Alaska lawmakers are trying to slash breweries’ serving sizes

Correction: A one-third cut in brewery sample sizes would be a decline from 36 ounces to 24 ounces, not 12 ounces as originally written here.

Heeding the call of bar owners across Alaska, the House Labor and Commerce Committee voted unanimously late Friday to slash serving sizes at distilleries, breweries and other alcohol manufacturers by one-third.

Those manufacturers, through on-site tasting rooms, are allowed under existing state law to serve limited quantities of alcohol directly to consumers.

In an amendment to Senate Bill 76, a wider reform of the state’s alcohol laws, the committee cut those limited quantities. For breweries, the limit falls from 36 ounces per day to 24 ounces per day. For distilleries, the limit goes from 3 ounces per day to 2 ounces. Wineries and cider manufacturers would see similar cuts.

“We are not happy and obviously not supportive of that,” said Ryan Makinster, director of the Brewers’ Guild of Alaska, by phone after the vote.

“It’d be basically taking rights away that breweries have built their business around,” he said, then added that breweries have a lot of supporters across the state.

“We’re going to look at them for help,” he said.

SB 76 is not yet law. It advanced to the House Finance Committee late Friday, and if approved there, must go to the full House for approval.

If House lawmakers approve, it will return to the Senate, where lawmakers will be asked to confirm the changes made by the House. Only then will it go to Gov. Bill Walker, who may veto it or sign it into law.

Rep. Sam Kito III, D-Juneau and chairman of the committee, said Friday that moving a bill forward involves trying to find balance among competing interests. He compared the process to balancing a “multi-winged teeter-totter.”

“I do think that while you’re never going to have a piece of legislation that you can have 100 percent support for … I do think we’ve got a product that’s in fairly decent shape to be able to move forward,” he said of the bill.

SB 76 is a 113-page tome of legislation that attempts to update Alaska’s alcohol laws, which saw its last significant revision more than 30 years ago. The bill is the product of six years of work by a panel of stakeholders organized by the Alaska Alcohol and Marijuana Control Office.

The bill has broad support from both those who sell alcohol and those who deal with the problems it causes.

As the bill has advanced in the Legislature, however, it has become embroiled in the bar wars — the economic friction caused by Alaska’s changing drinking habits and prior legislative attempts to cope with demand.

As the Empire reported last year, Alaska is drinking less beer, more liquor and more wine. It’s drinking less mainstream beer and more craft beer. It’s also drinking less alcohol overall.

The Legislature met this changing demand by allowing breweries to operate “tasting rooms” that sell limited quantities of beer to be consumed at the brewery. In 2014, the Legislature again tried to meet demand by allowing the same privilege to the state’s growing number of distilleries.

But as the number of distilleries and breweries has grown, owners of traditional alcohol businesses, like bars and liquor stores, have begun pushing back. In public, and to the Legislature, they have said that breweries and distilleries are blurring the line between what is a bar and what is not.

Of particular concern over the past year is the issue of cocktails, which are served by distilleries across the state.

On Wednesday, almost two dozen bar owners and package store owners testified in front of the Labor and Commerce Committee to urge tougher regulation of alcohol manufacturers that sell directly to the consumer.

“There’s only so much spendable money out there in Alaska, and there’s only so many customers,” said Pete Thibodeau, who holds several Juneau liquor licenses. “The pie doesn’t get bigger, OK?”

The supply of licenses for bars is much more constrained than the supply of licenses for distilleries and breweries. On the open market, a bar’s alcohol license is worth $250,000 or more. A comparable license for a distillery or brewery can be bought over the counter from the state for less than $3,000.

With so much money at stake, debates over the proper place for distilleries, breweries and bars have grown tense.

“Based on testimony that we had here, there’s still some tension, I guess, in some of the trade groups and stakeholders,” said Rep. Adam Wool, D-Fairbanks and a bar owner.

The bill does offer some support for manufacturers. A clause that would have required them to sell 80 percent of their product wholesale was removed in earlier discussion. The version of the bill approved by the Labor and Commerce committee includes elements of House Bill 269, which allows distilleries to serve mixed drinks legally.

Brandon Howard, owner of Amalga Distillery and the only manufacturer present during Thursday night’s discussion, said he thinks the impact of the changes made by the Labor and Commerce Committee will affect breweries more than distilleries.

“I think the public is going to be none too happy about it.”


• Contact reporter James Brooks at jbrooks@juneauempire.com or 523-2258.


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