future coalition members
Yesterday afternoon a ragtag bunch of scrappy new brewers and seasoned veterans gathered over pints and peanutsat the Lucky Labrador Brew Pub on SE Hawthorne Blvd in Portland to discuss the formation of a new group called the Oregon Small Brewers Coalition. With 501(c)3 non-profit status, this new loose gathering of representatives may become responsible for how we regulate small brewers in Oregon and pioneer new legislation making our state a shining beacon for the rest of the nation.
While Oregon’s brewery trade organization, the Oregon Brewers Guild, is already considered one of the most influential in the nation, I learned there are some feelings that a separate group is needed to represent small brewers as well as the guild supports large craft brewers. More of a lobbying group than a trade group, the Oregon Small Brewers Coalition is so new it does not yet have any official board members. It has been pioneered by Art Larrance, founder/owner of Cascade Brewing and the Oregon Brewers Fest. Gary Geist, owner of Lucky Labrador and a small army of brewpubs, was also a vocal member and supporter, with additional outspoken support from Van Havig of Gigantic Brewing and Steve Moore of 13 Virtues Brewing (formerly Philadelphia’s Steaks and Hoagies).
At the first official meeting, the primary subjects were how the new coalition would limit/establish its member base and the requirements for what separates them from the Oregon Brewers Guild and important issues they wish to address. Among those issues first brought up were the ability for small brewers to more easily jump from one beer distributor to another and for them to sell directly to consumers through their websites via out of state shipping. The 20-odd turnout of brewers and brewery representatives had members I counted from Hair of the Dog, North Rim Brewing, Lucky Lab, Ground Breaker, Fearless, McMenamins, 13 Virtues, Cascade, Leikam Brewing, Montavilla Brew Works, Heater-Allen, Vertigo, Gigantic, Ex Novo, Ecliptic, Fat Head’s, and Max’s Fanno Creek.
Oregon beer pioneer Art Larrance, who called this meeting to session, talked about Cascade Brewing’s success and difficulties with online and direct-to-consumer beer shipping. In the first quarter of 2014, he said Cascade shipped $123,000 worth of beer before recently stopping due to state regulation. In this state cider and wine have no legal hurdles to shipping, while beer must be licensed, signed, and shipped from distributors licensed in each state in which they sell. Cascade has temporarily stopped shipping beer due to issues like being fined $1,000 by authorities in North Dakota. Art Larrance has introduced a bill in Oregon that has passed the Senate and is now making its way through the House that would change the Oregon law on brewpub production limits that allow them to sell directly to the consumer and retail. Currently the Oregon law is that a brewpub cannot produce more than 5,000 bbls if it wishes to sell directly to retail rather than go through a distributor. Art wants to raise this limit to 7,500 barrels. This also raises the issue of how much distributors have a foothold in how beer gets to market; raising the direct to retail limit would allow more breweries to avoid signing contracts with distributors that are difficult to escape. As Lucky Lab owner Gary Geist argued, “if you’re under a certain amount you should be able to jump from distributor to distributor to create some competition.”
An issue of contention was how larger brewers play into this whole process– should they be allowed in as members of the Oregon Small Brewers Coalition, and what the cutoff point be for size? At this point the consensus is that only brewers who make under 15,000 barrels of beer a year will be considered small brewers. However, the group will allow a brewery in that makes that much or more collectively, but less at individual locations. The prime example of this is McMenamins Breweries; the group as a whole makes more than 15,000 barrels a year, but that amount is split up between a dozen breweries or something like that, with no one brewery making nearly that much. The subject was addressed that the majority of the Oregon Brewers Guild board is made up of large brewery representatives who can afford to assign and pay staff to attend meetings and does not necessarily care about the issues that are facing smaller brewpubs. The argument was also made that the OBG is not against small brewers but is reluctant to weigh in on contentious issues that don’t have broad support, and this is a niche the Oregon Small Brewers Coalition would serve. By forming their own lobbying group– backed by Art Larrance and funds from Cascade and the Oregon Brewers Festival for its first year–the OSBC wants to attempt to change law and fight recent expensive new regulations on brewers. While the OSBC gathering was supportive and positive on the OBG, some did voice concerns about future issues. “We are going to come to a crossroads that puts us at odds with other breweries and our guild,” said Ron Gansberg, Brewmaster at Cascade Brewing. While Steve Moore of 13 Virtues made an argument that large brewers should be allowed spots on the OSBC board, there was skepticism that does reveal an underlying current of the sense of competition among a small contingent of brewers. Rick Allen of McMinnville’s Heater-Allen Brewing said in reference to having large brewers on the board, “if I wanted to knock out competitors I would make it as complicated as possible,” referring to new city rules on sewage and grain dust that are making it difficult for small brewers. Rick referenced Tillamook Creamery as accused of encouraging complex regulations that knocked their competitors out.
Despite Oregon’s claim to fame as Beervana and one of the least restrictive states on craft brewers, the city of Portland has been making it increasingly difficult for breweries with absurd new regulations. New concerns about brewery wastewater have led to requirements of putting in entire rooms with access to the water and sewer supply for testing, even though this takes tens of thousands of dollars for small brewers and is reported to have never been used in the last year. Perhaps even larger is an issue with grain and mill rooms, with inspectors suddenly deciding they are death traps and must require explosion proof insulated rooms; the inspectors are also deathly afraid of grain silos. That’s the sort of decision that makes it difficult for a small brewer to grow, and results in the loss of thousands of dollars per year in savings brewers can achieve with a silo.
New inner southeast Portland brewery Leikam Brewing co-owner Sonia Marie brought up that their brewery, built in a separate building in their backyard to avoid some city regulations, cannot sell beer directly at farmers markets. In getting licensed as a “Brewery” not a “brewpub” because they could not be a brewpub in their residential neighborhood, they are not allowed that permission. Meanwhile, they have to pay twice as much for their license ($500 rather than $250 for a brewpub), and a winery or a cidery in the same position would not have the same restriction for off-premise sales.
The conclusion can only be that Portland especially but also all of Oregon needs its own small brewery lobbying group and that the first meeting of 20 or so representatives could claim 100 members in a short time. There are also many conflicts on the horizon but before that they will have to elect a board to address them. It’s going to be an interesting project to observe.