Brewers raise a glass as craft beer bill heads to governor's desk

PIERRE — A proposal to allow craft brewers to sell their beer to retailers without a distributor and hike the barrel limit they can produce each year overcame its final hurdle Tuesday.

On a 63-3 vote, the House of Representatives approved Senate Bill 173. The bill moves now to Gov. Dennis Daugaard's desk for approval, where the Republican governor has indicated he will support it.

Craft brewers in the state celebrated the news Tuesday, saying they were glad to have the opportunity to grow without losing their ability to operate taprooms or their licenses to sell cider or wine.

“I think it’s a huge step of progress for brewers and distributors,” said Joel Thompson, who runs operations and management at Fernson Brewing Company.

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The bill incorporates two proposals, one brought by the governor's office and the other from beer wholesalers.

The bill would set a 1,500 barrel cap on the amount South Dakota microbrewers can sell directly to restaurants or stores without a wholesaler. Under current law, microbrewers must work with a wholesaler to sell to stores and restaurants.

Craft brewers would also be able to make up to 30,000 barrels a year while also keeping licenses that let them sell wine and cider or keep offsite taprooms open. The current limit is 5,000 barrels a year.

Follow Dana Ferguson on Twitter @bydanaferguson, call 605-370-2493 or email dferguson@argusleader.com