New Maine Beer Law Lets Brewers Determine Their Future

A new beer law will take effect in Maine on Sept 19 that is being called one of the “most important pieces of legislation in the brewing industry.”

Here’s the deal…

On July 2 Maine adopted a new law that Brunswick House Representative and co-founder of Moderation Brewing called one of the “most important pieces of legislation in the brewing industry” A bill that expands what it means to be a “small brewer” and in doing so allowi those breweries more distribution flexibility.

As things stand now, Maine breweries who produce more than 1,600 are not allowed to distribute their own products and forced to go through a third party distribution vendor. But the new law, which has passed but won’t take effect till mid-September, will allow brewers who produce fewer than 30,000 barrels annually to self-distribute their beer.

Sean Sullivan, Executive Director of the Maine Brewers Guild explained to the Sun Journal that the current production cap of 1,600 barrels was crazy low “especially when compared to the federal definition of a small brewer, which is 60,000 barrels, or almost 1.9 million gallons of beer.”

The new law was a result of a real “give and take” between small brewers and Maine’s distributors.

At issue was the upfront costs the distributors shoulder, when they take a new brewery on…It’s the reason that distributors want to have a long term contracts which a brewer can’t easily exit, so they can recoup some of those expenses.

Brewers on the other hand were looking for more flexibility getting out of existing contacts with distributors should they chose to. And with a new law that will allow brewers who produce fewer than 30,000 barrels annually to self-distribute soon to go into effect, many brewers will be looking to exit those contracts.

Under the new law, the buyout system is also simplified when a brewer chooses to break a contract according to the Sun Journal…

”If sales were up in the last calendar year, the brewery has to pay the distributor two years of gross profits. If sales were down, they pay a year.’

But after that they free of their obligation to the distributor and can self-distribute their beers as they see fit.

“The relationships between brewers and distributors are really crucial,” Sullivan said, but the “intention of this {law} is to provide options.” And the fact that something which Massachusetts has been trying to pass for 10 years, passed in one year is “an awesome testament to our industry and the spirit of doing business in our state.”