Page 9 - Beverage MasterAug Sept 2020_Rev
P. 9

Legal & Marketing

               protection.  In some cases, states allowed brewer-     The manufacturers who have fared the best, so
               ies to transfer fermented wort to distilleries for dis-  far, are the ones who have done two things: 1)
               tillation and mixing with other ingredients and then  applied early for federal, state, and local grant and
               to take the product back to the brewery for bottling  loan opportunities, and 2) found creative ways to
               and distribution.  One word of caution, however; at   pivot their business to maximize their opportuni-
               least one brewery in Hawaii received a citation for   ties under restricted conditions.  Being based in
               “inducement,” because they were giving a free bot-   Maryland, I would be remiss if I didn’t give a shout
               tle of sanitizer to anyone who purchased their beer.  out here to True Respite Brewing Company.  Based
                                                                    in Rockville, Maryland, they were the creators of
                 When taprooms were ordered closed in Ohio, the     the craft beverage delivery platform, Biermi, which
               Department of Commerce recognized that some          is now being used in at least 29 states.  This type of
               small breweries did not have bottling or canning     innovative thinking both in the private sector and
               capabilities and would struggle more than those      in state and local governments will be critical as
               who were able to package their products and sell     we navigate the COVID-19 emergency.  If worsen-
               for carryout or delivery.  So, the department cre-   ing conditions require tighter restrictions in some
               ated a procedure that would allow a manufacturer     states, hopefully the information presented above
               to have another manufacturer bottle or can their     will be useful in discussions with licensing commis-
               products for them.  Ordinarily this would be a viola-  sions and legislators as ways they can help accom-
               tion of Ohio law.                                    modate manufacturers.

                 As various states begin their tiered reopening       Lastly, with the constantly shifting regulatory
               plans, many are still either prohibiting indoor din-  structure surrounding this industry, it is essential
               ing/drinking or only allowing a limited percentage   that licensees stay in contact with their insurance
               of normal seating capacity.  To further accom-       companies and their attorneys.  A state may change
               modate manufacturers, several states, includ-        the rules to allow a manufacturer to deliver alcohol
               ing: Alaska, Arkansas, New Jersey, Ohio, Oregon,     to consumers’ homes or to serve its products in a
               Pennsylvania, and Virginia, have been much more      parking lot, but that does not necessarily mean that
               lenient about allowing outdoor seating areas to      the manufacturer’s insurance policy will cover those
               make up for lost capacity inside.  In many cases,    activities.  Further, the devil is always in the details.
               states have allowed manufacturers to rope off sec-   In each of the states mentioned above, there are
               tions of sidewalks, parking lots, and even closed    conditions and terms that must be satisfied in order
               portions of streets to enable outdoor seating.  New   to engage in the permitted activities.  Always con-
               Jersey has even gone a step further and allowed      sult with a knowledgeable attorney before engaging
               breweries to occupy outdoor spaces that are not      in a newly allowed process.
               directly attached to the brewery, such as nearby
               parks.                                                 Brian Kaider is a principal of KaiderLaw, a law
                                                                    firm with extensive experience in the craft beverage
                 Finally, most states have been very flexible with   industry. He has represented clients from the small-
               licensing renewals and tax filings, extending dead-  est of start-up breweries to Fortune 500 corpora-
               lines and fast-tracking application processing.      tions in the navigation of regulatory requirements,
                                                                    drafting and negotiating contracts, prosecuting
                                Final Thoughts                      trademark and patent applications, and complex
                                                                    commercial litigation.
                 No one knows how much longer this crisis is going
               to last.  As the number of new coronavirus cases
               falls in one state, it rises in another and the experts
               seem to agree that we are still in the midst of the
               first wave of this virus with a second likely to hit
               during flu season.  It is reasonable to expect that
               we will see state and local governments react to
               changing circumstances with an ebb and flow of
               restrictions on people congregating.

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