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So the State of Michigan Walks into a Bar

If you seek a pleasant beer, look about you. That is what Michigan’s state motto should be. Home to the world’s third and fifth best breweries, the Great Lakes State is ranked fifth for the most breweries, microbreweries, and brewpubs per state in the nation.

Despite the natural demand for a well-crafted brew, the state government insists on artificially manipulating the market. Regulations limit consumer choice, create higher prices, and make it more difficult for companies to succeed. Barrel cap laws, state excise taxes, and hours of operation statutes are just a few of the ways legislators determine the manner in which breweries function. If you are still not sure why governmental interference in the economy is wrong, watch this video.

To better understand the overreach into your beer, I have broken down the regulations by license type. In Michigan, there are three as of 2014: brewer’s, micro-brewery, and brewpub licenses.

Brewers can produce an unlimited amount of beer. However, they can only sell the beer to licensed wholesalers rather than directly to retailers. These breweries can sell their beer for on-premises consumption at only one brewing facility, but can sell it for off-premises enjoyment at any of its facilities. Sampling is allowed in an on-site hospitality room. Founder’s Brewing Company and Bell’s Brewery, Inc. are the only licensed Michigan breweries.

Micro-breweries are limited to manufacturing up to 60,000 barrels of beer annually, including out-of-state production. Once again, these businesses may sell beer to licensed wholesalers, but not to retailers directly. If a microbrewery produces less than 30,000 barrels per year, then they may sell directly to consumers for both on and off-premise consumption without additional licensing. Sampling their beers is allowed under this type of license.

Brewpubs are only permitted to produce up to 18,000 barrels each year. In addition, these establishments must hold another license to permit on-site consumption. Furthermore, the brewpub must operate a full-service restaurant that provides for at least 25% of gross sales from food and non-alcoholic beverages. Brewpubs cannot sell their beer to wholesalers or retailers, but can sell directly to the consumer.

All three types of licenses are restricted in how they can purchase glasses, coasters, and other barware with their branded logos on them. Bars must buy these items from third-party retailers rather than wholesalers, a piece of legislation that Bell’s Brewery founder Larry Bell thinks is “silly.” Bell has been a key player starting and keeping the momentum for deregulation of the market. In 1992, he was a vital component in the push to allow brewpubs to sell their beer by the glass.

Despite the recent regulatory rollbacks, the fight for a free market is far from over. Imagine the increase in ratings, and thus economic growth, if Michigan allowed the beer industry to flow freely from the tap. Michiganders – contact your local legislators, treat them to a cold one, and then demand your economic freedom back.