The 2016 legislation was a collaborative effort among multiple alcohol-related industries, resulting in the defeat of 83 years of special-interest regulations stemming from prohibition. The game-changing reform opened markets for local brewers, granted property rights absent since 1920, and — more importantly — spurred innovation and job growth across Nebraska.
One year later, brewers are scrambling to save last year’s reform from a bill drafted in secrecy between wholesalers and the very same state legislator who sponsored last year’s free-enterprise bill.
LB1105, sponsored by Sen. Tyson Larson passed 45-2 in 2016. A major part of the bill allowed breweries to operate up to five total retail locations per license, moving beer between their locations without a distributor. If a brewery brewed more than 20,000 barrels of beer a year, the law let breweries keep ownership of their retail locations, where in the past all retail or brewpub locations would need to be closed or sold, destroying dozens of jobs in the process.
Although the change may seem trivial, in the world of alcohol regulations brewers face some of the most arcane regulations, governing nearly every step from production to bringing beer to market. Even the smallest reform in licensing or securing property rights could be a game changer for brewers trying to expand their businesses and keeping up with demand ahead of the competition.
Should the recently introduced LB632 become law, Nebraska brewers would once again be in danger of losing business and sacrificing jobs in the face of stifling regulations. It would mean halted growth and having to rethink hiring expectations, perhaps even layoffs. The bill would create capricious hurdles for how beer could be distributed and sold in the Cornhusker State.
“We were completely caught off guard,” Kavulak said. “We had no notice any legislation was going to be brought up this year. Neither the Brewers Guild or the state Liquor Control Commission were consulted.”
“Come January 18, the last day to introduce legislation, we face a legal battle with disastrous consequences for small brewers across the state,” he added.
Adding to the surprise, neither Sen. Larson nor the state Wholesaler Association would speak to the Brewers Guild for weeks after multiple requests for clarification.
“We had no idea why he would do this, and still have no idea for the motivation behind this complete turnaround by Sen. Larson.” Kavulak added. “Last year, brewers brought together wholesalers, the state Liquor Control Commission, and legislators to the table to negotiate the unopposed reform. Now, without notice we find ourselves shocked that an unopposed bill would be slated for repeal one year later. This bill threatens dozens of brewers growth so we all felt compelled to take action.”
Wholesalers across the country have deep lobbying roots and deep pockets to oppose any free market-oriented regulation. Typically, wholesalers draft and support legislation that forces brewers to use wholesaler services law. Brewers and wholesalers are fighting over basic private property rights in North Carolina, Texas, and Florida.
The laws that small brewers are trying to have repealed are the same laws large corporations such as Budweiser, Miller and Coors have used since prohibition to squelch competition. The excuses are many but supporters of these prohibition era regulations will cite safety concerns, health issues, and “fairness.” However, these laws have nothing to do with any those issues and everything to do with lobbying to create a state-sanctioned monopoly at the expense of entrepreneurs, consumers and economic opportunity.
Brewers like Kim Kavulak say they only want to pursue their craft free from coercion. These entrepreneurs are only looking to sell a quality product while creating a responsible and lively culture around our beloved brews. Kavulak has enough on her plate as a small business owner without having to battle against billion-dollar companies using politics at the expense of others.
Be on the lookout for KillTheBill events in Nebraska, but odds are no matter where you live local brewers are brewing up a battle for liberty and may soon need your support too!
To hear the interview on the “Free To Brew” podcast with Kim Kavulak click here.
(Colum first printed at Opportunity Lives)