bummed it’s taken this long for breweries to get this privilege. The law revises RCW 66.20.010, where you’ll note that the present RCW 66.20.010(13) grants essentially the same right to distilleries and RCW 66.20.010(14) grants the same right to wineries, so it’s something our spirits-, cider-, and mead-making friends have been able to do for a while now. We’re proud the Washington Brewers Guild got it done, but would also support a collaborative, evenhanded approach to pushing the RCWs along in favor of all producers the future.
If a Washington brewery wants minors on the premises, what does it need to do?
The question comes up quite a bit. Can families spend time at a brewery? We’ve seen kids at breweries, but is it legal? Can we get into trouble? As the law and regulations stand right now, the answer is fairly straightforward.
First things first. Federal laws and regulations don’t have a say. So, we don’t need to worry about the Alcohol Tobacco Tax & Trade Bureau (TTB) when thinking about minors on a brewery premises. TTB cares about the premises layout, a lot. But they don’t dictate who comes onto it.
The state perspective, however, does matter. Here in Washington, we have the Revised Code of Washington (RCW) which includes law created by our legislators. We also have the Washington Administrative Code (WAC) which includes regulations. The Washington State Liquor and Cannabis Board (LCB, formerly the Washington State Liquor Control Board) is the regulatory agency that creates the relevant regulations for the alcoholic beverage industry here.
Between the RCW and WAC, here’s what we have. The base license to operate a brewery in Washington State is the Microbrewery License or the Domestic Brewery license, depending on your volume of production. For most reading this, the Microbrewery license applies (60,000 bbl annually).
The base license is treated as a non-retail license. That is, licensees—those who have the licensee—are not treated like “retailers.” This is the case, even though we all know breweries in Washington are allowed to sell beer at retail, just like retailers.
Importantly, though, there is no age restriction imposed at a non-retail premises. Therefore, when a Washington brewery uses its built-in retail rights—under its “non-retail license”—the Washington brewery can allow families and minors on the premises. Of course, the brewery can’t serve alcohol to those minors. And best practice would be to have prepackaged snacks available.
Can a brewery obtain a retail license to supplement its non-retail rights? Yes. But at the location licensed with the retail license, the brewery is subject to food minimums or age restrictions. Retail licensees do have additional obligations to have minors on the premises.
We’ll touch on why a brewery might want a retail license in our next post. As it stands, though, a Washington brewery can have minors on the premises—without burdensome or, truly, any food requirements—so long as the brewery is using its built-in rights to retail beer.
Breweries make beer. Wineries make wine (or, under their license, other emerging products such as cider and mead). But what about the reverse? Can a Washington brewery produce wine, cider, and mead? Or, can a Washington winery produce beer? Can either start distilling? Yes, the entity can do so. But, as you might expect, it’s critical to obtain the proper alcohol licenses to produce beverages in the other product category. Indeed, at both the state (Liquor Control Board or “LCB”) and federal levels (Alcohol and Tobacco Tax and Trade Bureau or “TTB”), different licenses are required to cross over into producing other kinds of alcoholic beverages. There are some facility setup issues to bear in mind when doing so, with separation concerns, but they’re not insurmountable. Indeed, as interest in all kinds of fermented beverages is on the rise, we expect to see more beverage businesses extending their brand into these new places.
Edit (5/9/2015):You all are astute readers, and it’s awesome. Thanks to a comment I received via email from one such reader, it appears there *has* been a tweak to the 25% rule. Although, it seems to be more of a sensical one to help keep taproom managers from breaking out calculators. I’m grateful for the note; and in my laser-like focus on the cider stuff, I didn’t cover this nuanced tweak. See my strikethroughs and underlined additions below; and I’ll be making a new post specific to this change where I also will point out some wonderfully inconsistent quirks in the bill. Look for that in the next day or so. -DT
Guest taps are a great thing. But, what about a cider guest tap in a State of Washington taproom? Can a Washington brewery sell cider? The reality right now is no (but if you can wait until July, I’ll have a different answer…read on).
Today, a brewery cannot legally have cider guest taps unless that Washington brewery is also a restaurant meeting certain food minimums (and even then you need a proper endorsement). This has been a bummer for cider fans of course, and also those needing and seeking to avoid gluten in their diets. It’s also kept beer and cider producers, who share a similar ethos, from doing a bit of teamwork to get presence in the marketplace. Of course, it’s also been an untapped revenue stream for both sides.
In any event, I have some good news for you. This legislative session, we saw House Bill 1342 introduced, which aimed to remedy just that. Thanks to our craft-savvy government, H.B. 1342 swiftly moved through the House and Senate and was recently signed by the Governor. H.B. 1342 not only permits cider guest taps, but it also allows sales for off-premises consumption. So, whether by the glass, growler, or packaged to go, cider has the forthcoming green light at Washington breweries, now with no extra regulatory or food-prep fuss.
When can you expect cider to (legally) pour at Washington breweries? The effective date is July 24, 2015.
