New York craft beverage producers could have an easier time getting their products in the hands of consumers if Gov. Andrew Cuomo gets his way this year.
Noting the success of New York’s growing craft beverage industry in his annual State of the State address last Wednesday, Gov. Cuomo listed the need for new regulations as a top priority in 2016.
“Breweries [in the state] have increased sixfold and distilleries and cideries sevenfold. We have made it easier for these businesses to grow and do business by revising some of our laws,” he said. “ We have to overhaul the Prohibition-era [State Liquor Authority] laws that are way overdue and are an obstacle to growth, and we have to do it this year.”
The issue was echoed in the governor’s accompanying economic agenda for the year, which featured several proposals to update state regulations impacting the way New York craft beverage makers operate — including plans to improve laws governing direct-to-consumer and online retail sales.
Cuomo urged lawmakers to put forth legislation that would “modernize and simplify the Alcoholic Beverage Control Law” by clearly defining permits allowing beverage makers to sell their products directly to consumers. The official proposal said the current ABC laws were filled with “arcane restrictions,” and also noted the state’s plan to establish and pass comprehensive legislation for sales of alcohol online.
The agenda also called for new tax cuts for small cider makers — extending to them the allowance currently enjoyed by small craft brewers. If passed, the new law would grant $2 million in tax credits to cideries producing less than 60 million gallons — about 19 thousand barrels — of cider annually. Additionally, the governor proposed exempting alcohol taxes on free samples that beverage makers give to consumers.
The proposed changes came as a welcome surprise for at least one New York startup. When reached for comment by Brewbound, Jon Mervine, co-founder of soon-to-launch Split Batch Brewing in Rochester, said he hadn’t heard about Gov. Cuomo’s proposals but was excited about the potential impact they could have on his business.
Mervine, who co-founded Roc Brewing but has since departed the company, also pleaded for simplicity. He said the current ABC laws are so complex that new businesses often resort to paying cost-prohibitive legal fees — hiring lawyers to help them for upwards of $500 an hour.
“I’ve been part of a couple startups now, and one of the greatest impediments to getting up and running is the application process for direct-to-consumer sales permits,” said Mervine. “If that could be clearer, as a producer it would be much more effective to know what kind of rules you’re playing with.”
Mervine was also encouraged by the prospect of being able to sell his beers online and believes that allowance would dramatically improve sales for New York breweries that self-distribute within the state. He also predicts it would increase the industry’s economic impact on the state.
“You’re not only creating economic opportunities for the breweries themselves but the industry and state economies overall,” said Mervine. “You’re gonna create jobs with that. Breweries are gonna hire people for online marketing, people to do SEO (search engine optimization) and web design.”
Small breweries aren’t the only industry stakeholders pleased with the agenda. According to Paul Leone, Executive Director of the New York State Brewers Association, business owners in all tiers are happy with the attention lawmakers pay to the craft beverage industry.
“I think what the government is doing in the state of New York as far as helping the craft beverage industry is really incredibly,” said Leone. “They see the economic impact that all four categories (brewers, distillers, winemakers, cider producers) have and are doing whatever they can to support growth.”
The proposals come just three months after Gov. Cuomo formed a committee tasked with advising the state how it can better support the beverage industry. Leone acts as a consultant to the two brewery executives on the board, Nick Matt, CEO of F.X. Matt, and Steve Hindy, co-founder of Brooklyn Brewery. Brewers also want to get rid of a law that bars alcohol from being sold before noon on Sunday, he said.
For his part, Mervine said he’s looking forward to the day when he and Gov. Cuomo can toast the changes over a pint of Split Batch.
“God bless the state of New York,” he said. “I love Cuomo, I love what he’s doing and I can’t wait to have a beer with him.”