Missouri: Fill ‘er up? What Missouri’s new law means for craft beer

 

Source: news-leader.com

Thomas Gounley

July 20, 2016

 

Anne Mauldin pours a beer at the Mother’s Brewing Company tasting room in Springfield, Mo. on July 19, 2016.(Photo: Guillermo Hernandez Martinez/News-Leader)Buy Photo

 

A stop at the local convenience store may soon come with the option to fill up more than just your gas tank.

 

Iowa-based Kum & Go told the News-Leader this week that it plans to take advantage of legislation, signed by Missouri Gov. Jay Nixon and set to take effect late next month, that allows retailers to refill jugs of draft beer commonly known as “growlers.”

 

Growlers – which are typically 64 ounces – currently can only be filled at the breweries where the beer is produced, and in a very limited number of restaurants.

 

Spokeswoman Kristie Bell said Kum & Go hasn’t decided which locations will offer the service. But she said the company’s new Marketplace concept stores – which are in the Springfield market – “were designed with a space that could easily be retrofitted for a growler station.”

 

“We’ve opened a few stores in Iowa this year with growler stations, and they’ve been a popular feature with customers,” Bell said.

 

Growlers are most popular with fans of craft beer. The leaders of Springfield’s three microbreweries, however, say they were dismayed to see Nixon sign Senate Bill 919 on July 1. It’s not that the growlers are a problem, they say – it’s that they don’t make up for another provision in the law.

 

“I am thrilled to have growlers in Missouri,” Mother’s Brewing Company owner Jeff Schrag said. “I just hate that it came with the cooler thing.”

 

Schrag, who is also head of the trade association Missouri Small Brewers Guild, was referencing an aspect of the law that allows brewers to lease branded refrigerated units to retailers. Schrag said only multinational beverage giants like Anheuser-Busch Inbev have the financial capabilities to make such arrangements and that Inbev pushed for the legislation in an effort to take greater control of the market.

 

“This is about the slow annihilation of craft beer in America,” he said in one interview this month. “They are going to do it by a thousand tiny cuts.”

 

Marcelo Abud – region vice president for Anheuser-Busch – said in a statement issued to the St. Louis Post-Dispatch that the company was pleased to see final approval of the legislation.

 

“This new law helps enhance the position of beer in an increasingly competitive retail landscape by giving retailers the ability to provide more consumer choice and improve the customer experience with more options to refrigerate product and wider sales of growlers,” Abud said in the statement.

 

The cooler provision goes into effect in January and will sunset in three years unless the legislature extends it.

 

Schrag, along with Springfield Brewing Company Managing Director of Operations Bryan Bevel and Heart of America Beverage Company President Harwood Ferguson, said in separate interviews that they see the new law as a muddying of what is known as the three-tier system. Put in place after the repeal of Prohibition, the system requires producers of alcoholic beverages to sell products to distributors, who then sell to retailers.

 

Ferguson said distributors like Heart of America typically work with retailers to determine the placement of various products. The three said they see the new law as a way for multinational beverage giants to bypass the distribution step and influence retailers.

 

The law signed by Nixon states that retailers can stock any products in a leased cooler regardless of “any other provision of law, rule, regulation or lease to the contrary.”

 

The local beer industry representatives, however, said they expect the coolers will only stock products sold by the company leasing them. When speaking about how the process might work, they all used Anheuser-Busch InBev as an example.

 

“Really and truly there was one voice that was pushing for this, and it was Anheuser-Busch InBev,” Ferguson said. (Heart of America distributes brands including MillerCoors, Heineken USA and Mother’s Brewing Company; it doesn’t distribute InBev products).

 

Schrag said InBev will likely offer some sort of incentive to prompt retailers to lease the coolers, like discounting its beer to make up for the cost. Ferguson said the company would likely pull the lease agreement if products other than its own were put in.

 

If a convenience store added a leased cooler with products from one company while maintaining its previous stock of multiple brands, that one company would account for a larger percentage of the store’s options, Ferguson said.

 

Buz Hosfield, owner of White River Brewing in north Springfield, said he opposed the cooler law but was unsure how much it would impact the company. White River is still largely distributed locally, he said, and that has helped the company in stores.

 

“We’ve had such good luck getting good shelf space with our cans,” he said.

 

Rep. Robert Cornejo, R-St. Peters, who sponsored the legislation, told the Post-Dispatch that he felt the provision for growlers in the law would offset any negative impact small brewers see in connection with the cooler leases.

 

“I think the small brewers are blowing this out of proportion,” Cornejo said. “I think this will help them tremendously.”

A growler filling station inside a Kum & Go convenience

 

A growler filling station inside a Kum & Go convenience store. Stations will be added to some Missouri locations. (Photo: Courtesy photo)

 

Under the new law, growlers between 32 and 128 ounces can be refilled by staff at any venue with a package liquor license, like grocery and convenience stores. The average bar and restaurant doesn’t have a package liquor license, and won’t be able to do refills.

 

Iowa-based Hy-Vee told the News-Leader it plans to add growler stations to some of its stores, but hadn’t decided which ones.

 

Hosfield said he thinks the new growler law – which takes effect Aug. 28 – will help White River near the outer edges of its distribution area, where customers might not be willing to drive to the brewery for a greater selection.

 

Schrag said he supports expanded growler sales, and that the fact he opposed a bill expanding availability shows how negatively he views the cooler provision. He noted that Arkansas recently passed a similar growler law, however, and experience there suggests growler purchases can be something of a fad.

 

“Growlers are a novelty item,” he said. “Initially, absolutely, people will line up for growlers. But when you talk to people in Arkansas, it drops off.”

 

Bevel had a different message: By all means, buy Springfield Brewing Co. beer. But please don’t buy it in a growler.

 

“It’s the worst way to handle beer,” he said.

 

The process of refilling a growler, Bevel said, mixes oxygen in with the beer, which quickly impacts quality. Springfield Brewing is the only area brewery that doesn’t sell growlers. Instead, the brewery sells “crowlers” – 32-ounce cans of beer that are filled and sealed on demand, using a process that limits oxidation.

 

Bevel said all he could do about the new law is keep it in mind the next time he goes to vote.

 

“We’ll just keep moving forward and making great beer,” he said.