Sen. John Valentine, R-Orem, presented his liquor-reform bill at a Senate hearing Monday. While the bill focuses on reorganizing the Alcoholic Beverage Control Commission to have new oversight and authority, the committee’s discussion focused on an amendment to provide tax relief to local breweries that was cut off by Sen. Michael Waddoups, R-Taylorsville, at the beginning of the hearing.
Senate Bill 66 reorganizes the authority of the liquor commission that oversees issues of liquor licenses in the state. With numerous critical audits in the past two years and the former Director of the Department of Alcoholic Beverage Control, Dennis Kellen, being blasted for mismanaging funds and awarding special contracts to his son, the DABC has been under the Legislature’s spotlight since the summer of 2011. Valentine’s bill seeks to consolidate more of the liquor commission’s power with the Governor’s Office, who will appoint the commission chair. The commission will follow legislative statute and the new director of the DABC will have to file regular reports of financial activities with the commission.
The department will also have a separate internal-audit division that will report directly to the commission on the department’s financials.
In a proposed amendment that was some measure of support for local brewers, the bill proposed to redefine “small breweries” in Utah code to allow breweries that produce 60,000 barrels of beer a year or less to be considered “small,” whereas current statute sets that ceiling at 40,000 barrels or less a year. The amendment also allowed the ceiling for the consideration of a small winery to be raised from 20,000 gallons of wine to 40,000.
The amendment, however, was cut off at the outset by Senate President Waddoups. The new definition would have given local microbreweries the ability to pay smaller markups on their products to the state while producing more product, a concession Valentine thought was worth considering since much of local breweries' products are exported out of state.
Waddoups, however, saw the measure as leading to overconsumption of alcohol. “By expanding this to larger breweries, it will increase consumption,” Waddoups said. “I think it will also add to the DUI problem,” he said in reference to a potential increase in arrests of Utah motorists for driving while intoxicated.
Greg Schirf, founder of Wasatch Beers, representing the Utah Brewer’s Cooperative, assailed Waddoup’s logic, saying that by disadvantaging local breweries it only pushes consumers to spend more on large national breweries that save costs by being headquartered outside the United States. Schirf said that if local breweries don’t grow more, Utahns will buy Budweiser products owned by a Belgian company or by Miller products owned by a South African company, for example.
“We’re not going to have less beer sold in Utah—we’re just going to have less Utah beer sold in Utah,” Schirf said. “This needs to be reconsidered and rethought -- it’s like we are being punished for being successful.”
Regardless of the lost incentive for Utah’s local breweries, the bill advanced out of committee with a favorable recommendation.
If you want to find out who your legislator is so you can contact them about this bill, click here. If you want to contact Sen. Valentine about his SB 66, click here. For more updates from the 2012 Legislature, follow @EricSPeterson on Twitter.