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Legal View: Craft Beer and Spirits Legislation Helps Brands Grow

By November 29, 2017Connecticut, Top News, Legal Matters

Peter A. Berdon, Esq.

By Peter Berdon, Esq.

Over the past five years, the number of Connecticut beer manufacturers has increased more than 300 percent, and fewer than a handful of distilleries has grown to nearly two dozen. To support Connecticut’s burgeoning craft industry, Connecticut’s Legislature adopted two significant legislative initiatives: the Farm Brewery Permit, PA 17-160, and the Farm Distillery Permit, 17-232. Both bills enhance the consumer experience and support the development of Connecticut craft products.

Farm Brewery Permit, Public Act 17-160.

  • Statute. CGS Section 30-16(f) sets forth the permit requirements.
  • Limited Production. A Farm Brewery Permit operator may do all activities permitted under the manufacturer permit but production may not exceed 75,000 gallons (just over 2,400 bbl) of beer per calendar year.
  • Farm requirement. Permitted premises must be located on a “farm;” however, the statute does not define “farm.”
  • State Connection. Not less than fifty percent (twenty five percent during the first year) of the “… hops, barley, cereal grains, honey flowers or other fermentables” must be grown or malted within the state. Because this requirement can be satisfied by merely malting the grains in the state, the ingredients of the beer could be entirely grown outside of the state.  The statute fails to define how the percentage is determined – i.e. by weight or volume. Hopefully, the Department of Consumer Protection will provide guidance on this calculation.
  • “Connecticut Craft Beer” designation. A Connecticut farm brewery operator may designate its beer as Connecticut Craft Beer.
  • Sales. On-premises consumption and sales for off-premises consumption is permitted. Like the restrictions placed on beer manufacturers and brew pubs, sales for off-premises consumption are limited to nine liters per person per day.
  • Hours. Permitted hours for sales for off-premises consumption are the same as those for package stores. The statute is silent regarding hours for on-premises consumption, although a cautious operator will adhere to the hours set forth in CGS section 30-91 (hours for restaurants and cafes) or set by local ordinance, whichever is more restrictive.
  • Farmer’s Markets. Sales at farmer’s markets are permitted provided the operator has obtained a farmer’s market beer sales permit. The amount of beer that can be sold at a farmer’s market is increased from five to seven liters per person
    per day.
  • Fee. The annual fee for a Farm Brewery Permit is $300.

Farm Distillery Permit, Public Act 17-232.

  • Statute. CGS Section 30-16(h) sets forth the permit requirements.
  • Limited Production. A Farm Distillery Permit operator may do all activities permitted under the manufacturer permit but production may not exceed 10,000 gallons of distilled liquor per calendar year.
  • Farm requirement. The statute requires that the permitted premises be located on a “farm;” however, the statute does not define “farm.”
  • State Connection. The statute requires that not less than twenty five percent of the “crops” used in the manufacture of the distilled spirit be grown on the permit premises or on property under the ownership or control of the operator. The percentage of farm grown products may be averaged over a five-year period, using the two highest years.
  • Acreage. Permit premises on more than one parcel must have five or more total acres. No minimum acreage requirement is placed upon premises consisting of a single parcel.
  • Sales. On-premises consumption is limited to the offering of free samples, not to exceed 2 oz. per person per day. Sales for off-premises consumption are permitted, limited to four and one-half liters per person per day.
  • Hours. The statute is silent regarding the hours for on-premises tastings and sales for off-premises consumption. A cautious operator will adhere to the hours set forth in CGS section 30-16(a) or set by local ordinance, whichever is
    more restrictive.
  • Fee. The annual fee for a Farm Distillery Permit is $300.

Our General Assembly should be congratulated for introducing novel ways for beverage alcohol producers to reach their customers, while promoting local commerce.

With the creation of the Farm Brewery and Farm Distillery Permits, Connecticut has opened a host of new, creative possibilities and opportunities for growth in its already dynamic and robust craft beverage industry.

This column is not intended to be legal advice; consult an attorney for answers to your specific questions and situation.

Attorney Berdon, a partner with Berdon, Young & Margolis, PC, has represented wholesalers, manufacturers, package stores, restaurants and bars before the State of Connecticut DCP and the Federal TTB as well as in litigation matters in court since being admitted to practice in 1991. He can be reached at peter.berdon@bymlaw.com or www.bymlaw.com.

 

 

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