Montana Breweries Growing Pains

Missoula-brewed beer from the Kettlehouse Brewery is going to be harder to find for people outside the Garden City. The brewery recently hit its head up against a state ceiling prohibiting breweries from operating tasting rooms if they produce 10,000 barrels of beer or more per-year.

Breweries started being allowed to sell beer on site in 1999. Executive Director of the Montana Brewers Association Tony Herbert says at that time the legislature, breweries, and the Montana Tavern Association worked out the Sample Room Exemption for breweries. He says there are three main, guiding rules that breweries have to follow: each patron can only consume 48-ounces of beer on site, the tasting room must close at 8 PM, and if they get big enough to produce 10,000 barrels per year, they can no longer operate a tasting room.

“It set the stage for the growth that the industries seen since 1999,” Herbert said prior to this exemption breweries could give out free samples, but they couldn’t sell to customers “it’s an extremely important part of any brewery to be able to get their feet on the ground; to be able to offer their samples to the public to find out if they like the beer, and be able to expand their brand.”

“There’s a great profitability in that tasting room operation for breweries of our size, “ Marcus Duffey is General Manager and part owner of the Great Northern Brewing Company in Whitefish, “and to eliminate that, or to lose that ability simply because you’ve exceeded the 10,000 barrels, is very prohibitive, and in a lot of ways, a disincentive for breweries to grow,” Duffey said.

Great Northern Brewing was originally built on the Black Star Beer brand in 1995.

“The brewery is and always has been the original home of Black Star. Black Star did go away for a period of time back in the early 2000’s, and has come back since February of 2010,” Duffey said.

He said Black Star is distributed in Arizona, Washington, Idaho, Oregon, and California, as well as Montana. But, not all that beer is brewed on-site in Whitefish. Duffey says they have 11 beers going year-round, adding seasonal beers they produce 17 different types of beer including Black Star, Wheatfish, Going to the Sun IPA, Snow Ghost Winter Lager, Wild Huckleberry Wheat, and others. Duffey says they expect to produce 5-thousand-barrels of beer total this year. To give some perspective Duffey says one barrel equals 31-gallons. He says a keg is about half-a-barrel.

Duffey says the Great Northern Brewery is looking to grow, but space for brewing will likely keep them below the 10,000 barrel microbrewery threshold.

“I think early on when those rules were put into place, when that definition was made, the idea of 10,000 barrels was a large amount, and maybe was considered generous. Today, as we grow in popularity as an industry, that 10,000 barrels is a reality for a lot of breweries, and they’re running into that restriction,” Duffey said.

Breweries hold brewers licenses, not the liquor licenses bars are required to have. Some breweries have expanded their offerings in their tasting rooms by separating the licenses. At Great Northern, for example, Duffey says a separate entity hold the license to operate their tasting room so they offer food and wine in addition to their beers. Different licenses have different requirements with the state, different costs, and standards.

Herbert with the Montana Brewers Association says the industry has expanded greatly since breweries started selling beer in tasting rooms. He says they numbered in the teens statewide in 19-99. Today, he says there are more than 30, with more looking to come online this year. Whether or not brewers will look to next year’s legislature to change that 10,000 barrel ceiling remains to be seen.

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