More beer? Sun King, 3 Floyds want state to up production limit

A renewed push from the state's two largest microbrewers could mean more craft beer for Hoosiers.

Sun King and 3 Floyds have launched a campaign called "Support Indiana Brewers" that urges state lawmakers to increase the amount of beer that microbreweries are allowed to sell each year in Indiana.

Under current law, microbrewers can sell 30,000 barrels of beer each year in Indiana. Any production beyond that must be distributed out of state.

Sun King co-owner Clay Robinson and 3 Floyds co-owner Nick Floyd say that's a problem because their breweries could sell far more beer in Indiana.

They say the production limit is keeping them from growing and expanding at home. In fact, both breweries crept close to the cap last year; Sun King sold 26,000 barrels and 3 Floyds sold 21,176.

As other Hoosier microbrewers grow over time, the production limit will affect them as well.

Key legislators are backing the brewers' effort to raise the limit to as much as 90,000 barrels per year.

Senate Public Policy Chairman Sen. Ron Alting, R-Lafayette, and Rep. Ed Clere, R-New Albany, have authored bills that would increase the barrel limit. Two other bills with similar provisions have been offered.

"I don't see any good reason to put artificial limits on any successful Hoosier business," Clere said.

Clere said he would be surprised if they weren't able to increase the barrel limit this session, but admits some lawmakers would be more comfortable with an incremental increase.

Clere said he hasn't encountered push back to raising the limit. "No one has expressed an objection to me," he said.

However, beer wholesalers have some concerns.

They point out that state law allows brewers to expand capacity beyond 30,000 barrels. But there's a catch. To sell more than 30,000 barrels, breweries need a different permit and have go through wholesale distributors. There are currently no breweries in Indiana with permits for larger production.

The permit to produce more than 30,000 barrels also prevents brewers from selling directly to the consumer — eliminating their popular tasting rooms and brew pubs.

Sun King, like many breweries, self-distributes its beer. In December, the brewery terminated its contracts with its distributors that served areas outside the Indy metro area and Bloomington because they were up against the 30,000-barrel limit.

Marc Carmichael of the Indiana Beverage Alliance — which represents the wholesalers — fears that self-distribution will erode the three-tier distribution system that has been in place for 80 years: supplier to wholesaler to retailer.

"The wholesalers were created to level the playing field so that every supplier could get to market and every retailer could get the same deal," he said.

Without the wholesalers, he thinks the industry could run the risk of favoritism and unfair pricing.

But even the wholesalers aren't standing in the way of change. Carmichael wants to find a compromise that would allow small brewers to grow and continue operating tasting rooms but would limit self-distribution.

Changing the state law is only the first step to increase production. Even if the law changes, Sun King's Robinson said brewing more beer wouldn't be like flipping a switch. He and other brewers would have to make significant investments.

"In order to make more beer, we need more equipment and tanks," he said.

But the company has seen a 30 percent jump in sales year-over-year, Robinson explained, so the demand is real.

"We will continue to grow and expand and our goal is to grow and expand in Indiana."

Follow Amy Haneline on Twitter, Facebook and Instagram. Call her at (317) 444-6281.

Beer for change

Sun King and 3 Floyds are kicking off the alliance and movement with a collaboration brew called Slacktavist. The Imperial Kolsh brewed with experimental hops will be available in cans through Sun King and in bottles by 3 Floyds.

Follow Amy Haneline on Twitter, Facebook and Instagram. Call her at (317) 444-6281.



