South Dakota Senate raises cap on craft brewery production, allows self-distribution

The South Dakota Senate passed SB 173, which we originally wrote about here, that will raise the limits on craft beer production in-state from 5,000 bbls (I mean, wtf) to 30,000 bbls (better, I guess) and allow for some self-distribution (up to 1,500 bbls). Owners will also be able to open up to five additional locations.

“Microbreweries are growing rapidly across the nation, South Dakota included,” said Americans for Prosperity-South Dakota (AFP-SD) Deputy State Director Andrew Curley. “This bill is a win for these small businesses and entrepreneurs because it will allow them to them to brew more beer, reach more customers and grow their businesses. We thank the senators for passing this bill, and we strongly urge their House colleagues to do the same.”

This is definitely a win for craft breweries in South Dakota. Sure, CBB believes that these are still far too limiting for no real reason other than the low starting point (5,000 bbls) primed a low improvement, but this bill is way better than the “compromise” bill the state’s wholesalers were pushing that “would also increase the barrelage cap, but only to 12,000, and not allow for any self-distribution rights, but it would maintain taproom sales.”

Derek Fernholz, co-founder of Fernson Brewing Co., told the Associated Press that they plan to exceed that 5,000 bbls mark for the first time, so this is a huge sigh of relief — and might have inspired another avenue for growth:

“That allows us to dream and think a little bit more about opportunities that just weren’t there before this bill,” said Fernholz, thinking aloud about the potential of opening a satellite brewery in the Black Hills.

“We have a very spread out state here, and it’d be really nice to be able to feel like the local hometown beer, you know, other places than just Sioux Falls.”