Month: April 2018

Extension Helps N.Y. Brewers, Growers Raise a Pint

Cyndi Leave a comment

By: R.J. Anderson, Courtesy of the Cornell Chronicle

The essential ingredients of a pint of locally produced New York state craft beer are quite simple: hops, barley, yeast and water. Much more complex, however, is how the supply chain of those elements comes together to create beverages that adhere to New York’s escalating farm brewery regulations.

It’s a recipe further challenged by the relative infancy of the farm brewery industry and its explosive growth. Since the introduction of the state’s farm brewery license in 2013, which offered tax benefits and relaxed regulations for breweries using New York-grown ingredients, there are now more than 160 farm breweries online. And while the path to startup has been made easier, there exists significant challenges for farm brewers looking to procure New York-produced ingredients. In addition to lending distinctly local flavors to their beverages, Empire State hops and barley satisfy the state’s mandate that farm-brewed beers contain at least 20 percent New York-grown ingredients – a requirement that jumps to 60 percent in 2019 and 90 percent in 2024.

Helping the industry link and grow a more inclusive supply chain are Cornell Cooperative Extension (CCE) specialists. Examples of CCE efforts were recently on display at a pair of Farm-to-Pint tours that brought together more than 70 New York hop and barley producers, maltsters, brewers and state officials with Cornell and industry researchers.

By design and per New York state legislation, our craft beer supply chain is a relatively short one,” said event organizer Cheryl Thayer, an agricultural economic development specialist with CCE’s Harvest New York regional agriculture team. “Because of those limitations, it’s imperative that the supply chain stakeholders not only know one another, but understand the intricacies involved in each node of the supply chain.

“We thought a perfect mechanism for this was to bring those stakeholders together and follow the life cycle of a pint of New York state beer,” she added.

Funded by the New York Farm Viability Institute, the bus tours – one held north of Albany in Washington County June 29, the other near Rochester Aug. 4 – each began with a stop at a local hop yard and malting barley field. In addition to hands-on, real-world conversations with the growers, those stops included updates from Cornell College of Agriculture and Life Sciences scientists Gary Bergstrom and David Benscher, who joined CCE crops specialist Mike Stanyard and CCE hops specialist Steve Miller for research-based discussions about ongoing trials and trends.

Each tour also included a visit to a craft malt house. “Malt house owners are a vital middle link in the craft beer production chain,” said Thayer. “But with the recent reintroduction of malting-grade barley to New York agriculture, they are also the newest additions to the supply chain. Because of that, attendees were very interested in seeing a working malt house in action and spent quite a bit of time picking the maltsters’ brains about their trade and preferences when working with growers and brewers.

Wrapping up each event was a tasting at a farm brewery where the groups networked while sampling beers featuring hops and barley from earlier tour stops.

“The attendees were very appreciative of having a forum where they could absorb new information while making those important new connections,” Thayer said. “The exchange of information and candid discussion about challenges and opportunities currently present in the supply chain was probably the most valuable takeaway for them.

“Along with a lot of people across the state, we at CCE think the craft beer industry has the potential to cultivate emerging market opportunities for growers while simultaneously supporting good agricultural economic development initiatives,” Thayer continued.

“That’s why we’re doing all we can to support its continued growth and success. But for those things to happen, the industry needs to develop a strong sense of community and understand the role of each link in the supply chain – and we’ll do everything we can to help make that happen.”

R.J. Anderson is a writer/communications specialist

with Cornell Cooperative Extension.

Petition for a Writ Far-fetched? Nope!

Cyndi Leave a comment

By: Dan Minutillo, APC

If a state regulatory agency with jurisdiction over the craft brew industry makes a decision that appears to be arbitrary and capricious, having a direct effect on your business, then, you have the right to petition a court for relief using a Writ of Administrative Mandamus. An unnecessarily fancy phrase meaning that a court of law reviews the administrative decision and decides if, under applicable law, the decision is not rational. Most times a writ is requested by an association or group of companies that are affected by the agency decision so that a positive result will affect many companies in the association or group.

STATE ADMINISTRATIVE AGENCIES

State administrative agencies with jurisdiction over the craft brew industry create policies that can affect your business. I recently wrote in this magazine about a Tennessee agency which passed a regulation indicating that only people domiciled in Tennessee for a certain time could get a permit to sell alcoholic beverages in the State.

For the purpose of this article, let’s say that an administrative agency in California, like the California Department of Alcohol Beverage Control (ABC), passed a regulation indicating domicile restrictions to get a permit to sell craft beer om the State; that a company had to be in business in the State for ten (10) years and then that company could sell alcoholic beverages. This regulation is then challenged by you as arbitrary and capricious at the agency level, and the agency denies your challenge.  You argue that this domicile restriction is illogical, with no purpose other than to discriminate against out of state craft brew companies. You lose at the agency level, that is, the ABC reviews your challenge and denies it.

THE APPEAL; THE WRIT

That administrative decision (the denial of your challenge) by the ABC can be appealed to a court by “writ”, and you, the appellant, will win and ensure that this decision and underlying regulation is stricken if you can prove that the decision and underlying regulation is arbitrary, that is, without a rational basis.

So, there are a few criteria to get you into court to have the ABC decision (the denial of your challenge) reviewed and to win on your writ:

  1. That the decision/regulation was made by an “administrative agency” of a state (or of the Federal government), like the California ABC;
  2. Normally, that you have exhausted your administrative remedies. This means that if there is a method of appeal at the ABC, then you must first make that appeal and follow all other procedural rules regarding an appeal at the ABC before you bring a writ.
  3. That all of your ABC remedies have been exhausted and denied, and this denial must usually be in writing by the ABC (evidentiary issue).
  4. That you have standing to be heard by a court. Standing means that you are a “party in interest” which usually means that you, that is, your business has been affected by this ABC regulation/decision. You have standing if you will be or have been damaged by the regulation or decision. For example, if I teach math to high school students in a local school, I would not have standing to bring a writ in this circumstance because the ABC regulation/decision does not affect me. But, if you make or sell craft beverages, this regulation/decision does affect you, so, you have standing to bring the writ.
  5. That any applicable statute of limitation has not run. Most actions brought in a court of law must be brought to the court before a certain time period, that is the statute of limitations. Various statutes limit the time in which you can bring certain actions. Some statutes are as short as ninety (90) days from the time of the ABC denial of your challenge.
  6. That you can prove that the decision/regulation was made by the California ABC in an arbitrary and capricious manner, that is, there is no basis in fact or law to support the decision (the denial). It was whimsical and therefore an abuse of discretion by the ABC. The case law language is that a court on a writ will not disturb the ABC’s decision absent an arbitrary, capricious, or patently abusive exercise of discretion by the ABC.

THE STANDARD

Some courts call this a “rationality review”. Is the regulation/decision rational, that is, justified in fact and in law. No matter how you look at this, the key here is that the ABC did something that has damaged you and, after exhausting your administrative remedies, you are able to prove that the ABC’s decision is arbitrary and capricious—and you win.

THE REMEDY

I will discuss remedies, that is, what decision a court could make on a writ and how it could affect you, in a later article for this magazine.

Dan Minutillo has lectured to the World Trade Association, has taught law for UCLA, Santa Clara University Law School and their MBA program, and has lectured to the NPMA at Stanford University. Dan has lectured to various National and regional attorney associations about Government contract and international law matters. Dan has provided input to the US Government regarding the structure of regulations. He has been interviewed by reporters for the Washington Post and other newspapers.