A new state law allows Rhode Island brewers to sell twice as much beer directly to consumers than they could before, but local beermakers say the measure doesn’t go far enough to help them compete with their counterparts across state lines.
Local craft brewers had lobbied lawmakers to increase the limit on direct consumer sales from one case of canned beer to 10 cases. Instead, the legislation passed by the General Assembly last session and signed by Gov. Daniel J. McKee increased the limit to two cases per customer.
Matthew Gray, president of Ragged Island Brewing Co. in Portsmouth, said the two-case limit will keep him at a competitive disadvantage, since customers can buy unlimited amounts of beer directly from brewers in neighboring Massachusetts.
“My brewery is maybe 10 minutes from Fall River,” Gray said. “If you go there, you can buy the entire place’s beer if you want. We cannot compete with our neighbors.”
Gray is the marketing chairman for the Rhode Island Brewers Guild, which represents numerous local brewers, but he said that he’s not speaking for the organization with his remarks about the new measure. But Gray said he and other brewers were pushing for and expected 10 cases per customer in the updated law, which also allows distilleries to sell double the amount of liquor directly. But when the bill came up for its final vote, it had been changed, he said.
The bill’s sponsor, Rep. Justine Caldwell, D-East Greenwich, said the version allowing up to 10 cases to be sold per customer received “broad bipartisan support” in the House. But she said the bill lost steam in the Senate after retailers, wholesalers and distributors opposed it.
‘We cannot compete with our neighbors.’
MATTHEW GRAY, Ragged Island Brewing Co. president
While Caldwell said she empathized with the Rhode Island brewers, she said the relaxed limit is a step in the right direction.
State Sen. Melissa Murray, D-Woonsocket, who sponsored the bill in the Senate, noted that, even with the new law, Rhode Island remains the most restrictive New England state when it comes to sales at craft breweries and distilleries. She said New Hampshire and Vermont allow brewers to sell 10 cases directly to customers, Maine allows five and Connecticut allows three.
And while she was happy the compromise bill garnered support from McKee, the original 10-case limit would have meant a bigger economic boost. “We know that these businesses are destinations for craft beer and spirits enthusiasts,” she said. “Increasing the ability to sell more product could have big benefits for surrounding restaurants and shops and for our state’s tourism economy.”
McKee spokesperson Alana O’Hare called the new law a “positive step forward” for Rhode Island’s more than 20 craft brewers and distillers, adding that the governor was open to revisiting the law next year.
But a beer-distribution industry group said it’s important to maintain the three-tier system of beer producers, wholesalers/distributors and retailers. Without it, some companies could potentially skirt excise taxes, federal taxes and regulatory accountability, said David Christman, the National Beer Wholesalers Association’s vice president of state affairs.
“When a supplier is serving all three tiers under one roof, it presents an opportunity for evasion, without a paper trail behind that,” Christman said.
Gray said he not only hopes for an increase in capacity to sell cases of canned beer, but also the ability to sell kegs directly to customers, which is prohibited in Rhode Island.
“If someone walks through the door and wants a keg now … even though the keg is sitting right next to me, I have to send it to a distributor, who can get it to a retail store that can sell it to you there in a week sometime,” Gray said. “Plus, I have to sell that keg at a massive discount so the retailer can mark it up and make money off it.”
Marc Larocque is a PBN staff writer. Email him at Larocque@PBN.com.
