Achieving parity among farm beverage producers in the Empire State

The phrase – “a rising tide lifts all boats” – can accurately describe New York’s farm-based craft beverage industry. What is good policy for a cidery is good for a brewery, a distillery, and a winery – and vice versa and everything in-between.

Support of the craft beverage industry is truly one of the few, across-the-board “feel good” issues that elected officials and lawmakers can agree upon, regardless of political affiliation, where they are from, or societal disposition. And particularly, supporting the farm-based craft beverage production industry. Upon entering office in 2011, Governor Andrew Cuomo has been one of the nation’s most effective champions of craft beverages – organizing summits among beer, wine, cider, and spirits producers and industry leaders, reforming guidelines relating to brand label registration and ancillary fees, and making it easier for a producer to set up shop in New York. This is coupled by a state legislature that recognizes the importance of the industry as it relates to job creation, economic development, and tourism.

A farm-based producer falls under what is defined as a Class D license holder (whereas Class A license holders refer to major, macro-beverage producers). The benefit of the Class D license, whether they are a cidery, brewery, distillery, or winery is their ability to transcend the “three-tier” system (referring to separate, independent ownership of those producing the beverages, those distributing the beverages, and those selling those beverages for retail).

A farm producer can self-distribute, sell on premise at their respective tasting room, and of course, produce.

These licenses, originating with the farm winery law of 1976 and followed up for distilleries in 2007, breweries in 2012, and cideries in 2013, also encourage using local farmers as they are mandated by state law to use a certain percentage of a New York State-sourced agricultural product (e.g. apples, grain, corn, grapes). Additionally, there are production caps that limit how much product they can make.

However, for as much progress has taken place in updating and reforming New York’s Prohibition-era laden Alcohol Beverage Control (ABC) laws, there is still work to do. For example: in 2016, the state legislature passed a set of legislation (both signed by Governor Cuomo) that allows for farm cideries, wineries, and breweries to serve New York-made farm beer, wine, cider, and spirits by the glass.

Distilleries were left out of the mix at the time, unfortunately (in January, State Senator George Amedore and Assemblymember Patricia A. Fahy, who sponsored the bill that allowed cideries to have this privilege, announced legislation to address this).  This is not the first time distilleries were left out – in 2015, another law (also sponsored by Amedore and Fahy) had to address selling non-manufactured items for retail at distilleries (read: t-shirts, glassware, hats, etc.), which the other three were allowed to do.

Another area of inconsistency are the number of branch offices for each category. A branch office is a location that is essentially an extension of the licensed premises of the original production facility. Farm cideries, wineries, and breweries can operate five branch offices, whereas farm distilleries can only open one. For a farm distillery, this limits their potential for growth as they would be restricted in terms of where they could open a second location. For example, a farm distillery located in Troy in upstate Rensselaer county could open a branch office in Lackawanna, outside of Buffalo. But what if they wanted to open a location in New York City, Long Island, the Southern Tier, or the North Country? Therein lies the challenge and the inequity.

In each instance, it is parity and the equality among beverage categories that is used as justification – a level-playing ground for each farm producer, no matter if you produce beer, wine, cider, or spirits. For this industry, what is right for some is truly right for all.

 

About the author

Joe Bonilla is the managing partner, co-founder, and senior media director for Relentless Awareness.

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