Minnesota's largest craft brewers make a last-call pitch to lawmakers for growler sales

Minnesota's large craft brewers made a last-call attempt at persuading state legislators to let them sell cans and 64-ounce to-go growlers from their brewery restaurants and taprooms.

The brewers invited a bipartisan group of lawmakers to Surly Brewing Co.'s showplace brewery and restaurant in Minneapolis last week for a pitcher and a pitch about why the Legislature should again loosen restrictions on beer and liquor sales.

Beer and spirits makers in Minnesota for more than a decade have been chipping away at laws that date back to just after Prohibition. In the process, the state's craft beer industry has gone from a handful of breweries in 2006 to nearly 200 today.

For the biggest craft brewers — including Surly, Schell's, Indeed, Castle Danger, Fulton and Lift Bridge — the issue now is parity with smaller brewers that are allowed to let customers take home a growler. Omar Ansari, Surly's founder, said growlers represent a brewhouse experience that it can't offer visitors after its production grew more than a decade ago to a size that exceeded a state limit.

"It's what customers expect," Ansari said. "They just want to bring home some beer from a brewery they've visited. It's like buying a T-shirt. It's just part of the experience and you can pretty much do it at every brewery in the country except ours."

The Legislature is expected to meet in special session later this month to pass a new two-year state budget ahead of a July 1 deadline. Changes to liquor laws met opposition during the regular session this spring, but some lawmakers say the brewers have a chance — if not now, soon.

"Liquor laws are very complicated," Rep. Jon Koznick, R-Lakeville, said at the Surly event. "But the growler law is something consumers have been consistent in asking for."

Breweries that produce more than 20,000 barrels of beer per year can only sell individual pours on their premises. For now, just five Minnesota breweries exceed that threshold. A few others are nearing it, including Lift Bridge Brewing Co., which now offers growlers to-go for customers at its Stillwater brewery.

"We're just asking to keep doing what we've already been doing," said Dan Schwarz, chief executive of Lift Bridge.

Distributors, liquor stores and bars oppose the change. They say it provides an unfair advantage to the makers of some of their best-selling beers.

"When the provision was first put in place for growlers, it was to help the small production breweries," said Leslie Rosedahl, a spokeswoman for the Minnesota Licensed Beverage Association (MLBA), which represents bars, restaurants and liquor stores. "Now the big guys want it, too."

Opponents say the change would also hurt retail stores and restaurants. Rosedahl says the MLBA would just "rather support something that would help the whole industry."

But Schwarz said Lift Bridge and other breweries rely heavily on, and value, all the other sellers of their beer. "We never want to hurt that relationship," he said.

Lon Larson, co-owner of Castle Danger Brewery in Two Harbors, says 98% of its beer is sold through wholesalers and distributors. He estimates if the five breweries currently affected by the cap limit were allowed to sell growlers, the amount of beer sold in to-go containers would be a small fraction of 1% of all the beer made in Minnesota, based on data from the state revenue department.

"Looking at the statistics, I don't see this issue going away. We have this explosion in the number of breweries, and they want to grow. That is the natural progression," said Brigid Tuck, an economist with the University of Minnesota Extension who has researched the industry's economics. "It doesn't feel like it's an issue that will simply dissolve or go away."

The breweries are launching a marketing campaign for the law change called "Free the Growler."

While every U.S. state has its own unique liquor laws, Minnesota's are among the strictest. It operates on a modified three-tier system that was designed after Prohibition to prevent a consolidation of power between the three steps involved in alcoholic beverages: production, distribution and sales.

Exceptions have been slow to pass the Minnesota Legislature, but they have been made, moving Minnesota ever-so-slightly further from a pure three-tiered system.

Larson believes that's really why there is resistance to raising this somewhat arbitrary cap.

"One change begets another change begets another change, and that's what they're afraid of," Larson said.

Even so, he said he believes there is bipartisan support for a change. The immediate challenge is to convince legislative leaders they should bring it up for a vote.

"If we could get a floor vote, we have the votes in both the House and the Senate," Larson said.

For Ansari, who often is credited for the lobbying that produced the legal changes allowing craft brewing to take off in Minnesota, selling beer in growlers and cans from its Prospect Park brewery would mean a chance for Surly to dabble more in small-batch, experimental beers.

"It really is a pipeline for creating and testing new beer," Ansari said.