Legislature(2011 - 2012)BELTZ 105 (TSBldg)
03/29/2012 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB143 | |
| SB128 | |
| SB211 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 211 | TELECONFERENCED | |
| += | SB 143 | TELECONFERENCED | |
| *+ | SB 128 | TELECONFERENCED | |
SB 128-BREWERY LICENSES/PERMITS
1:34:56 PM
CHAIR EGAN announced the consideration of SB 128.
CO-CHAIR PASKVAN moved to bring CSSB 128( ), version 27-LS0647\I
before the committee for purposes of discussion.
CHAIR EGAN objected.
GENEVIEVE WOJTUSIK, staff to Senator Lesil McGuire, sponsor of
SB 128, explained that SB 128 proposes to amend AS 04.11.080.
Currently, this statute allows a brewery to sell as much as 36
ounces of beer a day to persons for consumption on the premises
if the brewery does not allow entertainment, does not provide
seats at the counter or bar where their product is being served,
or if the room where the consumption occurs is not open before 9
a.m. or close after 8 p.m.
She said the breweries that brought this bill to their attention
are part of the Brewers Guild of Alaska that has 18 members.
They asked to amend this law slightly by allowing breweries to
have chairs or bar stools for consumption where they have their
sampling bar and to also extend their hours from 8 p.m. to 10
p.m.
More importantly to them, the second part of this bill allows a
brewery to apply for a brewery special events permit that would
allow a brewery to sell or dispense beer manufactured on the
brewery premises for a special occasion in a limited period of
time, like an anniversary party or a first tap. It provides
authority for the board to issue a brewery special events permit
to the license holder if the permit is received at least 10 days
before the event it requires that the application for the permit
to be signed by both the brewery license holder and a law
enforcement agency having jurisdiction over the brewery
premises. She said that a brewery may not request more than five
permits in a calendar year and are required to return the permit
within 48 hours of expiration.
SENATOR DAVIS asked what changes the committee substitute (CS)
made.
MS. WOJTUSIK replied that this is the second CS and the first CS
added the special events permit. The latest CS takes out the
entertainment portion. Breweries want to be able to have
entertainment only five times a year during those special
events. She said that the first CS made it sound like they could
have live entertainment anytime. The Alaska Cabaret, Hotel,
Restaurant and Retailer's Association (CHARR) did not approve of
that and neither did the sponsor. They only want entertainment
during special events.
SENATOR PASKVAN said that the ABC Board would have to do some
sort of investigation and asked if the special events permit had
a fee and what would occur during those investigations.
MS. WOJTUSIK replied that a $50 fee will be charged. The brewery
would apply for the permit and then it has to first be signed
off by law enforcement on the premises of the brewery and then
by the ABC board.
1:39:11 PM
SENATOR PASKVAN asked if five times a year after applying and
paying $50, a brewery special events permit might be issued.
1:39:36 PM
SHIRLEY GIFFORD, Director, Alcoholic Beverage Control Board
(ABC), answered yes, a $50 fee per event, not $50 for the year.
SENATOR PASKVAN asked if the seating is fixed or temporary.
MS. GIFFORD answered that the breweries would like to provide
seating at the counter or the bar whereever the product is
served. She understood that to be fixed seating, not for the
special events permit only. Currently, the brewery does not
allow for seating at the bar.
SENATOR PASKVAN clarified that there will be permanent seating
at the brewery bar.
MS. WOJTUSIK replied yes, during the hours of 8 p.m. to 10 p.m.,
not just during special events.
SENATOR PASKVAN said that being open to 10 p.m. every night with
permanent seating seems different than a brewery.
MS. WOJTUSIK said that was the intent of the bill. She added
that the seating would be for sampling up to the 36 ounces on
the premise, which is up to three beers.
SENATOR PASKVAN asked if there is a limit on how much they can
give away.
MS. GIFFORD replied that the samples are free, but the issue of
what a sample is up in the air and on ABC's agenda for May 16.
SENATOR PASKVAN said it stills sounds like a bar instead of a
brewery to him with fixed seating and selling beer and that he
was trying to understand the bill's language. They can't sell
more than 36 ounces, and he asked if there is a limit on how
much they can give away.
MS. GIFFORD replied that it is one of the arguments he would
hear from industry.
SENATOR PASKVAN assumed that would be from either the
restaurant, pub or beverage dispensary license holders.
MS. GIFFORD replied probably mostly from beverage dispensaries,
because that is the thing they can have their patrons do inside
a beverage dispensary. Under the brew pub license, they can
provide a small sample of the brew pubs beer manufactured on the
premises free of charge, unless prohibited under another
statute. However, the brewery license statute doesn't say they
can provide a small sampling. She didn't see that in the CS
either and didn't know if including small samples with this
permit was intended.
1:44:54 PM
SENATOR PASKVAN said it was his understanding that free samples
can be provided under the brew pub license now; it's just that
you can never charge for them or have fixed seating.
