Iowa: Group recommends lifting some restrictions on state-based distillers and brewers

Source: Business Record

BY KENT DARR, Senior Staff Writer

February 01, 2017

Iowa microdistilleries would be allowed to manufacture and sell their spirits on-site under recommendations from a working group that was appointed by Gov. Terry Branstad and Lt. Gov. Kim Reynolds to review and suggest changes to state liquor laws.

The working group, led by Stephen Larson, administrator of the Iowa Alcoholic Beverages Division, and Debi Durham, director of the Iowa Economic Development Authority, submitted five recommendations today after conducting eight public meetings since early August.

A key change involved the microdistilleries, which have complained about regulations that limited the quantity of distilled spirits they could produce in a year and limited retail sales at the distilleries. The working group would lift caps on production and would raise the two-bottle limit on spirits produced and sold on-site to one case.

The change would bring microdistilleries in line with the state’s native wineries and breweries, which do not operate under production or sales caps.

For the breweries, the working group recommended the elimination of multiple permits that are required for the production of beer with an alcohol content of no more than 6.25 percent and beer with an alcohol content above that level but no higher than 15 percent. One permit would be issued, with a fee of $750 and a bond of $10,000.

Brewpubs, which manufacture and sell their product on-site, would be allowed to sell beer for consumption off their premises providing it was used to fill growlers. Beer contained in bottles and cans must be delivered to and purchased from a wholesaler before it can be sold for carryout from the brewpub.

The study group also recommended enhanced collaboration between the Iowa Alcoholic Beverages Commission, which recommends policy, and the Iowa Wine and Beer Promotion Board, a function of IEDA that looks for ways to market Iowa-made beer, wine and spirits.

“We feel that this increased collaboration between the two bodies will allow a greater understanding of both the economic and regulatory issues affecting the alcoholic beverages industry in Iowa and result in better policies put forth by both bodies,” the report said.

In addition, the working group said more time was needed to study licensing, administrative actions and administrative appeals, issues that can put state and local officials at odds when renewing and issuing liquor permits, and that deal with a range of health and public safety issues. The working group said additional stakeholders should be brought into the process, which would result in another report that would be delivered to the governor and Legislature by Jan. 1, 2018.

“We feel that these recommendations will create greater economic opportunities for our local entrepreneurs, make it easier and more efficient for Iowans to conduct business with state government, make Iowa’s alcohol laws easier to understand and enforce, and result in public policy that continues to protect the health and safety of Iowans,” the cover letter that accompanied the report said.

The working group was made up of representatives from alcoholic beverages manufacturers, retailers and wholesalers, public safety officials, and two at-large public members.