Proposal criticized by Nebraska’s craft brewers defeated

(AP Photo/Robert F. Bukaty, File)

LINCOLN, Neb. (AP) — Nebraska lawmakers on Wednesday defeated a measure backed by beer distributors but opposed by the state’s craft breweries amid concerns that it would hurt a flourishing statewide industry.

The proposal would have clarified that beer produced by microbreweries must go to a distributor’s warehouse before it gets shipped to liquor stores, groceries and other outlets. Restaurants and bars owned by the breweries would be exempt.

Craft brewers say it would have stifled their business. For small, rural breweries that are far from a warehouse, the requirement could have added hundreds of miles to each shipment and increased their costs, said Sen. Carol Blood of Bellevue.

The bill “is a job killer that will hinder the expansion of the craft brewers industry,” Blood said.

Sen. Tom Brewer of Gordon said industry plays a growing role in his geographically large and rural western Nebraska district. The breweries help promote tourism in towns that are struggling to survive, he said.

Supporters cast the measure as a matter of fairness. Larger beer makers are required to sell their product through a three-tiered system consisting of brewers, distributors and retailers. The system was set up after Prohibition to make it more difficult for big brewers to manipulate the market and to prevent tax fraud by requiring each business to have an independent set of books.

“We can’t let the small breweries self-distribute,” said Sen. Tyson Larson of O’Neill, the bill’s sponsor. “If we let them do it, we would have to let the big distributors do it.”

Lawmakers voted 30-4 to strip the provision out of a larger alcohol bill.

Across the nation, states have passed legislation intended to promote the industry. In 2015, Arizona passed a law increasing the production cap for microbreweries after the state’s largest neared its limit. In Ohio, a law that went into effect last year eliminates the caps on the alcohol content in beers after craft brewers pushed for the change.

Nebraska has taken steps as well, approving legislation that would allow more restaurants and bars to sell growlers — refillable large bottles — of craft beers to customers for off-site consumption.

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