New Hampshire breweries gained direct-to-consumer intrastate shipping rights and several other new privileges when Gov. Christopher Sununu signed a bill of alcoholic beverage reforms into law earlier this month.
“They built their businesses: Our job is to get out of the way and let them thrive and grow,” Sununu said during a bill signing ceremony at Deciduous Brewing in Newmarket.
Prior to S.B. 125 being adopted into law, Granite State breweries were limited on how much to-go beer they could sell consumers each day, how many retail outlets they could operate, and nanobrewery licensees could only serve 4 oz. samples.
The New Hampshire Brewers Association (NHBA) developed the bill and presented it to lawmakers in November 2020, executive director CJ Haines told Brewbound.
Intrastate DTC Shipping Allowed
Prior to the law changes, New Hampshire allowed residents to receive DTC shipments from suppliers in other states, but its home state breweries could not ship products to residents.
“All the other states could ship into New Hampshire, but none of our breweries could ship to our own residents, which seems mind-boggling to me,” Haines said. “It didn’t seem like it was the New Hampshire way; we weren’t able to do it. So, definitely that was a growing concern for the brewers.
“It gave more incentive for people to order out-of-state beer, rather than even support the local breweries because then they didn’t have to leave the house,” she continued.
Breweries can apply for a free license to ship and deliver beer within the state with a limit of 27 gallons of product under 8% ABV per person per year. All shipments must be delivered by licensed carriers, who must obtain the signature of a legal drinking age adult.
“There’s been five or six [breweries] that have started to price out boxing and subscriptions and all of that stuff previous to the bill passing,” Haines said. “It was a matter of when does this become law.”
To-Go Sales Cap Lifted
“We had a very antiquated law that you could only buy one case or one keg per day,” Haines said.
New Hampshire is a control state and does not levy sales or bottle taxes on alcoholic beverage products at its state-run stores, which often draw consumers from neighboring states in search of deals on wine and spirits.
“That’s why it was such a big win for us,” Haines said. “It’s finally put beer more level with the liquor stores and readily available, because we are held back by the confines of only being able to sell a limited case when you can come to New Hampshire and buy a boatload of booze.”
Satellite Retail Locations Permitted
S.B. 125 also allows beverage manufacturers (breweries with production greater than the 2,000-barrel cap for nanobrewers or 2,500-barrel cap for brewpubs) to open an additional retail location away from their production facilities.
“This brings parity because the wineries in the state gained this ability four or five years ago,” Haines said.
The fee to operate a beverage manufacturers retail outlet (BMRO) is $336 each year; on-premise service is limited to one pint, unless food is available, either through an on-site kitchen or available for delivery from nearby establishments. BMROs can be located anywhere within the state and are not limited by proximity to the brewery’s production facility, “for example if you’re in northern New Hampshire and you want to put one on the Seacoast or vice versa,” Haines explained.
“Because New Hampshire has such a tight real estate market right now, this allows you to have your brewery in a commercially zoned area, and then have the ability to have a small pop-up tasting room on Main Street,” she said.
Nano Brewery Samples and Contract Brewing Clarified
When New Hampshire created its nanobrewery license in 2013 — the first state in the country to do so — craft breweries had not yet adopted the taproom business model and the needs of fledgling breweries were different than they are today. Nanobreweries, which are capped at 2,000 barrels of annual production, were permitted to serve only 16 oz. of free samples per person.
S.B. 125 removed the one pint cap for nanobreweries, so long as food is available onsite or from a nearby purveyor, a privilege that had been granted to beverage manufacturers years ago.
“Now, we know that the hospitality side has taken over and the tasting room experience is more prevalent,” Haines said.
Nanobreweries had been applying for beverage manufacturer licenses or restaurants licenses, which are much more expensive than the $240 nanobrewer license fee, to be able to offer guests more than one pint.
“The threshold for entry and being able to actually serve a pint has now opened the door for smaller scale breweries again,” Haines said.
Prior to the passage of S.B. 125, New Hampshire law dictated that only beverage manufacturers could use contract brewing services from other beverage manufacturers. However, confusion in the law’s language led to several nanobrewers and brewpubs misinterpreting it and contract brewing anyway. S.B. 125 updated contract brewing language to allow both smaller license types to use the services of a larger beverage manufacturer, so long as both parties are within New Hampshire and the nanobrewer or brewpub has been in business for at least one year and brews at least 10 barrels annually.
“That allows them to use one of the larger breweries and not have to have the infrastructure to upgrade the size of their equipment, so they can build their capital before they make that big jump,” Haines said.
Contract brewing buoyed the state’s smaller breweries during the pandemic, allowing them to package beer without making major investments.
“Once COVID hit more and more breweries, because they were either shutting down or relying on fewer people, were like, ‘Well, if I contract brew, then I can get canning done, as well as get my beer done, and then I can get it packaged and out for sale,” Haines said.
Only two of the state’s breweries shut their doors during the pandemic, which Haines attributed to their owners running the companies as hobbies rather than livelihoods.
“There’s some nerves that are starting to pop up,” she said. “Nobody wants to go through what they went through again.”