Group Opposes Liquor Law Change, Surly Brewery

Surly Brewing says a new $20 million brewery and restaurant in the Twin Cities would bolster the hospitality industry and create up to 150 long-term jobs. But not everyone is in favor of the plans-and one group intends to fight to maintain current laws that prohibit large brewers from selling directly to consumers.

On Monday, Surly Brewing Company announced plans for a $20 million “destination brewery,” complete with a restaurant, bar, and event center. But the state's current liquor licensing laws prohibit large brewers from building their own bars or restaurants at their breweries and selling beer directly to consumers.

Brooklyn Center-based Surly aims to change that law by introducing legislation next week, and the brewery's founder and President Omar Ansari has hired St. Paul-based lobbying firm Cook Girard Associates to help in his fight.

But they'll face opposition from the Minnesota Licensed Beverage Association (MLBA).

The group's Web site states that it is “the only association exclusively dedicated to the protection and promotion of the retail beverage alcohol industry,” and it counts among its legislative accomplishments current state law that keeps grocery stores from selling wine.

According to MLBA Executive Director Frank Ball, the group represents bars and restaurants in all of the state's 87 counties, and its focus is to “maintain the integrity of the three-tier system”-which comprises manufacturers, distributors, and retailers.

“We're afraid [Surly's proposed bill] would impact our businesses,” which are part of a “grieving industry” that has been hit hard by the recession, he says. “If you're going to be a brewer, be a brewer. But you have to play by the rules.”

At the core of the MLBA's argument is that brewers that pump out as much beer as Surly does need to go through specific distribution channels to reach retailers in order for the industry to remain competitive. “Quite frankly, [Ansari] could sell the beer at a fraction of the price” of bars and restaurants. “And if he doesn't play by the rules, we'd oppose his bill aggressively.”

Ball contends that changing the law would open the door for large national breweries like Budweiser and MillerCoors to similarly sell directly to consumers and undercut local retailers. “It's a slippery slope,” he says.

Ansari acknowledges that changing the law will require work, but he's focused on creating “a complete beer experience” that could become a part of the metro area's “cultural fabric,” much like other attractions such as the Mall of America and Target Field.

“This whole project isn't an easy one, but that's how we do it at Surly,” Ansari said in a Tuesday phone interview. “If people aren't interested in adding jobs” and supporting a bill that fuels the economy, he's not interested in “just being a bigger brewery.”

Ball acknowledges that Surly has built an impressive business, but says that Ansari “has gotten so good that he's bubbled up from a small microbrewer to become a huge manufacturer.”

“The linchpin with Surly is that it's a professional manufacturer, and he shouldn't be able to sell it out his back door,” Ball said.

And he's not alone: A “large liquor coalition opposes this bill”-a coalition that includes the Minnesota Municipal Liquor Association, the Minnesota Beer Wholesalers Association, and the Teamsters, because Surly wouldn't need union drivers to sell its beer on-site, Balls says.

Minnesota's liquor laws are often compared to more lax regulations in neighboring states like Wisconsin, but Ball says “we can't compare grapes to apples,” as those states “monitor their three-tiered systems differently.” He declined to comment further on whether states that do allow large breweries to sell beer on-site have seen an adverse affect on surrounding retailers.

Surly argues that the laws in many other states allow for the type of expansion it has proposed, and it has only helped the “beer scene” and bars in the area flourish.

In Minnesota, smaller breweries, classified as brewpubs, can sell their products on site. Similarly, grape growers can buy licenses that allow them to sell directly to consumers if they remain under a certain production cap-and the MLBA supports these regulations, “because those smaller amounts wouldn't impact the entire industry,” and they promote tourism, as travelers are attracted to the wineries.

But Ansari says that Surly's proposed brewery would create a hub for “beer tourism,” in turn benefiting the local hospitality industry. And the company is also touting its proposed expansion as a boon to the local economy, predicting that the brewery would help create as many as 150 permanent jobs and up to 85 construction jobs.

Surly's announcement immediately sparked a debate in the social media sphere and garnered support from many fans who voiced a willingness to contact state legislators to support the bill. Some retailers also showed support, like France 44-a wine and cheese shop with locations in Minneapolis and St. Paul-that announced via Twitter that it would offer discounted Surly beer to support the brewery's “awesome expansion/brew pub plan.” And according to Ansari, other big players in the state's brewing industry-including Summit and Schell's-“are signed on to the project.”