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Honing Their Craft

Honing Their Craft

Through time, craftsman (and women) from all across the globe have united to form guilds and other trade groups to help advance their various causes. Craft beer is no exception. With craft beer growing by leaps and bounds, production breweries, brewpubs, and contract breweries from around the country have begun to form and join brewer’s guilds. These organizations have been charged with helping to advance the needs of the craft brewing community within their respective states. And collectively, to help advance issues relating to craft beer throughout the United States.

The Philadelphia region is no exception. With the craft segment continuing to cut into the market share of the macro breweries and imports, in order to continue the growth of craft, local breweries face many obstacles within their markets.

First, a separated three-tiered system (supplier, wholesaler, and retailer) is protected by a powerful lobby. This keeps breweries in certain states from not only selling directly to retailers, but in some cases, prohibits breweries from having tasting rooms and selling pints directly to consumers. In addition, distribution rights in certain states (like Pennsylvania) cannot be returned to the brewery without the wholesalers consent. This locks brands into potentially life-long relationships with their wholesalers, at times, to the determent of the brand. And also, excise taxes and other financial costs incurred by small and medium sized breweries vary from state to state, and have a significant impact and can hinder expansion.

Garden State Brewers Guild

The Garden State Brewers Guild (GSBG) is comprised of eleven members, from all across the state of New Jersey. The guild was founded in the mid-1990s during the first wave of the craft beer explosion. It counts among its member’s local favorites Flying Fish, Iron Hill, River Horse, Triumph, and many others. Its leader is Mark Edelson, the Director of Brewing Operations for Iron Hill Brewing Company. Iron Hill has been a perennial award winner at the World Beer Cup and the Great American Beer Festival, and was recently awarded as the World’s Top Brewpub Chain.

The mission statement of the Garden State Brewers Guild is found on their website and states; “The Garden State Craft Brewers Guild is an association of the restricted and limited license holders in New Jersey. Our goal is to promote the craft brewing industry in New Jersey by means of education, promotion of special events and other social, civic and economic initiative.”

Mark also elaborated on the GSBG’s mission. “We are in the business of promoting NJ craft beer. We are ranked 11th in the country in population but 32nd in Craft Beer Production. To us, that doesn’t make sense.” In addition to increasing the amount of craft beer produced in New Jersey, legislation is also a top priority for the GSBG. “We are interested in promoting NJ craft beer. However, this is done through the guild by promoting and protecting craft beer legislatively.” “However,” as Mark notes, “promotion and protection cost money, and for most individual breweries, the cost is too great. That’s why we have united as a guild.”

This unity is noticeable online as well. On the front page of the GSBG’s website, there is a call for locals to contact the governor’s office to ask for support of NJ house bill A-1277/S-641, which will give New Jersey craft brewers more flexibility in how they promote and sell their beer.

“In New Jersey we are severely limited in how and where our beer is sold,” says Mark. “For example, you are only allowed to have two brewpubs under the same license in NJ, whereas that is not a restriction for Iron Hill in PA.” He also goes on to explain how bill A-1277/S-641 will change how beer is sold and promoted in NJ. “If you’re a production brewery, you are not allowed to have a tasting room or sell beer on-site. Also, in New Jersey, you are not allowed to self-distribute. This forces you to partake in the three-tiered system.” It is the goal of the GSBG to change the current system to give New Jersey breweries the flexibility to self-distribute as well as have tasting rooms, which are a significant source of revenue for some companies.

Delaware Brewers Guild

The Delaware Brewers Guild (DGB) was established in late 2011, and formalized in its current form in early 2012. The guild counts every licensed brewery in the state either as a member or planned member by the end of this year. The President of the DBG is Jesse Prall, who is the director of brewing operations for Dogfish Head Craft Brewery.

“We are a very young guild compared to our neighbors,” says Jesse. “However, our goal is to promote ALL craft beer in Delaware. A lot of people when they think of Delaware breweries think of Dogfish Head. But we have some really talented people, making great beer in our state.”

Like the other guilds, Jesse’s focus is on educating people about each of the breweries who make beer in Delaware. “We also have wonderful wineries too. We’re working on creating a brewery and winery trail for tourists,” he says. “We want people to be able to experience all that Delaware has to offer.

