Some Breweries Becoming Non-Licensed Bars

By Beacon Staff

In Montana all taverns are licensed for the retail sale of alcohol, with different privileges available depending on the license held. Breweries in Montana are licensed as beer manufacturers. Since 1999 breweries have been allowed to sell samples of their beer through a special exception to the licensing requirements. Tavern owners across Montana helped support this special exception for Montana’s small breweries so that they could introduce people to their products and develop a market for them. We continue to support this special exception for that purpose.

However, something has changed in Montana in recent years. Some breweries have begun to operate their sample rooms in ways that are virtually indistinguishable from that of a bar. These bars take up more space than the brewing operations. They may have pool tables, juke boxes and sometimes cover charges just to get in the door. They look and feel like nearby licensed establishments.

The shift in market focus of these breweries is clear. Some of these breweries sell all, or nearly all, of their production through their sample rooms. Their focus is on the retail sale of alcohol, not manufacturing. Just a few years ago, we would see breweries with a small sample room attached; now we see sample rooms with a small brewery attached. This retail focus is an abuse of the sample room special exception.

The market has changed in ways that the licensing system should catch up with. The Montana Tavern Association suggests the following change to the licensing system: Breweries that want to operate as bars should be allowed to. They should, however, have to comply with the same regulatory and licensing requirements as those that are currently in that retail market.

If you want to follow our proposal more closely, it is currently LC 1429 in the Montana Legislature. The bill proposes that the sample room special exception is not a retail license. It is a privilege to retail a limited amount of beer production. Those breweries that want a retail-focused business will need a retail license. Breweries that have a manufacturing and distribution focus are not impacted.

The bill maintains the low barriers to entry that has allowed breweries to flourish in Montana, and it gives existing breweries years to adjust.

Our proposal does not dictate or change in any way the amount or type of beer brewers can brew. In fact, our proposal has nothing to do with the manufacturing of beer in Montana. Our proposal relates only to the retail sale of beer, and our thesis is if you want to be a retail focused business you need a retail license, just like every other beer retailer.

Some people will certainly argue that the current licensing system in Montana is broken and should be scrapped. However, if we look to the other states to find a better way, we will find 49 other imperfect systems. No state has a monopoly on the “right way” to regulate alcohol sales. The system we have is ours. It was created in Montana by Montanans. Montana’s tavern owners simply participate in the current system, and they ask that if others are going to participate too, they should have to play by the same rules.

JoAnn Fuller is the Montana Tavern Association president.

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