When the Legislature allowed restaurants to sell takeout beer, they left out the breweries

By: - April 24, 2020 6:00 am

Lake Monster Brewing in St. Paul. The Legislature intentionally left out breweries from a recent bill allowing restaurants to sell takeout beer and wine. Photo by Madeline Deninger.

Lawmakers agreed to allow restaurants to serve takeout alcohol last week, and the moment brought the warm buzz that often accompanies a second pint of beer. In this case, however, the glow arrived not from a glass of beer but from a rare moment of bipartisan comity at the State Capitol.

But there was one party missing from the moment — the industry that has become iconically synonymous with Minnesota’s food and bev scene: craft breweries.

As much as any industry, brewers have been socked by restrictions imposed by Gov. Tim Walz to curtail the spread of COVID-19, but they were left out of the bill Walz signed last week allowing restaurants to sell takeout beer and wine.

That means breweries with kitchens can sell takeout food and — in some cases — growlers and crowlers just like before, but not a six-pack of their own beer.

“We’re probably the only restaurants in the state that you can’t buy some beer from, which is kind of ironic since we make it,” said Omar Ansari, founder of Surly Brewing. “It would be a huge help because we’re struggling … like all the hospitality companies in the state.”

Because of a quirk in state law, Surly is too large to sell crowlers and growlers out the door. The company has been forced to furlough 280 out of 360 employees, Ansari said.

Those furloughed workers — now likely on Minnesota’s unemployment rolls — are pawns in a longstanding lobbying battle at the State Capitol over the state’s byzantine liquor laws, which until recently banned the sale of booze on Sundays and still prevents you from buying alcohol at the grocery store.

The beer meisters and their influential pop-up grassroots supporters are already pushing lawmakers into amending the new law, to allow craft beer companies to sell out of their breweries.

Organizations like the Minnesota Beer Wholesalers Association and the Minnesota Licensed Beverage Association — both of which have yearslong relationships with lawmakers and contribute to political campaigns — oppose any change to the law.

Michael Madigan of the beer wholesalers said at a recent House Commerce Committee hearing that allowing breweries to sell bottles of beer to go would just hurt the original bill’s intended beneficiaries — restaurants.

Leslie Rosedahl, a spokesperson for the Minnesota Licensed Beverage Association, which is a group representing liquor stores, said allowing breweries to sell cans and bottles for takeout presents a disruption to Minnesota’s three-tier alcohol distribution system of suppliers, distributors and retailers.

“Bars and restaurants want to continue to be retailers,” Rosedahl said. “Breweries already have an exception with growlers.” The message to breweries, in other words: Stay in your lane.

Breweries fought for years to blur the lines of this three-tier system, finally winning the right to sell directly to consumers. In 2011, they won the right to open their own taprooms, later winning the right to sell growlers and crowlers, provided they do not brew more than 20,000 barrels a year. Rosedahl noted that breweries can already deliver food and growlers directly to customers. 

The bones of the current system date back to the years just after Prohibition. Its defenders, including established companies that rake in huge profits, say Minnesota’s alcohol regulatory regime has proven effective in encouraging fair competition and consumer choice and safety.

In the face of thirsty consumers, however, they are defending what has become an increasingly teetering status quo. But Rosedahl said the breweries are fighting an uphill battle this time: “There’s little appetite to do things that are controversial and this craft brewery exemption is controversial, as much as everyone wants to help small businesses.”

Sen. Kari Dziedzic, DFL-Minneapolis, brought an amendment to the takeout bill that would have allowed breweries to sell four- and six-packs of beer. Other industry players opposed it, and it was withdrawn.

Rep. Laurie Halverson, DFL-Eagan, chair of the House Commerce Committee, said she’s open to a proposal from breweries to expand takeout options for them. But she said an amendment like Dziedzic’s isn’t the best path forward for changing such policies.

Halverson also stressed the existing bill’s benefit to breweries who can sell their product to bars and restaurants, which in turn can sell it to customers for takeout.

Matthew Zanetti, founder of Lake Monster Brewing in St. Paul, said he’s had to lay off 19 employees. Growler take-out sales have allowed him to keep three employees on part-time, he said.

It’s not all bad for breweries. Minnesotans are mostly staying home, which means more time to drink beer. Lake Monster Brewing’s liquor store sales are up 20%.

But without the taproom in operation, the brewery is losing around 60% of its revenue. Zanetti said being able to sell cans out the door for takeout would help bring in more business. He also said these sales would deliver a better profit margin than selling through a distributor, which takes its cut.

“I would be busier,” Zanetti said. “If there was ever a time to pass this, it’s now.” 

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Madeline Deninger
Madeline Deninger

Madeline Deninger is a junior at the University of Minnesota. She covers for politics and state government for Minnesota Reformer as a Kaufman Fellow. She currently serves as city editor of the university's campus newspaper, Minnesota Daily. She's also worked at WCCO-TV and American Public Media.