If you recall my first post on the 25% rule, you’ll remember that it was a weird rule. Under it, guest taps couldn’t exceed 25% of a brewery’s own on-tap offerings. It sounds great in theory, but the technical wording is actually annoying to apply. To make numbers easy, say you have 100 beers on tap. You could have 25 additional guest taps. Why? Because you have 100, you can have 25 guest taps (for 125 totals taps) because the additional 25 is no more than 25% of your own brands. As you can see, the law was confusing. So confusing, it’s hard to write out here. It would make a lot of sense if you could just count the taps, and not commit more than 25% of those taps to guests. For example, have 100 taps? Great, you can have 25 of them as guests—and that’s what I believe House Bill 1342 has done, even if it perhaps wasn’t its main intent.
Here’s the relevant part of H.B. 1342 with respect to this point:
(3) Any microbrewery licensed under this section may also sell from its premises for on-premises and off-premises consumption:
(a) Beer produced by another microbrewery or a domestic brewery ((for on and off-premises consumption from its premises)) as long as the other breweries’ brands do not exceed twenty-five percent of the microbrewery’s on-tap ((offerings of its own brands))offerings; or
(b) Cider produced by a domestic winery.
So, what’s up with these changes? A couple of things. First, it becomes notable that if you have cider on tap, it’s a part of your “on-tap offerings”, so having cider on tap becomes part of your offerings for the purposes of your 25% calculation. Maybe that’s the only thing the law was written to do. I’d like to believe, though, that it was also intended to eliminate the weird calculation problem above. Even if not, it appears to do so. Read the excerpt again. You can sell beer produced by another brewery, as long as guest taps don’t exceed 25% of your on-tap offerings. You can’t commit more than 25% of your total tap share to brewery guests. Interestingly, though, the law doesn’t say split about restricting your cider offerings. I’ll report separately about that (as well as another implication about the 25% rule I’d like to note…so stay tuned if you’re into this stuff).
Whatever the case, House Bill 1342 is a bit of a win for anyone who (1) doesn’t want to break out the calculator to compliantly allocate guest taps and (2) wants to allocate a bit more to guest taps. Let’s apply it. Under the new law, it seems that if you have 100 taps, 25% can be guests. So, 75 of them must be your beer or ciders, and then 25 can feature your favorite third-party breweries. Compare this to the old setup. Let’s say you had 75 of your own beers on tap. The old law said guests couldn’t exceed 25% of that. We know that 25% of that is 18.75. So, they compare this way:
Compliant Under New Law: 75 house taps or cider taps, up to 25 guest taps.
Compliant Under Old Law: 75 house taps, 18 guest taps.
Clear as mud? I’ll follow up soon to cover this, and a few other notable notes.
Last, bear in mind that H.B. 1342 also was specifically focused on getting cider flowing, and did nothing (but pave the way for the bright craft future) to get wine flowing at a non-restaurant microbrewery with a proper wine endorsement. In any event, it still counts as another win for the Washington beer industry, and our kindred cider-producing spirits. Though, speaking of spirits…well, we’ll leave that for another day. Here’s a link to the passed bill.
Are guest taps legal at Washington breweries? If you’ve been on a brewery crawl here in the evergreen state, you know the answer has to be yes. But, are there any restrictions on what a Washington brewery can pour at its taproom? Let’s dig in.
In Washington, we’re lucky to have a fairly de-regulated market. Just look at some of the Southern states, for example (where in Alabama homebrewing only became legal in 2013, sheesh). However, it’s not a free-for-all as far as guest taps are concerned.
In Washington, the on-point law can be found in RCW 66.24.244. It provides that any properly licensed microbrewery can sell beer produced by another microbrewery (those on the craft side) or domestic brewery (the big guys), but with one major caveat. The guest taps cannot exceed “twenty-five percent of the microbrewery’s on-tap offering of its own brands.” That might seem straightforward, but let’s break it down.
“Any microbrewery licensed under this section may also sell beer produced by another microbrewery or a domestic brewery for on and off-premises consumption from its premises as long as the other breweries’ brands do not exceed twenty-five percent of the microbrewery’s on-tap offering of its own brands.”
Understanding the Washington Brewery 25% Guest Tap Rule:
Under the microbrewery license, standing alone, a brewery can only have beer guest taps. Not wine, not cider, not mead. The rule only applies to beer.
The 25% rule is clear, but its application may not be. It’s easiest to break it down by using a number. You might read the 25% rule and think it’s simple. Say, I have 20 taps. A quick read may suggest to you that 25% of those can be guest taps. So, then, fifteen of my own beers and then five guest taps—75%/25%, right? It’s actually a little different. What the law says is that a microbrewery can’t exceed 25% of the brewery’s own brands. So, if you have 20 of your own beers on tap, then you could have an additional 25% allocated to guest taps. That’d be 25 total taps. 20 of your own beers, 5 guest taps. Important distinction. So, if you only had 10 total taps, no more than two could be guest taps.
You probably caught it in the read through, but one last note. The law permits on-premise sales and off-premise sales, too. So, the law gives Washington breweries the green light to fill growlers from guest taps as well.
Ultimately, I love a good guest tap. And, I love that this industry is so supportive of one another that guest taps are a mainstay. The Revised Code of Washington, as applied by the Washington Liquor Control Board, ensures that Washington brewery guest taps are alive and well throughout the state. However, the 25% rule prevents a Washington brewery from, say, operating a full-fledged beer bar, while only dabbling in its own on-tap offerings. (Which, for me, is a bit of a bummer. I’d love to see a nano get rolling as a great beer destination—a fun atmosphere, an awesomely curated selection—then transition over into a bit more brewing. But, alas, that’s not the law.)