Mike Higdon

mhigdon@rgj.com

Two bills introduced to Nevada Legislature

One bill would raise the cap on beer production in Nevada

A second bill would raise the cap slightly but only allow 2 brew pubs per company

It would also limit the amount of beer a brew pub could sell off premise

A brewing conflict over Nevada's beer future is coming to a head at the Legislature.

For years, Nevada's craft breweries have tried to increase the amount of beer they can make by law, but in every legislative session, liquor distributors have slowed or stopped those efforts. Over the years, small brewers in Nevada have managed to increase their production cap, but are still fighting to pass laws similar to neighboring states that would allow them to make more beer or self-distribute their products.

But now, the goals of Nevada's craft breweries may take a step back.

A bill making its way through the Nevada Legislature aims to limit brew pubs in Nevada to two locations and would shrink the amount of beer they can sell to customers. Assembly Bill 431 is sponsored by Assemblywoman Irene Bustamante Adams, D-Las Vegas, who received $8,500 in combined campaign contributions in 2016 from liquor distributors and Anheuser-Busch InBev.

In Nevada, brew pubs can sell beer out of their storefronts and restaurants to walk-up customers. But most of the beer they produce gets sold to distributors, which is then re-sold to other retailers and bars as part of Nevada liquor laws.

Distributors have an interest in making sure as much beer as possible flows through their warehouses instead of through brew pubs. Brew pubs have an interest in making sure they can make as much beer as possible and sell it however they can. Therein lies the conflict.

There is currently no limit on the number of outlets a brew pub can own and operate. Brew pubs can also produce 15,000 barrels of beer and sell as much as they want out of the storefront or to the distributor. The bill would increase the production cap to 20,000 barrels, but would only allow 2,000 barrels of to-go bottles and growlers for sale at the brew pub. The rest would need to be sold to distributors.

If passed, brewers say it would stifle the growing beer industry in Nevada, which generated $480 million for the state in 2014, according to the Brewers Association. The bill might force some brew pubs to close or slow down production.

Citizens can submit public comment to legislators online. Select the bill in the list and click "Get Bill Information" to read the summary. Then pick For or Against and provide comment.

How this bill could affect Reno-area brew pubs

Reno-area brewers, such as Great Basin Brewing Co., Under the Rose Brewing and Revisions Brewing Co., would be the craft breweries most immediately affected by AB 431. About 34 other brew pubs in the state might also be dramatically affected if the bill passes.

"It should be embarrassing to the wholesaler groups, because if you talk to any of them, they just want to be able to sell more beer, too," Cameron Kelly, sales manager at Great Basin Brewing, told the RGJ in an interview. "This is going to hurt that ability. If we can't make beer to sell to our wholesaler, they obviously can't sell it. This bill is trying to ensure that the only available products are from breweries outside of the state, which have no limitation on how much they can import."

Great Basin Brewing Co. operates three brew pubs in Reno-Sparks that all produce beer. Kelly said the bill could threaten Great Basin's three locations. The bill's wording might cause one of their brew pubs to close or at the least, force them to buy their own bottles from themselves through a distributor, he said. Under the Rose Brewing Co. is opening its second brewing location in Midtown and would be prohibited from opening a third location anywhere in Nevada.

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Owner of the newly opened Revision Brewing Co. said he would consider opening his second brewery on the East Coast instead of Reno if Nevada laws prevent expansion. Revision Brewing Co. opened in Sparks and plans to immediately grow into the largest beer producer in Nevada. But as the current bill stands, owner Jeremy Warren will not be able to make enough beer for his rapidly expanding enterprise.

For him, keeping a retail front with a bar, is integral to growing a brand and customer base.

“That bill would ... make us the second-worst craft brew state in the country," said Don Vetter, a spokesperson for the Nevada Craft Brewers Association. “For brewers across the state, the bill is seen as detrimental to a growing economic powerhouse of small businesses based around a tight-knit culture and community involvement.”

Backers say the bill protects competition

While AB 431 is still awaiting formal debate, supporters often make the argument that limiting Nevada's craft breweries' output will protect them in the long run.

In short, backers of limiting craft brewery production in Nevada say companies like Anheuser-Busch InBev or another well-funded company could move into Nevada, open brew pubs on every corner and push out small businesses. But, Anheuser-Busch InBev does not open brew pubs in the United States outside of its factory breweries.

The other argument is that Anheuser-Busch InBev could buy up all the brew pubs and monopolize the local industry. It would be similar to Starbucks pushing out small local coffee shops.

The Nevada Craft Brewers Association has adamantly argued against the notion that limiting production will help protect small breweries from industry behemoths. Instead, they argue the production limits ultimately hurt their business.

Anheuser-Busch InBev has been getting into the craft brewery business in recent years, purchasing large independent brewers across the country, though all of them retained their branding and some local ownership while the take over expanded their reach.

Campaign contributions from big beer

The industry giant is also trying to influence politics in Nevada.

Adams, the sponsor of AB 431, received $1,000 in campaign financing from Anheuser-Busch, the world's largest beer brewing empire and company that owns Budweiser.

Southern Glazer's Wine & Spirits, the largest alcohol distributor in the country and also Nevada, contributed $5,000 to Adams' campaign.

The Nevada Beer Wholesalers political action committee contributed $1,500 to Adams' campaign. The PAC is made up of multiple liquor distributors in Nevada.

Breakthru Beverage, a North Las Vegas-based distributor, also contributed $1,000 to her campaign.

Adams did not return multiple requests for comment on the bill. Alfredo Alonso, the lobbyist who helped write this bill and represents Nevada distributors and is listed as the leader of the Nevada Beer Wholesalers PAC, also did not respond to request for comment.

AB 431 has not yet gone to committee for discussion.

An alternate bill, SB 130, already made it through committee and it's only ask is to increase the beer production cap from 15,000 barrels to 30,000 for all Nevada brew pubs.

Mike Higdon is the city life reporter at the RGJ and can be found on Instagram @MillennialMike and on Facebook at Mike Higdon, Reno Life.