MS. GIFFORD stated he was correct; she didn't see that right
away.
SENATOR PASKVAN asked if the ABC board has a position on SB 128.
MS. GIFFORD replied that the ABC Board does not have an opinion
one way or the other. It wouldn't cost them in terms of needing
additional resources.
1:46:02 PM
CHAIR EGAN wondered how SB 128 would affect the Alaska Brewing
Co. during tourist season.
MS. GIFFORD answered that they would be limited to doing special
events five times a year and she didn't see them being able to
do that to accommodate the tourism season. But they could have
all five special events in the summer.
CHAIR EGAN stated the Alaska Brewery does do special events, but
he was assuming that they would not be prohibited from providing
small samples to tourists who come out and tour the brewery
every summer, like they are doing now.
MS. GIFFORD answered yes, that was her understanding.
1:47:13 PM
BOB WINN, La Mex, Anchorage, said he didn't support SB 128. He
said this bill is an interesting change to the current law, and
said one of the biggest issues as a member of the industry is
that it violates the three-tier system. He said Title 4 was set
up to have three very distinct areas: the manufacturing, the
whole-sale level and the retail level. Allowing this kind of
thing would break that down. As a holder of several expensive
beverage dispensary licenses, he saw them being devalued. He
said:
I'm not quite sure how we can continue to do this. If
we are looking to create a tavern license in the state
of Alaska, we should look to other states and that
could be addressed in a different way, but to
continually water down Title 4 is an extreme concern
of mine.
MR. WINN said these breweries have many ways to do these same
special events. For instance, they could partner with one of the
retailers that is selling their product when otherwise they
would be in direct competition with them. He told King Street
Brewing that is 200 yards away from his Dimond location that he
would be more than willing to take a catering permit and provide
them the same things they are looking for in the bill. It would
be legal and they wouldn't be creating a whole new class of
license or permit.
SENATOR PASKVAN asked his understanding of the difference
between the special events permit compared to fixed seating
every day.
MR. WINN said this bill has been kind of a moving target, but
his draft doesn't address the fixed seating. But he agreed that
fixed seating is no longer a tasting at a brew pub; it becomes a
place to go drink and enjoy beer, and then they've created a
tavern license, which is not the goal. He stated that the goal
of Title 4 is to keep these very distinct parts of the alcohol
industry very separate.
CHAIR EGAN asked if the brewery would be competing with his
business.
MR. WINN replied yes, no question. King Street Brewery is 200
yards away from him, and at this point they are doing small
tastings with tables and chairs for about 16 or 18 people. As
soon as they are allowed to sell these tastings five times a
year and put up a big tent outside of their building (allowed
under catering permits) they would be direct competition for
him.
1:52:45 PM
DANA WALUKIEWICZ, King Street Brewing Co., Anchorage, said that
he supported SB 128. He said that they established King Street
Brewing Co. last year with a lot of hard work and their own
money. It is based in Anchorage and is licensed as brewery under
AS 04.11.130. As a small craft brewery, they primarily
distribute their ales and lagers to bars and restaurants in the
Anchorage area, including La Mex.
He said they have a very small production facility on King
Street with a tap room that is open three days a week from 4
p.m. to 8 p.m. and on Saturday from 1 p.m. to 8 p.m. He said
that he had invested over $500,000 and has spent much time and
holidays planning and building it. They began brewing in August
2011 and hired their first employee a few months ago. They were
able to do that because of the demand they generated through
grass roots marketing originating from their tap room. As a
small startup business, their advertising dollars pale in
comparison to the national and international brands they are
competing against. King Street Brewery utilizes the tap room to
introduce people to the beer and spread the word about their
offerings. He said the tap room is very small, and has five
tables.
MR. WALUKIEWICZ said people are welcome to sample the beer in
their tap room and fill half-gallon jugs called "growlers" for
offsite consumption. He said one of the most commonly asked
questions is where people can purchase the beer and they answer
by telling customers to go to local establishments that sell
their beer; they also list all the bars and restaurants that
carry their beer on their website. At the tap room, they collect
e-mail addresses of interested customers and routinely update
Facebook on when and where their beer is featured. King Street
Brewing Co. has over 250 Facebook followers and 300 people on
their mailing list.
He said he supported SB 128 as it will provide them with initial
opportunities to grow their business which will result in them
being able to hire more employees and promote more local
establishments. Specifically extending the hours of operations
from 8 p.m. to 10 p.m. would make it worthwhile to hire
individuals year-round specifically for the tap room, as they
could stay open for a full six hours. Additionally, the special
use permits would give them the ability to host promotional
events such as the anniversary party that they could use to
promote their product as well as the bars and restaurants that
serve their beer. Eventually, if they have enough demand, they
would like to add personnel solely dedicated to service the bar
accounts.
SENATOR PASKVAN asked what he believed the brewery special
events permit in SB 128 would allow him to do on a day-to-day
basis.
