State breweries cleared for growth

New law tidies regulations, raises ceiling on production

Carey Ashworth, co owner of Columbus House Brewery, checks on a batch of beer. In Arkansas, 16 breweries produced 10,591 barrels of beer in 2014, up from 2013 when 12 brewers produced 7,023 barrels of craft beer.
Carey Ashworth, co owner of Columbus House Brewery, checks on a batch of beer. In Arkansas, 16 breweries produced 10,591 barrels of beer in 2014, up from 2013 when 12 brewers produced 7,023 barrels of craft beer.

New rules recently passed for Arkansas breweries are designed to clean up confusing language and allow for expanded beer production as the state's fledgling suds industry expands.

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NWA Democrat-Gazette

Carey Ashworth, co-owner of the recently opened Columbus House Brewery in Fayetteville, says she hopes to produce 400 barrels of beer annually.

Act 857 does away with the overlapping classifications in Arkansas' old law regulating breweries establishes only two divisions -- microbrewery restaurants and small breweries -- and allows for some self-distribution of beer. The new rules also raise the maximum amount of beer produced in a microbrewery restaurant from 5,000 barrels to 20,000. For small breweries, the limit goes from 30,000 barrels to 45,000 barrels. There are 31 gallons of beer in a barrel.

"The laws were pretty good to begin with," said Jesse Core, owner of Core Brewing Co. in Springdale. Core's operation includes a brewery and taproom along with a brew pub, with more planned to open this year. "We just needed not to impede the growth of the industry."

Core said that while none of the state's small breweries are even close to producing at capacity the new rules allow, the changes show support for the industry.

Russ Melton, president of Little Rock-based Diamond Bear Brewing Co. and president of the Arkansas Brewers Guild, said the new rules cleaned up a lot of language that made the old standards confusing and hard to regulate. He said the new law is more in line with federal requirements.

In Arkansas, there are 18 "native" brewer permits for beer; three native brewer permits that include provisions for restaurants; and five microbrewery restaurants.

Under the new rules these establishments will be classified as either small breweries or microbrewery restaurants, according to the Alcoholic Beverage Control agency of the Arkansas Department of Finance and Administration. Breweries also will be required to provide production information to the agency.

Sen. Jeremy Hutchinson, R-Little Rock, sponsored the legislation that eventually became Act 857. He said the law as it stood didn't meet the growing market demand created by the new breweries sprouting up around the state.

"It's good for economic development," he said of the new rules.

Over the summer, new rules allowed sales of beer growlers -- containers of 32 or 64 ounces -- in liquor stores, grocery stores and convenience stores, as well as bars that all hold the proper permits. In Arkansas, 35 growler endorsements have been issued, according to the Alcoholic Beverage Control.

The Associated Press reported that Arizona recently increased production limits for microbreweries for the third time in 10 years and that North Dakota and Wyoming have passed legislation allowing for more beer production by local brewers.

According to the Brewers Association, overall beer sales in the United States were up 0.5 percent to 197.1 million barrels valued at $101.5 billion in 2014. For 2014, that came to 145.9 million barrels of noncraft domestic beer and 29.4 million barrels of imported beer. Domestic craft beer came in at 21.8 million barrels, for 11 percent of the total U.S. market. Craft beer sales were valued at $19.6 billion, up 22 percent.

Beer production by Arkansas breweries are still low when compared with the rest of the country. According to the tax division of the Department of Finance and Administration, 16 breweries produced 10,591 barrels of beer in 2014, up from 2013 when 12 brewers produced 7,023 barrels of craft beer.

In comparison, California's 381 breweries produced 2.9 million barrels of craft beer in 2013, according to the Brewers Association. For the year California ranked No. 1 in the U.S. for craft-beer production.

In Fayetteville, Carey Ashworth, co-owner of Columbus House Brewery, said her fledgling operation, which just officially opened its doors, will benefit from the new, clearer regulations.

"We're looking a producing 400 barrels annually, but the rules are good for growth," she said.

She opened the place with co-owner Sam Morgan and founder Jason Corral -- all lovers of craft beer. The brewery and taproom on the 700 block of West North Street sits on Fayetteville's popular trail system.

She said the business took several years from concept to launch, and in the meantime other breweries have popped up in the region. She said that causes her no concern.

"It's a perfect area," she said. "And a perfect time."

SundayMonday Business on 04/12/2015

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