Oregon Settles Lawsuit with Washington Breweries
Oregon regulators have agreed to settle a federal lawsuit filed by Washington breweries last year, allowing out-of-state brewers to ship beer direct-to-consumers (DTC) in the Beaver State.
Three Washington breweries – Fortside Brewing Co. (Vancouver), Mirage Beer (Seattle) and Garden Path Fermentation (Burlington) – filed a complaint July 26 against the Oregon Liquor & Cannabis Commission (OLCC) in the U.S. district court of Oregon, Portland Division, alleging the state’s law prohibiting out-of-state beer producers from selling, shipping and delivering beer directly to consumers violated the Commerce Clause of the U.S. Constitution.
An agreement on the lawsuit was reached last week, in which the OLCC agreed not to enforce its laws prohibiting out-of-state DTC, Washington Beer Blog reported. The OLCC has also agreed to allow out-of-state breweries to self-distribute directly to Oregon retailers, something in-state breweries are allowed to do.
The OLCC is tied to the new allowances for five years, unless state regulators finalize a law with similar privileges earlier. A bill fitting the requirement (H.B. 2013) is already under review by the Oregon House Ways and Means Committee, which would limit self-distribution to malt beverage producers with annual production under 7,500 barrels.
The bill isn’t the only bev-alc related measure on Oregon legislators’ desks this year. The state is also considering a $0.50 tax increase on bottled spirits. The change, included in Gov. Tina Kotek’s proposed budget, would double the surcharge to $1 a bottle, raising $90 million for the state over the next two years, Oregon Capital Chronicle reported.
A bill raising the excise tax rate on beer and cider from $2.60 per 31-gallon barrels to $33.60 per barrel by 2028 failed to pass through the state House of Representatives earlier this year.
Montana Bill Allowing Sunday and Monday Sale of Spirits Sent to Governor’s Desk
The Montana House has passed House Bill 867, allowing liquor stores to sell on Sundays and Mondays.
Montana, a control state, previously prohibited liquor stores from “between the close of normal business Saturday afternoon up to opening of normal business Tuesday morning.” The state’s Senate approved the bill in April.
Montana is one of seven states that prohibits the sale of distilled spirits on Sundays, according to the Distilled Spirits Council of the United States (DISCUS). DISCUS submitted a letter to Gov. Greg Gianforte Tuesday, urging the governor to sign the bill. The bill would give an “immediate boost to state tax revenues” DISCUS wrote, citing a 10% increase in Pennsylvania spirits sales and 9.2% to 19.6% increase in Oregon spirits sales following similar allowances.
Cocktails To-Go Now Permanent in Maine; Passed Through Michigan House
The sale of cocktails to-go at Maine bars and restaurants is now permanent.
Gov. Janet Mills signed the bill (L.D. 201) late last month, codifying an emergency measure made during the COVID-19 pandemic allowing licensed on-premise retailers to sell beverage alcohol for off-premise consumption.
The law applies to beer, wine and mixed drinks, as long as the beverages are included with a food purchase. Mixed drinks must be in sealed, labeled containers.
Maine is now the 19th state, including Wasington, D.C., to allow cocktails to-go permanently, according to DISCUS. Fourteen states have enacted temporary laws.
“We are glad to see Maine join the nearly 20 other states that have made cocktails to-go permanent in support of local restaurants and consumers,” Andy Deloney, DISCUS senior vice president and head of state public policy, said in a press release. “This popular measure was a critical revenue generator for businesses over the last few years and will continue to provide stability while increasing consumer convenience.”
A similar bill (H.B. 4201) passed through Michigan’s House Tuesday and has moved on to the Senate, which passed its own version of the bill earlier this year. That bill is still being considered in the House. If a permanent version is not passed, Michigan’s temporary law would expire on January 1, 2026.
California Committee Unanimously Passes Bill Expanding Distribution of RTDs
The California Senate Governmental Organization Committee voted last week in favor of S.B. 277, which would allow spirits-based, ready-to-drink cocktails (RTDs) to be sold in grocery and convenience stores.
The bill, sponsored by Sen. Bill Dodd and introduced on February 1, would allow licensed beer and wine retailers to sell “low ABV spirits beverages” in containers no larger than 16 oz. for off-premise consumption. Said beverages must not exceed 10% ABV and contain “distilled spirits mixed with other ingredients, including non-alcohol components or alcohol components.”
Existing legislation requires retailers to obtain a separate license to carry spirits-based RTDs. As a result, beer- and wine-based RTDs are now sold in more than 28,000 locations in California, while spirits-based RTDs are sold in 14,000 locations, according to DISCUS.
DISCUS has made the expansion of spirits-based RTDs, as well as the reduction of states’ excise tax rates on the products, a core part of the trade group’s legislative efforts. DISCUS has argued that “alcohol is alcohol” and products with similar ABVs, regardless of the alcohol base, should be treated equally.
Beer advocacy groups have worked against such allowances, arguing that base matters, and that expanding the reach of RTDs results in a bigger payout for out-of-state liquor producers rather than local beer and wine producers.
Leaders from the National Beer Wholesalers Association (NBWA), Beer Institute (BI) and the Brewers Association (BA) echoed those sentiments in D.C. last week, during the NBWA’s Legislative Conference.
“The lines are blurring quickly,” BI president and CEO Brian Crawford said. “It is important for all of us to wrap our arms around beer and protect beer as a category.”