A bill introduced last week in the Michigan House of Representatives could double the amount of beer that state brewers are allowed to self-distribute. On January 16, republican State Rep. Pauline Wendzel proposed House Bill 5343. More than 50 breweries and two distributors backed the proposed legislation, which would expand the amount of beer individual breweries are allowed to self-distribute.
“It’s exciting to see our 12 months of hard work come to fruition,” says Dayne Bartscht, founder of Eastern Market Brewing Co., who spearheaded the 2019 campaign. Bartscht, in partnership with several area brewers, launched an online petition last January that quickly gained support.
If passed, House 5343 would add an addendum to the Michigan Liquor Control Code of 1998, which established the Michigan Liquor Control Commission, outlined the agency’s role, and established regulations for the alcoholic beverage industry. Currently, brewers are legally allowed to distribute and deliver up to 1,000 barrels of beer per year to other taprooms, bars, and liquor stores. After that limit is reached, they must sign a contract with one of the state’s recognized independent distributors to bring their products to market. The proposed legislation would increase that limit to 2,000 barrels.
Although Michigan ranks fifth in craft beer production, it differs considerably from the top four states in the self-distribution allowance. California, New York, and Washington all allow brewers to self-distribute up to 30,000 barrels per year; Colorado allows up to 10,000 barrels. Supporters of the legislation argue that it will allow local Michigan breweries to better compete in the craft beer market.
During 2019, metro Detroit saw several local breweries close their doors. At least one, Axle Brewing Company, cited challenges resulting from the limits of self-distribution as a major barrier to becoming profitable.
“Even with this increase, Michigan still has the lowest self-distribution limit of any state that allows breweries to sell and deliver their beer,” Bartscht says. “This change is an incremental step in the right direction as it will give breathing room to breweries like us nearing the 1,000 barrel limit. However, I have a feeling the same conversation will come up again in the next year or two.”
Paul Quasarano is the president of Eastown Distributors and supports the bill. The company distributes several Michigan products, including beer from Kuhnhenn and Motor City Brewing Works, as well as Miller and Coors products. “We’re proud to work hand-in-glove with craft breweries large and small from across Michigan to help them succeed today and in the future,” Quasarano says in a statement to Eater. “We support legislation to increase the amount of beer small craft brewers can self-distribute so they can grow their brands locally before expanding to other markets throughout Michigan.”
State Rep. Wendzel, who introduced the bill, represents District 79 on the state’s southwest side. “Doubling the self-distribution limit and exempting taproom sales will allow brewers to grow their business to a point where signing a distribution contract makes sense,” Wendzel says in a statement.
The legislature is expected to gain bipartisan support and be voted on in the coming weeks.