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When do home brewers need a license to brew?

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Blog 9

Most home brewers know the limits on what they can brew for their own consumption – 100 gallons per calendar year if there is one adult in the household and 200 gallons of beer if there are two or more adults residing in the household. Seems like a simple rule, but it is important to know who the federal government deems to be an “adult.” First, don’t assume you can produce 200 gallons if the only other adult in your household is an 18, 19, or 20 year old. While the federal government says that a person counts as an adult under this rule if he or she is at least 18, the rule is limited where the minimum age for the sale of beer is higher. The reality is that virtually every state sets the age of 21 as the minimum age at which an individual may purchase beer. This should be considered when accounting for the total allowance for your household.

The Brewers Association has declared that the craft brewing world is growing so fast that it is undergoing a revolution. The Craft Brewers Conference held in Washington, D.C. in just a few days, starting March 26, 2013, is a good way to see how the industry is evolving. With thousands in attendance, there will be no doubt that many a home brewer will be looking to take information back home to share with local organizations that hold contests, competitions, tastings, and exhibitions that make everyone’s local beer world a better place.

Some home brewers have shared concern about local activities and whether or not specific activities violate the personal consumption rule. A key component of avoiding a violation of the rule is that the personal production never be sold. This part of the rule is pretty straightforward. With an interest in sharing their craft, some home brewers participate in events where their beer may be judged or offered for tastings. Again, there is no problem with this type of activity.

There are even instances of home brewers or others coming together to share their knowledge and provide certain types of assistance that do not call for a brewery license. These operations, known as “brew-on-premises” operations are situations where a business or individual provides space and equipment to the public to brew and bottle their own beer. It is very important to note that State and local law could affect one’s ability to operate a BOP, so even if your activities fall within these listed actions, you still need to check your local rules.

According to the federal government, BOP’s, and their employees, may furnish space, brewing equipment, ingredients, and advice or expertise about brewing. Unfermented wort may be furnished to the customers of a BOP. Further, it is ok for the BOP to assist with movement of beer containers, provide cleaning and maintenance of equipment, prepare and provide an environment that is climate and temperature controlled and assist with disposal of spent grains or waste.

While the federal government is ok with a non-brewery permit holder providing the above advice, the government believes that the BOP crosses the line and must obtain a permit if its employees assist with production, storage or packing of beer by fermenting mash, adding sugar or other ingredients to the beer, filtering or bottling the beer or providing physical assistance in the production, tank transfer, racking, or kegging of the beer. Further, the BOP would need a license if it provided non-tax paid beer to customers or prospective customers for sampling.

These rules create a fine line between operating as a brew-on-premises operation and a brewery. The services of a BOP may very well be the objective of an advanced group of home brewers or it may be a step just before a fully operational brewery. Either way, it is possible to structure the operation to make sure that the expectation of the government relating to brewery operations and excise tax requirements are followed and the craft of brewing is an enjoyable and educational experience for all involved.

We're Here to Help

Dear friends in the alcoholic beverage industry,

As we as an industry, nation and planet collectively try to navigate this unprecedented period the coronavirus has brought us, We’d like you to know that we at Craft Beverage Consultants (the other CBC!) are here to answer any question you may have (or not know you have) about not just surviving this time but positioning yourself to thrive as soon as social distancing measures allow your business to function at full capacity again.

If you schedule a free 60-minute phone or video conferencing consultation with me or any of my 11 highly specialized colleagues, we’ll help you figure out any of your immediate and/or longterm business needs, or “everything but the staffing,” as we like to say. We’re not high-pressure sales kind of people, especially these days, so you don’t have to worry about fending off annoying pitches. Make an appointment on our website or Facebook page, or just call us the old-fashioned way at 314-768-0220.

Our experts have a combined 150 years in the alcoholic beverage industry, with deep knowledge in everything from sales and distribution, production, and regulatory compliance to marketing, package design, event planning, IT, (social) media, hospitality, and even values-based executive coaching. 

For example, we can coach you through this season when chain accounts have canceled their spring, in some cases, fall resets and distributors have drastically cut orders. Our director of business strategy and compliance can save you money – now – on excise taxes, caution you to avoid naming your beers in ways that risk alienating your buyers (Wuhan Wheat? Coronavirus Cream Ale? Groan. No.), and secure TTB approval for the tastefully named beers you do make. Our creative director and web team can get your e-commerce site up and running and launch a social media campaign that keeps you top of mind for current and future customers. Our director of storytelling can put you in front of the press so you can tell your story to your community. 

Once you’re ready, we can look forward together. Now is the time to talk about post-virus. We all suspect the legal landscape to look different. But how? And how do you prepare yourself in a way that positions you to charge out of the gate ready to maximize the potential and profit of whatever the “new normal” turns out to be? Please get in touch so we can talk about it. 

CBC’s roster includes local and regional clients like Epic Brewing, Logboat Brewing, Piney River Brewing, SudWerk Brewing, Waves Cider and Common Cider Company, just to name a few.  The agency was founded in 2004 by Jacob and Beth Halls, formerly known as Convergence Consulting; Rick Laxague, joined as a partner in charge of sales, marketing and distribution consulting in 2019. 

Rick hase close to 20 years of experience, a bulk of which was with Crescent Crown Distributing in Arizona. His last role there was Area Sales Manager for the dedicated craft beer division, coaching and leading a sales team to be nationally recognized. In early 2014 Rick helped take a regional brewery national as their Director of National Accounts and increase that segment of their business from 30,000 cases to almost 300,000 cases in two years, an increase that equates to $4.8 million in IRI dollar sales. 

Co-founder Jacob Halls brings 17 years of experience in regulatory compliance, business strategy, marketing and craft brand management to the company. In his former position as craft brand manager for the N.H. Scheppers Distributing Company in Columbia, Missouri, Jacob helped lead his team to winning the 2016 Distributor of the Year award from New Belgium and to a nomination for the Brewers Association’s Distributor of the Year award. Jacob is also the founder and director of the South East Craft Beer Fest and several other industry specific charitable event marketing festivities. Beth Halls is Director of Business Operations and Coordinator of Charity Operations for the festivals and events run by CBC, such as the South East Craft Beer Fest, MO Bacon & Bourbon, and many more. 

Again, please reach out to us for anything.  CBC can be reached at (314) 768-0220 or at craftbeverageconsultants.com.

We look forward to meeting/talking soon.

Sincerely,

Rick Laxague, Jacob Halls, and Beth Halls