'Surly bill' wins support of Senate panel

Surly Brewing Company
Surly Brewing Company's proposed $20 million brewery and restaurant.
Surly Brewing Company

A Minnesota Senate has panel unanimously approved a bill that would allow breweries in Minnesota to sell alcohol at their establishments.

Lawmakers started considering the "Surly bill" after the Brooklyn Center brewery announced plans to build a $20 million brewery, restaurant and entertainment center in Minnesota. Those plans violate a long-held system that separates breweries from distributors and retailers. The Senate bill aims to change that system.

Some of the nastiest political fights at the State Capitol center around changes to liquor law. In the past, wine in grocery stories, Sunday liquor sales and other liquor legislation was heavily opposed by liquor lobbyists and their employers who worried a law change would change the way they do business.

Those lobbyists raised similar concerns when the Surly proposal was introduced in February. But a business friendly, Republican Legislature and two key issues on the minds of lawmakers made the Surly proposal popular.

Omar Ansari, the owner of Surly Brewing Company, hit on those key issues during his testimony.

Owner of Surly Brewing Co.
Omar Ansari is the owner of Surly Brewing Co. in Brooklyn Park, Minn. He testified at a Minnesota Senate committee hearing Wednesday, April 6, 2011 in favor of a bill that would allow him to expand his brewery and serve beer at the same location. The committee approved the measure.
MPR Photo/Tom Scheck

"With this expansion, we'd be able to distribute more widely in Minnesota and nationally. That means more jobs and more revenue," said Ansari. "And it sure would be nice for Minnesota to enjoy the tax revenues from people enjoying our beer in other states."

Ansari said his plan would create 85 construction jobs and 150 permanent jobs at the new brewery. Ansari told the committee that many states, including Wisconsin, already allow brewers to serve beer right where it's made.

Ansari's efforts were helped by a loyal group of followers who took to Facebook, Twitter and other social media sites to lobby in favor of the proposal.

Several of those supporters, along with the owners of other small breweries, talked about their respect for craft beer during committee testimony. Joe Giambruno of Victoria said he first became interested in craft beer when he lived in North Carolina.

"That education and interest I developed there led me to have a greater respect for beer and the brewing process," he said. "The strong respect I have makes me a much more responsible drinker. And I don't think you're going to get that respect and responsibility if you have limited choices in your beer when you turn 21, and you can just go to a store and get a big-brand beer."

"We'd be able to distribute more widely in Minnesota and nationally. That means more jobs and more revenue."

Ansari's efforts have also attracted support from the mayors of Minneapolis and St. Paul, who both would like to be home to the new Surly brewery. The bill's author, Sen. Linda Scheid, DFL-Brooklyn Park, said Surly Brewing Company, Fulton Beer Company and other Minnesota based breweries could attract tourism dollars from beer aficionados.

"This is a real big deal in California, Oregon and Colorado. They become destinations for people who are interested in beer," she said. "Just like wineries have generated interested in wine across the country, craft breweries have also also generated enormous interest."

Scheid was also careful to note that even though the bill was drafted to address Surly's proposal, other Minnesota brewers like Summit, Schells and others might benefit.

Scheid worked to change the bill to ease the concerns of the Minnesota Licensed Beverage Association, which represents 2,000 bars, restaurants and package stores. For example, her bill only allows a beer company to have one tap room in the state, regardless of the number of breweries.

The bill would also forbid brewers who make more than 250,000 barrels a year from selling beer at a brewery. That means larger breweries like Miller or Coors couldn't enter the market and sell their beer below cost.

Joe Bagnoli, a lobbyist for the Licensed Beverage Association, said his organization still has concerns with the bill but is no longer outright opposed to it. He said some of his members are concerned about their bottom lines.

"Over the last five to six years, we've had .08 [lower drunk driving standard] go into effect, we've had a smoking ban go into effect and we had increases in the minimum wage. All at the same time that we have the worst economic downturn in the last 50 years," Bagnoli said.

The bill now moves to a vote in the full Senate. A similar bill will get a hearing in the Minnesota House next week.