Microbrewing Commercially
Two of my childhood friends have started microbrewing and have a small following in their town. They were asking me if I wanted to join in since I have startup experience. I am putting together an LLC giving us all equal membership (usually how I start a new company). But are there any laws/regulations around microbrewing that will stand in our way?
We are in Texas, USA. Is taking it across state lines illegal? While we are getting the flavor out locally I'm looking at other places to try and expand to, but I don't know the laws around distributing.
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You definitely need to find out your local laws and federal laws. Someone I know is making and selling beer here in NY. He is limited to selling only through bars and distributors - he can't even have a tasting room in his "brewery" yet. Good luck. – Tim J 12 years ago
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@TimJ - What was the reason he is limited to bars and distributors? No Alcohol License? – Jeremy Boyd 12 years ago
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I do not know the reasons. I only know he cannot sell directly to the public. Alcohol distribution laws are convoluted, inconsistent, arcane and illogical. You need to do some research - and this forum is not really the right place to get those answers. – Tim J 12 years ago
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I hate to say it but this isn't a question that fits this forum! A Microbrewery isn't a start up, its a small business selling beer. Probably should vote to close. – Tim 12 years ago
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From Wikipedia so taken with a grain of salt: Startup companies can come in all forms, but the phrase "startup company" is often associated with high growth, technology oriented companies. Investors are generally most attracted to those new companies distinguished by their risk/reward profile and scalability. That is, they have lower bootstrapping costs, higher risk, and higher potential return on investment. Successful startups are typically more scalable than an established business, in the sense that they can potentially grow rapidly with limited investment of capital, labor or land. – Tim 12 years ago
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Your question is obviously relevant but this forum might not be the best place to seek advice. We're more technology driven in terms of Start Ups. Just my 2 cents worth and I am always open to being corrected. – Tim 12 years ago
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By the way - to the OP - you might want to check on here: http://homebrew.stackexchange.com/ – Tim J 12 years ago
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I would vote to close this. Not because a microbrewing business can't be a startup, but because the actual question isn't startup related. The question is "are there any laws/regulations around microbrewing that will stand in our way?" It's a question about very specific local laws, and it is unlikely someone here will be able to provide a reliable answer. – Zuly Gonzalez 12 years ago
5 Answers
I would honestly speak to a lawyer, alcohol like firearms and cigarettes are heavily moderated and there are laws to abide by much like anything really. A good friend of mine just started a bar and has his own microbrew's (brewed off site at an already accredited 3rd party microbrewery which will work with you to create your own beers), it was as simple as applying for a liquor licence and someone coming out & inspecting the premises, he was only selling it in his bar and nowhere else though.
My friends situation won't be the same as the one your friends are in, but legally distributing your own brews shouldn't be a problem if you get the appropriate licences and pay the appropriate state taxes, I would say unless this is going to be a big operation you might end up wasting money in taxes and licences all for nothing. This link here is has a list of criteria for getting a licence to start a winery or brewery in Washington State, so take it with a grain of salt but use it as a guide to kind of shed light on the situation.
Perhaps try this site:
http://homebrew.stackexchange.com/ And did you try google?
http://www.brewersassociation.org/pages/government-affairs/self-distribution-laws http://www.statutes.legis.state.tx.us/?link=AL http://www.brewtiful.com/?p=219 http://en.wikipedia.org/wiki/List_of_alcohol_laws_of_the_United_States_by_state http://en.wikipedia.org/wiki/Three-tier_%28alcohol_distribution%29 http://www.tabc.state.tx.us/faq/general.asp
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This should never have been asked or answered on this site. – Tim 12 years ago
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this question belongs on http://homebrew.stackexchange.com/ not here and you should know it. – Tim 12 years ago
It's possible but you need the correct licenses. I suggests you contact a lawyer who can give you an estimate of the cost and feasibility.
I'm not a lawyer, but as a piece of advice: you need to be aware of all the Alcohol Franchise Laws and state laws of distribution. For example, a brewpub/restaurant can get licensing to serve, but not to distribute to retailers. Distribution and their support of your beer is the largest hurdle for a small brewery's success. If you're considering a startup in a microbrewery, you should check out Beer School by Steve Hindy and Tom Potter. It's a business prospective of how they both started the successful Brooklyn Brewery beer company and all the pitfalls of the business.
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The regulations are dependent on the state they operate in. – Tim J 12 years ago
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@TimJ And actually possibly county or town too. – Karlson 12 years ago
I own New Republic Brewing up the road from you in College Station. We are a nano-brewery founded in 2010 and are in the process of raising private equity to expand to a 10 BBL system - a microbrewery. My answer is about five months late, so I hope you made progress.
To answer your question: there are a lot of inconvenient laws standing in your way, but all are surmountable. AFAIK Texas does not prohibit you from selling your beer out of state. However, there may be restrictions in your target state. My advice to you is concentrate on your Houston market first, there are a lot of thirsty people there.
Now for some general advice. IANAL The first decision to make is whether you want to be a brewpub or a production brewery. Brewpubs can sell directly to the consumer, but only on their premise. They may not sell into the distribution chain. Breweries must distribute their product to a retailer and cannot sell to the end consumer. Production faculties may self-distribute up to 75,000 BBL each year, however most opt for a distributor long before that.
We are a microbrewery, so much of the following applies to that route.
Talk to your city early. Houston is notorious for its lax zoning laws, but you will probably run into a myriad of code issues, water treatment the one that comes to mind first.
Find a building with (true) 3-phase power. It will open up more equipment possibilities. Ask your landlord if s/he owns interest in an establishment with a liquor license - it's illegal to rent from such a person.
Feel free to drop me an email or come up for a private tour of our small facility.
--Dean
[email protected]
