July 6, 2015
Let a man walk ten miles steadily on a hot summer’s day along a dusty English road, and he will soon discover why beer was invented. — G.K. Chesterton
Craft Beer In Tennessee: A Growing Industry
Among the beer-related puns in recent adult beverage industry articles (witness: “Tennessee’s Craft Beer Industry Rises to a Head”, “A cure for what ales the beer industry”, and the like), I recently uncovered some interesting statistics regarding Tennessee’s craft beer industry. For example, while Tennessee ranks 41st among all 50 states for breweries per capita, it ranks 24th in the nation for gross economic impact. Tennessee also ranks 29th in the nation for barrels of craft beer production, annually.
While Tennessee’s craft beer industry’s economic impact per capita lags behind nearly every other state in the U.S., it is a growing sector of the state’s economy. In fact, as of 2013, there were 11 craft breweries in the Nashville area, alone! (TNLedger.com) Whether you have an interest in starting a microbrewery or other craft beer producing business, you’re going to have to comply with some laws and regulations. Below, you will find a few things you need to know about the legal side of a craft beer producing business.
Licenses and Permits
“A Brewery license allows a facility to manufacture or distill alcoholic spirituous beverages with an alcohol content of over five percent (5%) by weight and to sell those beverages for consumption off premise.” (Tennessee Alcoholic Beverage Commission) To apply for your Brewery license, in Tennessee, you first must obtain a Federal Basic Permit from the Alcohol and Tobacco Tax and Trade Bureau (ttb.gov).
You’ll also need to ensure that the location where you plan to operate your brewery meets the requirements of Tennessee Code Annotated Section 57-2-103, which establishes the authority of local legislative bodies, such as municipality or county governments, to determine whether intoxicating beverages may be produced in a given place. To determine where you may be permitted to operate a brewery, you should contact the local beer board (if there is one) in the county in which you plan to operate the brewery. There is a list of Tennessee beer boards on the Tennessee Alcoholic Beverage Commission website.
Finally, before any representative of your brewery may solicit orders from any wholesaler–something you are almost certainly going to want to do–at least one representative of your brewery must have a Distiller’s Representative Permit from the Tennessee Alcoholic Beverage Commission.
License and Permit Fees
At a minimum, you’re going to have to pay:
- $300.00 — Application Fee for Non-Liquor-By-the-Drink Brewer License;
- $1,000.00 — Brewer License Fee for Non-Liquor-By-the-Drink Brewer License; and
- $50.00 — Distillery Representative (1 Year) Permit.
Other fees may be required, and the Distillery Representative Permit is a per-person-per-year cost. Also, the Brewer License Fee is an annual fee. The Application Fee for the Non-Liquor-By-the-Drink Brewer License is only charged once (per application filed), but is charged whether or not an application is approved.
So, your minimum State license and permit costs are $1,350.00. Plus, you will have to pay any taxes and fees charged by the federal Alcohol and Tobacco Tax and Trade Bureau or your local municipality and / or county.
Responsible Vendor Training
A responsible beer vendor is a vendor that has received certification from the commission to sell beer for off-premise consumption that has met all the statutory and regulatory requirements set forth by the commission to encourage vendors to be prudent in their selling practices of beer, and to restrict or reduce the sanctions that may be imposed in the administrative proceedings by the local beer boards against the vendors who voluntarily comply. Certification is valid for one (1) year and is renewable annually. (Tennessee Alcoholic Beverage Commission)
To be a responsible beer vendor, “you must be a person, corporation or entity that has been issued a permit to sell beer for off-premise consumption by a TN beer board.” (Tennessee Alcoholic Beverage Commission) “In order to become a responsible vendor, you must take the appropriate class,” (i.e., you must participate in a “Responsible Vendor Program”). Id.
“A Responsible Vendor Program is an alcohol awareness training program that teaches the mandatory curriculum set forth by the
Attend to Your Ongoing Business-Legal Needs
Breweries, like any business, need General Counsel, because they have serious, ongoing business-related legal needs. Your General Counsel should participate in strategic decision-making, counsel your business’s leadership as decisions are made, and ensure your business can navigate of the intricacies of the laws and regulations with which your business must comply. No one can know everything or function effectively in every role. Having General Counsel on your team is essential to making the right decision the first time and avoiding expensive legal problems.
Executive Legal Professionals makes General Counsel affordable with our scalable, customizable Signet™ General Counsel legal service plans. We also provide a variety of Business Formation legal service plans to meet the needs of entrepreneurs and start-ups. Whether you need business formation or General Counsel legal services, Executive Legal Professionals is here to help without breaking the bank. Contact us through our website, today, and we can get started right away. We look forward to helping you bring your own flavor to the Tennessee Craft Beer industry.
This article, its contents, and its author are not endorsed by the State of Tennessee. The Seal of the State of Tennessee has been used with respect to this article for purely aesthetic purposes, and is not intended to create any affiliation with the State of Tennessee or any of its offices or departments, including but not limited to the Tennessee Alcoholic Beverage Commission.
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