Michigan close to increasing self-distribution limit for craft breweries in state

Michigan is already a top craft beer state, and a new bill introduced by lawmakers in the Michigan House of Representatives could enact a small but much needed change in the production limitations faced by the state’s smallest breweries.

The big headline is this proposed bill would double the number of barrels a brewery is allowed to self-distribute, which currently sits at only 1,000 bbls, while also changing the calculation of that number.

Right now, a small brewery that exceeds that 1,000 bbl mark (total for both self-distribution and consumed on-site) needs to sign with a licensed distributor or just cut off sales. This bill, if passed, would provide much needed breathing room for a growing brewery without forcing huge changes to their business model — both by bumping the cap to 2,000 bbls and by no longer including beer consumed on site within that total.

Breweries in state have been pushing for movement on this front for awhile, initially asking for a way higher cap. But settling at this small step increase avoided the usual pushback from distributors and makes it much more likely to pass. From Crain’s Detroit:

The bill faced opposition from some distributors and brewers in the state initially, but most backed down after realizing the new rules would likely have a negligible impact on their business, Newman-Bale said. Under the new law, brewers would still be required to sign with a distributor once the 2,000-barrel quota is tapped.

“Distributors don’t want to deal with a hundred different brands anyway,” he said. “They’d much rather move 10 times more with one brand.”