To open a brewery in Beer City, USA, one must learn their way around the nuanced and sometimes complex legal landscape behind Michigan’s liquor industry.
The 21st Amendment, which abolished prohibition, left liquor regulations to the states, meaning there are 52 unique sets of liquor regulations in the United States, including Washington D.C. and Puerto Rico. Michigan’s own rules have come under fire in the past over concerns it has sometimes over-regulated its liquor industry.
Michigan acts as a control state, meaning it owns the state’s inventory of alcohol and uses distributors to store and deliver drinks, including local brews. Because of this, breweries are bound to strict rules about signage displays and gifts from distributors.
Making relationships with distributors, therefore, is a large part of becoming a successful brewery, as these connections can help you find ways to sell your product in more bars and restaurants.
Michigan utilizes two different licenses to regulate its breweries. Those that obtain microbrewery licenses are limited to producing 60,000 barrels of beer per year and can only serve customers products they produce themselves.
A brewpub license allows brewers to serve products other than what they produce themselves. They are prohibited from distributing their products, however, and may only sell at their own establishments.
Only those that produce less than 1,000 barrels of beer per year are allowed to self distribute, or sell their products directly to retailers without a distributor.
Acquiring property for a brewery in Michigan also comes with legal challenges, as the business must comply with local zoning requirements that mandate where business can be located. Should a brewery be located within 500 feet of a church or school, those entities may oppose the state’s decision to award a license, requiring a formal hearing process.
David Ringler, the self-described “director of happiness” at Cedar Springs Brewing Company, told The Grand Rapids Herald that many of these rules allow local breweries to remain competitive with larger national producers.
“A lot of it actually helps little guys,” he said. “As you can well imagine, Anheuser-Busch can come in and give glassware to a bar and run a draft system through a bar and could theoretically supply bartenders and they would shut out the little guys.”
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