At the beginning of the session, the Alabama Brewers Guild released a comprehensive reform agenda called Brewery Modernization 2.0. The state legislature passed two key provisions of this agenda during the 2019 regular legislative session, and the Guild is committed to continuing to work to bring common sense reform to the alcohol regulatory system in Alabama.

Brewery Modernization 2.0 is an ambitious reform package designed to “clean-up” the law to better account for the current state of the industry and to allow continued growth for the craft brewing and distilling industries in Alabama.

Although several provisions of the agenda were not fully addressed by the legislature this year, lawmakers did give final passage to two key parts of the plan. The Guild continues to advocate for more reforms to benefit the craft beverage industry and consumers.

ABC excise tax reform

The legislature gave final passage to SB404 on Wednesday, May 29. A key provision of this bill fixes the way excise taxes on beer are assessed in brewery tasting rooms throughout Alabama. This was a major issue identified by Guild members. If signed by Governor Ivey, the bill makes reporting much simpler for the brewery while also making it more accountable to the ABC Board for tax compliance.

Breweries owning brewpubs

SB404 also allows small brewers to own satellite brewpub locations in Alabama. Consumers are increasingly interested in the type of experience provided by a brewpub, and this legislation allows brewery owners the ability to invest in this type of establishment.

The bill specifies that a brewpub can only sell beer it brews on-site or that it purchases from a wholesaler, and it prevents a brewery owner from using the law to “piggy back” into other retail-class establishments. These caveats preserve the three-tier system in Alabama.

Looking ahead

The legislature failed to address brewery-to-brewery transfers. The Guild believes that consolidation will increase in the next few years as local craft breweries acquire or merge with other local breweries. A major component of Brewery Modernization 2.0 is to allow transfers of beer between breweries under common ownership.

The legislature also failed to clarify the law around how the three-tier system applies to non-profit participation, contract brewing, and more.

There is a real need for clarification in these areas, and the Guild continues to advocate for better beer laws in Alabama.