Legislative Update: Rowley Farmhouse Ales offers another perspective on HB 343

The legislature is close to wrapping up for the 2023 session, but the folks at Rowley Farmhouse Ales asked if I would sit down and have a chat with them about House Bill 343, a bill they are working to get passed. To be fair, I didn’t know anything about the bill, only that there were a few differing opinions floating around about it. But, in the interest of regulatory consistency, I agreed to hear them out last Friday afternoon to see what this bill might mean for the New Mexico craft beer industry.

DSBC: Tell us about House Bill 343. What is it, and why was it proposed?

Kaplan: So, we decided to hire a lobbyist here at Rowley Farmhouse Ales to get a couple laws changed here in New Mexico that were based on current laws only favorable to wineries. And, we felt we could very easily just have breweries attached to them. Namely, the big one is for the direct-to-consumer shipping license. There’s currently a permit for that.

DSBC: For wineries.

Kaplan: That’s right. And, we wanted to add breweries to that. We also wanted to add breweries to the out-of-state, wine festival and competition license laws as well.

DSBC: For those not familiar, what is the bill currently proposing?

Kaplan: So the main focus of HB 343 is to allow a brewery to ship directly to consumers. So a brewery or manufacturer would be able to get another permit for a little extra money on top of their brewer license, And, that would give them the right to ship directly to customers, in a limited amount. Basically, this would be for clubs. That’s what this is for. Wineries have been using it for decades. Forty-eight states allow wineries to do this legally (and) 15 states have legalized it for breweries. And, we’re just trying to get parity for that, because we feel that our beer is very niche and does better in a direct to consumer environment.

DSBC: Rowley Farmhouse Ales currently has a beer club, don’t you?

Kaplan: No, we don’t have one. We tried to have one, but it became impossible to get people their beer.

DSBC: Why is that?

Kaplan: Because we can’t legally ship the beer directly.

DSBC: How would it work? They would have to come pick their monthly beer or whatever format directly from the taproom?

Kaplan: Right, so we would have people come to town visit for the day and fall in love with Santa Fe and Santa Fe products. And, they would want to join our beer club. So they did, and then we could never get them their product. So we cancelled it after a year or two.

DSBC: So we’re talking more your specialty products, not the canned beers, but the barrel-aged specialty beers. What’s currently the biggest obstacle for these particular products in the stores?

Kaplan: Because these products are so niche, so specialized, a lot of liquor stores are having trouble even selling them. They’re not able to get enough customers in to buy the case or two. Total Wine in Albuquerque, who’s a great customer, has great beer sales, is getting rid of their bomber aisles. They’re gone! Albuquerque, both locations, it’s already in process. So all those bombers are going to be gone. And, it’s understandable. The customer wants four packs. They want cans. We provide that as well. But, certain styles are hard to put into cans. Big ABV beers, beers that have tons of carbonation. Those great barrel-aged sours that we like to make, barrel-aged wild ales, they need to be in a cork and cage situation, so we understand that. We know we’re only going to get (a few sales) at Total Wine. But, a club allows us to do that more easily.

DSBC: Now, on the other side of the bill, it refers to out-of-state breweries and allowing them to come in for festivals and competition? We don’t have very many in-state competitions. But, the bill refers to “regional wine, cider, beer, or spirituous liquor tastings.” So, like a brew fest.

Kaplan: Yeah, like a beer festival. So you could get some really great out-of-state breweries that come to a festival, because they wouldn’t have to sign a long-term distribution. They could send beer just for the festival. The law currently allows wineries (that aren’t distributed here) to send a limited amount of wine just for a festival. We would just like to be able to do the same.

DSBC: We’re talking about festivals like Extreme Beer Fest, Beers (Without) Beards Festival, the Great American Beer Festival. Right?

Kaplan: Right! We could go get breweries from Europe, who aren’t even distributed here in the United States to just send us a couple of cases, just for the festival.

DSBC: So what’s the current status of the bill? Does it have a senate counterpart?

Kaplan: It does not have a senate counterpart.

DSBC: Is the bill currently in committee? Or, how many committees have seen it so far?

Kaplan: It’s come out of its first committee, and now I believe we’re in something like an economic commerce committee, not sure about the verbiage. The commerce and economic development committee was supposed to be heard today (last Friday), but for whatever reason, it didn’t get on the agenda and it’s going to get on next week.

DSBC: Why might someone have reason to oppose this bill?

Kaplan: Individuals or companies? Yeah, I don’t know why any individual would oppose this because this allows a brewery that you went to (ship) throughout the state, to ship beer directly to you on a limited basis. Only a couple of cases per month. It’s a very small amount. It would allow people to get access to beer that they maybe couldn’t get, because maybe they live in a rural part of the state where there isn’t a Susan’s or Kokoman or Jubilation, or one of these really fine craft beverage sellers, like Cliffs or whatever that carries these nicer products. Some of these other liquor stores, while they’re great, don’t have maybe all the specialty products of a brewery.

DSBC: And, perhaps breweries like Colfax Ale Cellar, or T or C, who make these great, big, beers in bombers, could reach new audiences all over the state.

Kaplan: As well as to the 15 states that also allow it. Those out-of-state breweries would also be allowed to ship direct back and forth.

For those that are worried about Budweiser or Coors-Miller coming in here and shipping direct to customers, I know there’s a fear going around about that. I asked, why aren’t they doing that now in the states that are legal? Even in their own states, where there’s very loose drinking laws, in Missouri, and Colorado, because of those breweries, they’re not doing it now. So my opinion is I don’t think that’s something to worry about. That seems like a fear tactic.

DSBC: How is direct-to-customer shipment different from current beer subscription services, like Tavour, where you order beers from an online catalogue, and is already delivering beer to New Mexican doorsteps?

Kaplan: That (e-commerce) shop is almost like a grocery store or a liquor store, because they’re collecting from a bunch of breweries and providing a club, right? So, it’s a similar concept, but honestly, you know, full disclosure, they might have more variety, possibly, but then you might not get the deep cuts, the very special beers from your favorite brewery. You know, we tried Tavour, sent out a few beers to them. Wasn’t really for us. We feel that we’d rather interact directly with our customers, or this allows us to save those really, really rare beers, and get them in the hands of the people who really want them.

DSBC: Do you know if you have much support for this from other breweries in the state?

Kaplan: We’re not really sure, because we don’t know how many breweries even know about it.

DSBC: With just under two weeks left of this legislative session, what would you like readers to know? Or do?

Kaplan: It’d be great if they could write their state legislators and tell them. And, whether they agree with the bill or not, honestly, my feeling is, the more people know about it, the better chance that it has, because it’s been studied by the Brewers Association and other places, right? Seventy-five percent of the general population wants direct-to-customer shipping. They want to be able to join a club or buy something directly from a brewery, and have it shipped right to their home.

DSBC: If this bill gets tabled for this session, will you try again next year, or in the future?

Kaplan: We’d like to, but we’re not made of money. So, you know, this cost us a good amount of money to do, and we’re hoping to see a return. It’s hard to say.

*****

As of Monday, the bill is still waiting to be heard in the House Commerce and Economic Development Committee. Thank you to Jeffrey Kaplan for sitting with me and telling us a little more about House Bill 343. I wish them all the luck, and some speedy legislation.

Cheers!

— Luke