When asked about the significant issues the guild supports, he mentioned two; the reduction in state excise tax, and self-distribution/ tasting room sales. “In Delaware, unlike some other states, breweries are not allowed to sell direct and must assign distribution rights to a wholesaler,” Jesse stated. “This regulation has a great impact on smaller breweries, which in other territories, use that extra margin to help make improvements or upgrades. Also, there are limits in Delaware on the amount of beer retail sales you have on your premises. This is something that the guild is looking to change as well.” Jesse went on to explain how the excise tax issue really affects all the breweries within the state. “The excise tax has an impact on breweries of all sizes, not just Dogfish Head. We are pushing for a reduction in excise tax for small and mid-sized breweries. This would help companies like ours expand, by adding additional fomenters, for example.” The guild hopes to increase their legislative footprint moving forward as they formalize their organization, and bring all of their prospective members on-board.

Pennsylvania Microbrewers Guild aka Brewers of Pennsylvania

The Pennsylvania Microbrewers Guild (PABG) was founded in 1996 and has grown into Brewers of Pennsylvania (BOP), which is the self-governing body in this state for breweries such as The Boston Beer Company, Yuengling, Victory, and many others. Its President is Bill Covaleski, the cofounder of Downingtown-based, Victory Brewing Company. The guild counts thirty-six current members from across the state, of all types and sizes. “The guild started in the mid-90s. We credit the teams at Stoudt’s and Weyerbacher for really being instrumental in the guilds formation then,” said Bill. “Today, we have members from the likes of Yuengling, to contract breweries.”

Like many of the other guilds, the BOP is focused on protecting its members. “Guilds are a form of insurance,” says Bill. “We protect the mutual interests of the brewing community. Also, we provide a forum for multiple companies to come together and protect each other from opposition. Our goals are to protect our products, and to protect our employees.”

The BOP was mostly dysfunctional from 2009-2010, until major legislation forced the hand of the Pennsylvania brewing community. “I got a call from the CEO of Yuengling one day, asking me how I felt about a piece of legislation which was set to affect all of us. We then rallied together, and the guild became what it is today.” Bill went on to explain how the guild embraces all professional brewers in the state. “Our goal is to include everyone who brews beer professionally within the state. We provide legal advice on issues which affect our business, and act as a support group for one another.”

BOP states that its two main objectives are education and membership. “Our educational mission extends beyond the general public. We have to educate our legislators on the economic impact that the PA brewing community has on the state,” explained Bill. “We are in the process of commissioning an economic impact study within the commonwealth. The guild plans to use that study to show the impact that the brewing industry has on job creation, as well as other positive economic benefits.” The guild then hopes to use that information when proposing, supporting, or opposing legislation.

In addition, membership is also a goal of the BOP. “We have companies of all sizes within our guild, including contract breweries, brewpub’s, and even  nano-breweries. Our goal is increase membership to include companies within hopefully each congressional district.” Like the other guilds, legislative action is a priority. While the BOP has not proposed any legislation of their own as of yet, they have been actively involved in legislative matters which affect the members of their guild. One of the main issues which may affect members of the guild is the current privatization debate which is going on in Harrisburg. Various forms of this law would allow for the privatization of state-owned liquor licenses and would enable new license holders to sell various packages, including six-packs and wine, which are currently not allowed under Pennsylvania law.

“We are actively listening to our customers, retail and consumer, at the moment,” said Bill, “In order to find out exactly what THEY want.” While it has been reported that package reform is in the best interest of the consumer, the guild understands that blanket package reform can also hurt their customers. “People with a D-License (your local beer distributor where you can only buy a case), could be negatively affected. Therefore, we want legislation which enhances the value of the D-License, while providing customers greater choice and access to beer.”

“We want to move to a more consumer friendly model, and that can be done by creating legislation which also enhances the value of the D-license. We at the BOP suppose that if D-licenses could gain the opportunity to sell more package sizes, this might enhance the value of the license, allowing progressive retailers to thrive and weak retailers to choose to sell their licenses,” hopefully to give the customer better choice and access to products.

The presence and strength of the brewers guilds help the craft brewing industry continue to grow and prosper. Each guild is committed to listening to their customers and making the necessary moves in their communities and at the legislative level to promoting local and fresh, craft beer. Each guild has a presence online, and encourages community involvement in the issues which affect the craft beer community. More information can be found through searching online for the brewer’s guild in your respective state.

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