MR. WALUKIEWICZ replied that it wouldn't necessarily change
their operations a lot. Maybe a couple times a year they would
host an event and invite other vendors to participate. It will
give them some control on how the brand is marketed. If they
were to use someone else's catering permit, they lose a bit of
control on how the alcohol is dispensed in using other people's
servers and such. They are trying to promote a brand, and it is
important to promote it in such a manner that is consistent with
how they want the public to see them.
SENATOR PASKVAN asked when the sale of 36 ounces applies.
MR. WALUKIEWICZ answered that it applies to the tap room
consumption, which they are not asking to change. They are
asking to expand that for the special events permit a couple
times a year.
SENATOR PASKVAN said that focuses on the seating issue and on a
daily basis people could come in, sit down and purchase up to
three beers a day.
MR. WALUKIEWICZ answered yes. That is the current law.
SENATOR PASKVAN asked if they could sit down.
MR. WALUKIEWICZ replied that they are allowed to have tables and
chairs in the tap room, but the provision relating to chairs at
the bar, specifically, was deleted. No one really understood why
that was in there.
2:00:15 PM
CHAIR EGAN asked him to respond to Mr. Winn's comments.
MR. WALUKIEWICZ replied that he sells beer to Mr. Winn at La
Mex; he is one of their first accounts. They do not intend to
operate like a bar or restaurant, and that is not the intention
of the bill. Hearing concerns from CHARR, they modified the
language to prohibit live music during normal working hours and
to keep a 36 ounce consumption limit. As a small business owner,
they are looking for every opportunity to market their beer and
he didn't think he was competing with Mr. Winn's business. He
sent people to Mr. Winn's establishment.
CHAIR EGAN said that he could use Mr. Winn's catering license.
MR. WALUKIEWICZ replied that he would remember that, but then he
wouldn't be able to control how their product is served and that
is important in establishing their brand. He said it is
important to control, especially on their own premises.
CHAIR EGAN asked Mr. Walukiewicz what he thought about Mr.
Winn's concern about dilution of his license value.
MR. WALUKIEWICZ said that he thought special event permits would
bring more people to the area.
2:05:22 PM
SENATOR PASKVAN asked if brewery employees are required to take
alcohol service classes.
MR. WALUKIEWICZ replied yes and that they need to be taken every
three years.
2:06:05 PM
DEBRA KASSIK, Kassik's Brewery, Kenai, said that they are family
owned with six employees and have been in business for six
years. They want a brewery permit to help market and grow their
business. When they do something outside the brewery it is
mostly donating beer and glassware and advertising for non-
profit events in the community. She said these community events
don't always bring people to the brewery; the special events
permit for a holiday or a new release is a great way to market
their product. It gives them little bit of extra cash flow, but
it doesn't compete with the local bars and restaurants. They
always promote other establishments and tell customers about
other places to get their beer statewide.
CHAIR EGAN asked the director if she wanted to comment on the
testimony.
MS. GIFFORD clarified that requiring the alcohol server
education course is through a municipal ordinance; breweries are
not required by state law to ensure that their employees have an
alcohol server education course. Current statute covers seven
different types of licenses where an alcohol server course must
be approved by the board, and breweries are not part of that,
although pubs are, and those are two distinct licenses.
2:11:03 PM
CHAIR EGAN asked if the folks at the Alaska Brewing wouldn't be
required to have TAM cards.
MS. GIFFORD answered that they wouldn't.
SENATOR PASKVAN asked the ABC board's understanding of why the
brewery does not provide seats at the counter or bar where the
product is served under current statute in reference to AS
04.11.130(e)(2).
MS. GIFFORD speculated that if you have seating at the bar in
the brewery it is taking on the characteristics of a beverage
dispensary. However, tables are allowed away from the bar if one
exists.
CHAIR EGAN found no further questions, but said he wanted to
hold public testimony open until the next hearing.
[SB 128 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 128 CS blank v B.PDF |
SL&C 3/29/2012 1:30:00 PM |
SB 128 |
| SB0128A.pdf |
SL&C 3/29/2012 1:30:00 PM |
SB 128 |
| SB 128-Sponsor statement.pdf |
SL&C 3/29/2012 1:30:00 PM |
SB 128 |
| SB128 lttr supporting, Kassik's Brewery.PDF |
SL&C 3/29/2012 1:30:00 PM |
SB 128 |
| SB128-DPS-ABC-03-24-12.pdf |
SL&C 3/29/2012 1:30:00 PM |
SB 128 |
| CSSB 211 Actuarial Study 032812.pdf |
SL&C 3/29/2012 1:30:00 PM |
SB 211 |
| SB 128 CS blank v. I.PDF |
SL&C 3/29/2012 1:30:00 PM |
SB 128 |
| SB128 lttr supporting, Kassik's Brewery.PDF |
SL&C 3/29/2012 1:30:00 PM |
SB 128 |
| SB211CS(L&C)-DOA-RB-3-27-12.pdf |
SL&C 3/29/2012 1:30:00 PM |
SB 211 |