OLR Bill Analysis

sHB 5580

AN ACT ESTABLISHING A FARM BREWERY MANUFACTURER PERMIT.

SUMMARY:

This bill establishes a farm brewery manufacturer permit, which allows for the manufacture, storage, bottling, and wholesale distribution and sale of beer manufactured on a farm.

Under the bill, permittees may sell their beer on-premises and, if they obtain the requisite farmers' market beer sales permit, at farmers' markets. Subject to certain conditions, they may sell and ship directly to retailers and consumers, including consumers in Connecticut. A permit also allows for the offering and tasting of free samples, and retail sales for both on- and off-premises consumption, though a municipality may prohibit the activity by local ordinance or regulation.

The bill requires permittees to grow a certain amount of the hops and barley they use in the beer manufacturing process. It sets the annual fee for a farm brewery manufacturer permit at $300.

By law, the Department of Consumer Protection (DCP) issues liquor permits.

EFFECTIVE DATE: Upon passage

SCOPE OF A FARM BREWERY MANUFACTURER PERMIT

On-Premises Sales

The bill specifies that a permittee must only sell the beer it manufactures. It allows the following to occur at the farm brewery's main premises:

1. bulk sales;

2. for manufacturers producing up to 100,000 gallons of beer per year, sales and shipments in original sealed containers to retailers;

3. sales and shipments to people in other states;

4. sales and shipments directly to Connecticut consumers (see below);

5. retail sales by the glass and bottle to visitors for on-premises consumption;

6. retail sales of sealed bottles or other sealed containers for off-premises consumption; and

7. offering and tasting of free samples, dispensed from bottles or other sealed containers to visitors and prospective consumers, for on-premises consumption.

But it allows municipalities, by ordinance or zoning regulation, to prohibit the above offerings, tastings, or retail sellings.

The bill also extends to farm brewery manufacturer permittees a requirement that they, or an agent, offer either (1) free potable water or (2) nonalcoholic beverages for sale. This requirement already applies to manufacturer permittees for beer, cider, apple brandy and eau-de-vie, farm wineries, brewpubs, and beer and brew pubs.

Direct Selling and Shipping to Connecticut Consumers

The bill allows a permittee to directly sell and ship up to five gallons of beer in any two-month period to consumers in Connecticut, but it sets requirements for doing so. Specifically, a permittee must:

1. hold an in-state transporter's permit or have someone with such a permit make shipments;

2. not ship to an address in a municipality that prohibits alcoholic liquor sales;

3. pay sales and alcoholic beverage taxes on the sales to, and file related tax returns with, the Department of Revenue Services;

4. report to DCP, using a ledger sheet or similar form that chronologically shows consumer sales, a complete record of all sales and shipments; and

5. clearly and conspicuously provide its liquor permit number in any online advertising or offering of beer for direct shipment.

Permittees must also have their shipping labels conspicuously state:

“CONTAINS ALCOHOL – SIGNATURE OF A PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY.”

They must obtain the signature of someone at least 21 years of age at the delivery address before delivery occurs. Before signing, the signor must show that he or she is of the required age, either by providing a valid driver's license or other identity card.

Farmers' Market Sales

The bill allows a permittee to sell the beer it manufactures at a farmer's market run by a nonprofit organization. To do so, the farmers' market must have invited the permittee to sell its product there and the permittee must obtain a farmers' market beer sales permit from DCP.

By law, a farmers' market beer sales permit allows permittees to attend an unlimited number of appearances at a farmers' market, at up to three farmers' market locations each year. Permittees are capped at selling five liters of beer per person per day at a farmers' market and they may only sell sealed bottles for off-premises consumption. The annual fee for this permit is $250.

PRODUCT REQUIREMENT

Under the bill, in the first year of a permit's issuance, a farm brewery manufacturer permittee must grow at least 25% of the hops and barley it uses in the manufacturing process. This amount increases to at least 50% for each of the following years. The product must be grown on (1) the farm brewery's premises, (2) other property the permittee owns and controls, or (3) property leased by the permittee or the permittee's backer in the brewery's principal state (presumably Connecticut).

COMMITTEE ACTION

Environment Committee

Joint Favorable

Yea

29

Nay

0

(03/16/2016)