Page 9 - Beverage MasterAug Sept 2020_Rev

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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