Sarah Fowler

Clarion Ledger

The Mississippi Brewer’s Guild is asking the Legislature to level the playing field between Mississippi breweries and those from out of state.

According to Matthew McLaughlin, general counsel for the Mississippi Brewers Guild, brewers in Mississippi pay a yearly $1,000 licensing fee to operate in the state. However, out-of-state brewers do not have to be licensed by the state and do not have to pay the $1,000 fee.

Mississippi and Georgia are the only two states in the nation that do not allow breweries to sell directly to the consumer.

The guild is introducing legislation that would change that.

In a proposal expected to be presented to the Legislature in the coming weeks, the guild is asking for Mississippi alcoholic beverage laws to become “congruent, competitive and consistent with the rest of the United States,” said McLaughlin.

“When 48 out of 50 states allow something, it’s sooner rather than later the others will come around,” McLaughlin said. “If we’re the only one not allowing it, that doesn’t necessarily mean that we’re right.”

Tuesday afternoon, the Georgia Beer Wholesale Association announced it had reached an agreement with Georgia's Department of Revenue to allow brewery tours with varying prices based on what kind of beer was being offered.

The proposal being presented by the guild would require out-of-state breweries to pay the same privilege tax as Mississippi breweries, allow limited retail sales at Mississippi breweries, create an excise tax rebate for certain Mississippi breweries and their distributors and expand opportunities for brewpubs.

The guild argues that the change in legislation would enable Mississippi craft breweries to become more competitive and treat certain alcoholic beverage manufactures in a consistent manner while preserving the three-tier distribution system and state franchise laws.

“I think it’s going to make Mississippi breweries more competitive in the marketplace,” McLaughlin said. “It will create a potential revenue stream for them that they don’t currently have but all of their competitors in every other state do have.”

Mark Henderson, owner of Lazy Magnolia Brewing Company in Kiln, said, “Resolving the inequity between producing in state and producing out of state is critical to the success of the industry.”

According to data provided by the guild, in 2014, the craft beer segment reached double-digit volume share of the marketplace for the first time. Craft breweries produced 22.2 million barrels of beer leading to an 18 percent increase in production volume and a 22 percent increase in retail dollar value, the guild said. The retail dollar value was estimated at $19.6 billion, 19.3 percent of the market.

In a press release issued by the Brewers Association, Bart Watson, the organization’s chief economist, said, “With the total beer market up only 0.5 percent in 2014, craft brewers are key in keeping the overall industry innovative and growing. This steady growth shows that craft brewing is part of a profound shift in American beer culture, a shift that will help craft brewers achieve their ambitious goal of 20 percent market share by 2020.”

He added, “These small businesses are one of the bright spots in both our economy and culture. Craft brewers are serving their local communities, brewing up jobs and boosting tourism. Craft brewers are creating high-quality, differentiated beers; new brewers that match this standard will be welcomed in the market with open arms."

Mississippi is home to seven organically grown production breweries and six breweries in planning. This represents 0.3 breweries per capita, ranking it 51st overall. In 2014, the craft beer industry had a total economic impact of $149.5 million in Mississippi, ranking it 49th on a per capita economic impact basis.

According to the Mississippi Department of Revenue, approximately 30 million cases of beer are sold in the state each year. Of these 30 million cases, less than 90,000 were manufactured by Mississippi breweries, the guild said in the release.

McLaughlin said Mississippi-made beer accounts for 0.3 percent of beer sold in the state, a number that is "crazy low."

Referencing current Mississippi legislation, McLaughlin said, "We are our own worst enemy, and we can't get out of our own way."

McLaughlin stressed that breweries are not trying to end the three-tier system and cut out distributors. By allowing on-site purchasing, breweries are able to see what consumers like — and what they don't.

"It allows breweries to get instant feedback from the customer," he said.

Henderson said his company spends between $10,000 to $50,000 taking new product to market. Sometimes the product is a success and sometimes it's not, he said. Allowing on-site selling could save Lazy Magnolia and other breweries a costly step in the process to developing and refining products.

"In the South, people are always nice," he said. "You give them something for free and they're going to tell you they like it. You don’t really know how people feel until you introduce the dollar equation into it."

Contact Sarah Fowler at sfowler@gannett.com or (601) 961-7303. Follow @FowlerSarah on Twitter.