Pence signs bill to raise barrel limit on microbreweries

Indiana’s two largest microbreweries, 3 Floyds and Sun King, launched a campaign in January to urge state lawmakers to raise the production limit on small brewers.

They succeeded.

Gov. Mike Pence has signed Senate Bill 297 that allows Indiana microbreweries to triple the amount of beer they sell in-state each year to 90,000 barrels from 30,000 barrels. Currently, any production beyond 30,000 must be distributed out of state.

The passing of the bill is a big win for the exploding craft beer industry. However, a twist in the law is also a win for wholesale distributors. The bill now sets a cap of 30,000 barrels annually on self-distribution. This means that microbreweries are required to go through the three-tier system — supplier to wholesaler to retailer — after 30,000 barrels.

The bill’s author Sen. Ron Alting, R-Lafayette, called it a “historic” compromise. He said they worked hard to get “100 percent consensus” from the Brewers of Indiana Guild and the wholesalers.

Co-owner of Sun King Clay Robinson agrees. “It allows breweries to grow and allows us to work with distributors so we can both grow our businesses. All around it was a good compromise.”

But will it really mean more beer for Indiana?

Sun King announced in December that it was terminating its agreements with distributors serving areas outside of the Indy metro area and Bloomington. The reason was because it was creeping close to the production limit.

However, even with the larger allowance, Sun King brews won’t return to those regions right away.

“We’re working on it, but it won’t be immediate,” Robinson said. “The hope is to have statewide distribution in place later this year.”

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