MISSOULA — Montana’s craft breweries may soon be able to sell beer in tasting rooms on premises and still can and keg up to 60,000 barrels a year.
The Montana House of Representatives has approved amendments made by the Montana Senate to a bill, HB541, that would raise the so-called “brewery cap.”
The bill will now be sent to Gov. Steve Bullock, who must sign it before it becomes law. A spokesperson for Bullock said he will be reviewing the legislation. Bullock has a tap for craft beer at his house in Helena, and often posts pictures of Montana brewers delivering kegs to his front door on social media.
The previous limit for craft brewers was 10,000 barrels a year, a limit that was surpassed long ago by Big Sky Brewery and forced them to start giving away free samples in the tasting room.
Kettlehouse Brewing Co., which recently built a new facility in Bonner that will produce 20,000 barrels annually, is now able to have a tasting room on site. And Bayern Brewing Co., which is currently pushing right up against the limit, will be able to continue to sell beer in its popular tasting room.
“HB 541 is the most important legislation we’ve seen for Montana’s craft brewing industry in 18 years," said Matt Leow, executive director of the Montana Brewers Association. "The Legislature has signaled a green light for Montana breweries to grow, giving breweries the confidence to make investments to expand their production. That means more jobs, increased demand for Montana-grown barley and greater access to Montana craft beer."
The bill was sponsored by Rep. Adam Hertz, R-Missoula, and co-sponsored by Rep. Ellie Hill, D-Missoula, and Rep Greg Hertz, R-Polson.
The Senate amended the bill to limit breweries to selling no more than 2,000 barrels on premise. The Montana Tavern Association withdrew their opposition to the bill with the inclusion of the taproom limitations.
“Rep. Hertz brought a great bill that was turned on its head in the Senate Business and Labor committee,” Leow said. “We are pleased that the Senate restored the bill to 60,000 barrels. While we would prefer a clean bill without the new taproom limitations, the limits are set high enough that they will not impact what any breweries are currently doing.”
“With this change, I’m confident Montana will see millions in new capital investment and hundreds of new jobs,” Hertz wrote on his Facebook page.
Tim O’Leary, the owner of Kettlehouse Brewing, said that the bill makes it possible for him to have a taproom that sells beer at the shiny new facility in Bonner on the banks of the Blackfoot River, where Logjam Presents is building a new outdoor music ampitheater on Kettlehouse property.
"This provides us a great opportunity,'' O'Leary said. "I should say an unexpected opportunity.”
O’Leary said the main function of the new facility is to can and keg beer so it can be exported to multiple locations across the state, including Billings.
“Our new canning machine has improved the quality of the beer and lengthened the shelf-life and the brewhouse is much more efficient,” he said. “We are just excited about a new packaging facility, and to add on this opportunity is a nice push.”
O’Leary said having a taproom at the other two Kettlehouse locations has been a vital part of the business model, as it has for other breweries.
“We wouldn’t be even talking today if we didn’t have the ability to sell three pints between noon and 8 p.m. starting in 1999,” he said. “It really saved us as a business. It’s really probably the reason why 80 percent of brewers are still open. We wouldn’t be here without it. We are grateful to our industry partners for the compromises in 1999 and today.”
O’Leary said the new law will allow breweries to expand and hire more workers.
“It’s a good thing for Missoula County because the three largest breweries in the state are all located here,” he said. “It’s a testament to the community and support for local products.”
Neal Leathers, one of three co-founders of Big Sky Brewing, said if Bullock signs the bill, the brewery's taproom will start selling beer once the law takes effect in October.
"We will be able to sell beer for on-premise consumption," he said. "So there will be one more summer of everything being give-away, but that's not really good for anyone, except if you are looking for free beer. It definitely will change come October."
Leathers estimates that the brewery has given away $4 million worth of beer over the last 10 years, based on what they could have sold it for.
"This new law will be especially good for Missoula," he said. "Kettlehouse will be able to open a taproom at its new location and Bayern will be able to keep selling beer on premise."
He said that even very successful taprooms in the state sell about 1,200 barrels a year, so the new limit for taproom consumption would only affect a brewery if it had two very successful taprooms.
"This is good news," he said.