SB130 & AB341 Facts
The passage of SB130 – would result in a retail limit of 10,000 barrels and an overall limit of 30,000 barrels.
The 10,000-barrel cap answers the argument that a big brewer might come in and skirt the three-tiered system, everything above this must be sold through the distribution network
Compared to other states, Nevada has some of the most restrictive laws regarding production limits that force closure of a taproom. Of all the western states, only three have similar restrictions forcing a brewer to close operations to the public when certain production levels are met; Arizona (250,000 barrel cap), Idaho (30,000 barrel cap) and Nevada (15,000 barrel cap). Washington, Oregon, California, Montana, Colorado, New Mexico, and even Utah have no restrictions that force a brewery to close a taproom if an arbitrary production limit is reached.
- 250,000 Arizona
- 30,000 Idaho
- 15,000 Nevada
Nevada’s brewpubs generally have capacity well beyond what is sold on site. Any excess beer produced must be sold to a licensed wholesaler to be sold to restaurants, retailers, etc. Nevada’s breweries and brewpubs cannot sell directly to restaurants, retailers, or to the public except as allowed by the current brewpub law. The business plan of many of Nevada’s brewpub licensees is to produce most of their product for sale in the marketplace via a licensed wholesaler (80-85%) and to use their onsite tapping room or similar pub facility to sell to the public at their brewpub bar, promote their brand, offer tours, sell related merchandise, test out experimental recipes, etc. In a fair market place, a manufacturer should not be constrained by a production limit in any legitimate business in the state of Nevada. The production limits give advantages to brewers in other states and other countries that do not have such restrictive laws.
Nevada brewers employ lots of people. Since we make small batches without much of the automation that the large brewers use, we employ many more Nevadan’s per barrel, per six pack or keg than the large brewers do. Craft breweries create good jobs for Nevadans and would like to hire more.
Examples where service of alcoholic beverages to the public has been successful for all parties are plentiful:
- The wineries in Napa Valley are a great tourist attraction, generating huge income and taxes for the state of California. It is a major branding resource for the wineries as fans are able to taste the wines and then continue to buy them when they return home. Fans flock to Colorado to visit some of the beautiful breweries such as Avery’s new facility. Avery is able to test new batches on these visitors who are thrilled to sample them. If these states had production restrictions like Nevada, this would not be possible. Encouraging brewers to manufacture and sell more beer outside of our state enhances Nevada’s reputation, awareness and increases pride, thus enhancing tourism and other positive economic forces. While many brewers might not be at this limit now, curbing the right for them to grow makes no sense in a vibrant economy.
- Nevada is one of the 13 or so states that require all of our off-premise beer to be sold through a licensed distributor within the state of Nevada. This would not change and we are not advocating for self-distribution. It does nothing to change any part of the three-tiered system in regards to excess production because it still goes through a distributor.
- Since the brewer pays NV excise taxes directly to the state, there is no change in that program and the distributor has no obligation to collect taxes. They do collect taxes and pass them on to the state for out of state producers but not Nevada brewers
- Should a brewery wish to grow and reaches this level, then the choice would be to obtain a “brewery” license, close the bar and/or restaurant, lay off staff and try to make it as a wholesaler or move to any other state and open the brewery where the laws are not as restrictive.
The passage of AB431 - Will no longer limit brew pubs to two locations, giving them the potential to open an unlimited number of locations statewide. The bill also raises the amount of beer craft brewers can make from 15,000 barrels to 40,000 barrels per year and ups the retail limit from 2,000 barrels to 5,000 barrels a year.