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Restrictions Loosened for Beer-Brewers, Retailers

Tennessee brewers can now join fellow suds-makers in surrounding states in producing higher gravity brews without the need for a specialty license under a law passed during the 2014 session.

However, due to pressure from liquor retailers — in part related to the political compromise that helped win passage of legalized wine-sales in grocery stores — non-spirits retailers and distributors won’t have the same allowances as brewers until 2017. That means consumers in search of higher quality, high gravity beers will need to continue to patronize spirits establishments.

The law, HB0047/SB0289, was sponsored by State Rep. Ryan Haynes, R-Knoxville, and Murfreesboro Republican Sen. Bill Ketron. It altered the definition of beer and high alcohol content beer, as well as revising some of the language dealing with high gravity beers. Prior to the law taking effect today, Tennessee had the most restrictive cap on the amount of alcohol beer could contain and still be sold without a liquor license — five percent by weight, or 6.25 percent by volume. Alabama’s beer cap, on the other hand, is at eight percent by weight. Beer with an alcohol content of eight percent by weight is equivalent to 10 percent by volume.

“This will raise the cap on beer from five to eight percent, it’s going to allow brewers to sell the beer at their brewery taprooms and for off premise consumption,” said Haynes said when the House approved the measure just three days before the legislative session came to a close. “It will clarify the law that allows liquor retailers to sell high gravity beer growlers. And this will also allow high gravity beer to be sold in grocery stores.”

The bill passed the House April 14 by a vote of 72 to 12, with eight members present but not voting. It passed the Senate 22 to seven on April 10. Tennessee Gov. Bill Haslam signed the bill into law May 1.

The change in the state’s definition of brewed alcoholic beverages came about as a result of the “Fix the Beer Cap” campaign, spearheaded by Linus Hall of Yazoo Brewing Company in Nashville.

The campaign to redefine beer was an extension of the successful 2013 Fix the Beer Tax campaign to change the way the state taxed its beer — from taxing it by the cost of production to taxing it by volume like other states.

Hall recently told the Nashville Business Journal that, while his brewing company had a special high gravity brewers license, it wasn’t “economical” for them to brew higher gravity beers, because the market for those beers was “so restrictive.”

Now that the market is going to open up, Hall said he plans to brew up more styles of suds.

The discrepancy between Tennessee’s beer laws and those of the surrounding states even led Sierra Nevada Brewing Company, headquartered in California, to remove Tennessee from their list of possible locations for opening a satellite brewery. Sierra Nevada instead chose Asheville, N.C., for its expansion.

But while craft beer producers are now able to brew up higher alcohol-content craft beers with less regulation, non-spirits retailers and distributors have another two-and-a-half years before they can join the party. The portions of the law affecting them won’t be in effect until January 1, 2017.

Hall told the NBJ in his interview in late June that the reason for this was that although lawmakers were supportive of the change, they didn’t want to see those changes occur any sooner than the changes from Wine in Grocery Stores.

Wine in Grocery Stores goes into effect today, as well, but only the portions of the law allowing liquor stores to stock beer, food and accessories. Liquor stores will also be able to sell high gravity beer growlers.

However, the two-year wait for the convenience to be able to purchase wine in your local grocery store instead of searching for a wine and spirits retailer may prove too onerous for some Tennessee consumers, and Lt. Gov. Ron Ramsey has mentioned that lawmakers may revisit “Wine in Grocery Stores” next year.