Proposed Legislation for Small Breweries

We recently submitted a letter to both of our local representatives and want to encourage other Virginia breweries to jump on board with our idea. This would help small breweries get off the ground and distribute their beer just as the Virginia wineries do.

Dear Senator Barker / Delegate Anderson:

My name is Sarah Meyers, a native resident of Manassas with a Bachelor of Science in Business Management from George Mason University's School of Management. I have worked in small business for over 14 years and currently work in a small IT firm locally. My husband and I have plans to open the first craft nanobrewery in Manassas. We have been discussing and researching our options since 2009 and have our business plan ready to go. We were ecstatic to learn about the new legislation SB 604 recently passed for breweries in Virginia.

The reason for my correspondence is that we have hit a stumbling block with the three tiered distribution system Title § 4.1-500. Breweries cannot distribute their beer unless a contract is signed withan independent wholesaler. If we began as a large scale brewing operation, this would not be an issue. Nanobreweries can only just break even with the current distribution model. The majority of our revenue is absorbed by the wholesaler, compounded by the fact that there are only a few wholesalers to choose from inour locality, this is a formidable barrier to small VA family business. My observation is that the Virginia wine industry is able to more or less self-distribute, even the smallest wineries can deliver to local stores and restaurants through a state organization, the Virginia Winery Distribution Company, at much less cost than using an independent wholesaler. What makes the wine industry different from the craft beer industry?

I propose a similar state sanctioned beer distribution company, the Virginia Brewery Distribution Company. This would be a large step toward microbreweries getting started in Virginia and once these small, family breweries scaled up, they could utilize the distribution system. Wholesalers would ultimately receive more customers as nanobreweries scaled up their operations! Virginia would be in competition with North Carolina and the Pacific Northwest for the greatest variety of breweries and would be able to supply the distributors with hundreds of different types of quality VA beer.This means more jobs, more revenue and more tourism for the State. As theBrewer's Association mentions, "Growth of the craft brewing industry in 2011 was 13% by volume and 15% by dollars compared to growth in 2010 of 12% by volume and 15% by dollars." It's an incredibly viable industry right behind Virginia's wine industry. We need to give the burgeoning craft beer industry the same opportunity.

The phrase "Virginia is for craft beer lovers"was recently coined to commemorate SB 604.

For entrepreneurs like ourselves, this would be a major milestone and benefit to our great state. Thank you for your time and consideration.

Sincerely,

Sarah Meyers

Co-Founder BadWolf Brewing Company

Jeremy Meyers

Co-Founder BadWolf Brewing Company

This article explains what has happened in the wine industry in Virginia allowing wineries to work with the self-distribution laws. http://www.virginiawine.org/system/payloads/25/original/2010-02-Industry.pdf?1266261463