09 Feb SB 1030 Passes out of Senate Commerce Committee with a 6-2 Vote

Hundreds Rally in Support of SB 1030 at State Capitol

SB 1030 Passes out of Senate Commerce Committee with a 6-2 Vote

 

(Phoenix, AZ) – A broad and passionate coalition of Arizonans joined Senator Kelli Ward (R-LD5) at a rally today at the State Capitol in support of SB 1030 prior to the Senate Commerce Committee hearing on the proposed legislation.  The bill, supported by the Arizona Craft Brewers Guild, The Beer and Wine Distributors of Arizona (BWDA), and over 7,000 Arizonans who have signed a support petition, would allow craft breweries to grow beyond the current arbitrary 40,000 barrel limit without forcing  them to close restaurants, pubs, or let go employees  as mandated under current law.

 

“Craft brewing is an Arizona success story.  At a time when the rest of the economy was struggling, our microbrewing industry managed to grow 18% per year, creating jobs and helping speed our recovery.  Beer puts people to work, and we should be ensuring our craft brewers have a path for responsible growth instead of a path riddled with arbitrary and punitive regulations,” said bill sponsor Senator Kelli Ward.

 

Late in the afternoon, SB 1030 passed out of Senate Commerce Committee with a majority 6-2 vote while opposing measure SB 1437, supported by the Arizona Wine and Spirits Wholesale Association (AWSWA), was held and did not go to vote.  SB 1030 is a solution both brewers and distributors can support.  It would allow craft brewers to graduate from microbreweries into producers and keep the restaurants and pubs that have been instrumental in growing their business and brand over the years.  Supporters continue to stress that SB 1030 seeks to encourage a pro-business atmosphere for a growing industry, while strengthening the three-tier system. This is evident since microbreweries will be limited to hold a total of 7 retail licenses, while today they can hold an unlimited number.  Additionally, craft breweries producing over the 40,000 barrels would be prohibited from adding more retail licenses or continue to self-distribution unless to their own adjacent retail licenses.

 

During Committee testimony, Andy Ingram, of Four Peaks Brewing stated, “Along with others, I invested everything I had in to a dream of owning a brewery and restaurant.  We are a proud Arizona success story that contributes to our local economy and employs several hundred people.  Now, due to a random regulation, my partners and I have been told we’ve become too successful and must choose between advancing to producer status or keeping over 200 people employed,” he stressed.

 

Conversely, SB 1437 would be detrimental to brewers of all sizes.  “S.B 1437 is a Trojan horse that demonstrates AWSWA’s real agenda – their fear of competition.  It completely rewrites our existing law, turning it into a confusing and contradictory mess that is anti-business and anti-growth for our entire craft industry.  AWSWA is comprised of three mega-sized, wine and spirit wholesalers with market valuations of well over $3 billion each.  Yet, with this legislation, they are purporting to know what is best for Arizona and our microbrewers,” said Rob Fullmer, Executive Director of the Arizona Craft Brewers Guilt, which represents over 57 breweries statewide.

 

Punitive, anti-business regulations in the AWSWA bill include:

 

•             The shutting down of restaurants and retail establishments upon obtaining a producer’s license.

•             The elimination of a microbrewery’s ability to sell beer for consumption at the brewery.

•             The elimination of self-distribution for some of Arizona’s smallest and newest microbreweries.

•             An overall limitation of 160,000 barrels for multiple locations when now microbreweries may build an unlimited amount of 40,000 barrel facilities.  This creates another unnecessary layer of government regulation that requires businesses to incur additional investments of multi-million dollars, and impedes and discourages growth in the industry.

 

In general, AWSWA’s bill is riddled with stifling measures that ensure that the Arizona microbrewery industry lacks all viable opportunities to experience the level of growth seen in other states.  For instance, the intent of SB 1437 is to make it impossible for a business to hold a microbrewery license and producer license, which would stifle growth.   Also, the bill’s intent section significantly impedes the ability for a microbrewery to alter its ownership, or to sell its business.  Any grandfathering rights given to current Arizona breweries are severely limited and will eventually call for the closing of restaurants of Arizona’s most popular breweries.

 

“Today’s vote is a victory for free enterprise, jobs, and microbrewery employees across the state,” said Fullmer.  “SB 1030 is the compromise solution we need to ensure that craft brewers have the opportunity to graduate from microbreweries into produces and won’t be forced to close or sell the restaurants and pubs that are vital to their business and have proven to be instrument in growing the craft brewing industry and creating thousands of jobs across Arizona,” concluded Fullmer.

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