Local View: Modernizations for craft beer, wine also could help distilleries
Craft beer and wine have seen tremendous success in the state of Minnesota. These industries have contributed significantly to employment, agriculture, tourism and taxes. The public can see the success of these industries is an obvious boon to our state. Alcohol distributors and retailers also have seen gains from these industries that provide them with higher-end, higher-margin local products to sell. Indeed, overall sales have grown for all three tiers of the alcohol system as craft beer and wine have become significant players in the state.
Craft distilling is poised now to make the same contribution to Minnesota. Our nascent industry owes its start to modernizations in state liquor laws that began in 2011. These changes lowered the distillery licensing fee, allowed us to sample our product and sell cocktails on-site, and allowed us to sell one small bottle of spirits per person per day. We wouldn't be here without these vital changes.
Yet they fall short of the legal and tax framework that allowed craft beer and wine to succeed. They also fall short of modernizations in other states that are allowing craft distilling to get ahead of where it is in Minnesota.
Efforts are underway at both the state and national legislatures to bring these laws into sync with craft beer and wine. At the state level, proposed legislation would reduce restrictions on bottle sales from micro-distilleries, allow cocktail rooms to be open on Sundays, and require that micro-distillery products are truly local. These are similar to the provisions that allowed craft breweries and wineries to succeed in Minnesota. These bills have bipartisan sponsorship representing broad urban and rural parts of the state. So far the House Commerce committee has included them in their omnibus liquor bill, but the Senate Commerce committee has not.
We commend our legislators for their work on this so far, particularly Reps. Bob Loonan, Jim Nash and Joe Hoppe, and encourage them to pass this this year.
At the federal level, the primary change that has enabled craft beer and wine to succeed is a reduction in the federal excise tax for the small volumes craft producers make. A bill called the Craft Beverage Modernization and Tax Reform Act of 2017 would make the same change for small distillers. Again, this effort has strong bipartisan support from across the country. The House version was sponsored by Minnesota's U.S. Rep. Erik Paulsen and is co-sponsored by other Minnesotans in the U.S. House: Rep. Rick Nolan, Rep. Jason Lewis, and Rep. Tom Emmer. U.S. Sen. Amy Klobuchar, also of Minnesota, is a cosponsor in the Senate. We encourage Sen. Al Franken of Minnesota to also cosponsor this bill.
As Duluthians know, the craft beverage industries have made a tremendously positive contribution to the local economy, tourist trade, and quality of life. Successful breweries, wineries and distilleries are points of pride in our community. It is time for the modernizations that have enabled craft beer and wine to be successful to be applied to craft spirits as well.
Emily and Joel Vikre are co-founders of Vikre Distillery in Duluth and are members of the Minnesota Distillers Guild.