A bipartisan effort is underway to "free the growler" by removing a cap that prevents the state's largest breweries from selling their beer to go in 64-ounce containers.
Minnesota law prevents any craft brewery in the state that produces more than 20,000 barrels from selling growlers. Currently, there are five breweries – Castle Danger, Fulton, Schell's, Surly and Summit – in the state that are prohibited from selling growlers and beer to go from their taproom, while all the others can ... until they get too big themselves.
"It's finally time to 'Free the Growler' and stop punishing five successful breweries in our state while removing a hurdle many growing breweries may face in the coming years," Rep, Jim Nash, R-Waconia, who is the sponsor of H.F. 1050/S.F. 874 that would remove the growler cap, said in a statement. "Beer is bipartisan and we will have bipartisan support on our proposal in the House and Senate.
"We need lawmakers to overcome the resistance to change that has kept Minnesota's liquor laws stuck in the 1940s," Nash added.
GOP and DFL lawmakers along with local brewery owners spoke at a news conference Thursday to announce the "free the growler" proposal, stressing that breweries are local, small businesses that provide jobs and tourism to their communities, helping local economies as well as bringing in more tax dollars to the state.
The growler cap, which is the only such cap in the country, has long been viewed as an arbitrary rule that punishes successful breweries, forcing them to choose to either stop selling growlers or not expand so they can stay under the 20,000 barrels-per-year cap.
The Minnesota Craft Brewers Guild has previously said the loss of growlers can cost a brewery upwards of $300,000. Castle Danger Brewery, which was forced to stop selling growlers in October 2019, saw an immediate 30% decrease in sales from the taproom because of the growler cap, according to the Stillwater Gazette.
Castle Danger owner Lon Larson said in Thursday's news conference that when they had to stop selling growlers, it hurt the community because fewer people made it a point to stop in Two Harbors to pick up supplies from local businesses and a growler, while it also forced them to permanently lay off three people.
Opponents of the cap also say it limits a brewery's ability to test out new beers with consumers, putting them at a "disadvantage" with their competitors in other states (all other breweries in the U.S. can sell growlers), Nash says.
"The ability to sell growlers gives brewers an idea of what customers want and allows brewers to test and innovate," Nash said in a statement. "Some of the most well-known beers from our state – from Schell's Grain Belt Nordeast to Surly Darkness or Todd the Axe Man to name a few – were invested in and made in great quantities due to their copious growler sales. Now we can buy these beers at liquor stores across our state and others.
"Right now, the creativity of these brewers is hampered by an inability to sell growlers," Nash added. "We need to 'free the growler' and end the stifling of creativity of these great small businesses."
Pandemic increased push to 'free the growler'
While there have been efforts to remove the growler cap for years, the COVID-19 pandemic and subsequent state-ordered closures heightened the push to "free the growler" because five Minnesota breweries couldn't sell their beer to go, forcing several breweries to dump their product.
“The pandemic has highlighted the need, even more, to allow breweries in our state to sell growlers,” longtime growler supporter Sen. Sandy Pappas, DFL-St. Paul, said in a statement. “Breweries that have been allowed to sell growlers were able to keep their business from going under amid all the pandemic-related closures. These breweries that were open for pick-up orders kept workers employed, kept revenue up, and moved product off their brewery floor. The growler is the perfect opportunity to help these small businesses remain afloat during these hard times.”
This prompted six Minnesota breweries – Castle Danger, Fulton, Indeed, Lift Bridge, Schell's and Surly – to form the Alliance of Minnesota Craft Breweries to repeal the part of state law that limits growler sales. They spoke at the news conference Thursday in support of the bill.
“There are many breweries across our state, and now more than ever as we work towards recovering from the pandemic, they need our support,” Sen. Karin Housley, R-Stillwater, said in a statement. “Some of breweries send over half of their volume of products to restaurants and bars, but since these businesses have been closed for much of last year, our brewers are operating at a loss. Raising the growler cap would help them make up the loss of sales.”
Will it pass?
The Minnesota Legislature originally set the growler cap in 2013 and told brewers they'd have to return to the Capitol when that limit needed to be raised.
"Year after year, we've come back and have not seen success in moving that cap," Jim Diley, co-founder of Fulton Beer in Minneapolis, said during Thursday's news conference. "The bottom line is we are a family-run, locally-owned group of breweries that are seeking commonsense change."
Proponents of the current growler restrictions, including the Teamsters Union, have expressed concerns in the past that removing the cap would hurt the state's three-tiered distribution system, while others say it could harm retailers.
"We're big supporters of the three-tier system ... we don't want to hurt the three-tier system," Larson of Castle Danger said during the news conference, noting 98% of breweries' beer is shipped through distribution partners to their retail partners.
This proposal would remove the cap altogether, but supporters of the bill note there is already a law that limits total growler sales to 750 barrels a year, protecting liquor stores from being impacted if some consumers choose to buy beer straight from the brewery instead of at the liquor store.
It's unclear if this will be the year that the Minnesota Legislature finally loosens the growler cap. The state of Minnesota does have a long history of moving slowly when updating the state's antiquated liquor laws (remember the years-long battle to allow liquor stores to sell alcohol on Sundays?).
This proposal does have bipartisan support, which is a start. But so did a bill during the December special session, and that bill would have only temporarily removed the growler cap. The proposal wasn't included in a final bill after it failed to pass in the GOP-controlled Senate.
Rep. Nash, Sen. Housely, Sen. Pappas, Sen. Scott Dibble, DFL-Minneapolis, and Sen. Kari Dziedzic, DFL-Minneapolis, all released statements this week in support of ending the growler cap, while Sen. John Jasinski, R-Faribault, and Sen. Michelle Benson, R-Ham Lake, spoke at Thursday's news conference in support of the measure.
The House version of the bill was introduced on Thursday and referred to the House Commerce Finance and Policy Committee.
The bill's companion in the Senate was introduced Thursday as well and was referred to the Senate Commerce and Consumer Protection Finance and Policy Committee.
No hearings in either chamber had been scheduled as of Friday morning.