Not Quite Ready To Roll Out the Barrel 

10 Barrel brewpub permit held up in red tape

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In January, Bend, Ore.-based 10 Barrel Brewing Company tapped plans for a downtown Boise satellite, originally slated for a summer opening, to become the first American craft brewery of its size to attempt an expansion into another state.

But 10 Barrel, which has already pushed its opening back once, has run into a major snag.

"We have a situation that's revolving around getting a license for our retail establishment," co-owner Garrett Wales told Boise Weekly.

10 Barrel wants to continue shipping its Bend-brewed beer into Idaho while operating a Boise brewpub, but Idaho law says that business model is a no-go.

"We're optimistically working toward a solution," said Wales.

The non-starter involves the part of Idaho State Code related to alcohol sellers, distributors and breweries. 10 Barrel, as an out-of-state company, currently holds a certificate of approval from Idaho's Alcohol Beverage Control, a license to bring beer into the state. However, 10 Barrel has also signed a lease for 803 W. Bannock St., for a small brewing operation with food, beer sales and tastings.

"The brewery wouldn't be the problem," said Idaho State Police Lt. Robert Clements, ABC's chief. "[The problem is] that they have the retail license with the brewery."

The retail license would allow sales of 10 Barrel products, such as a new black ale and IPA, on-site. But a Boise brewpub, according to Clements, could only sell Idaho-made beer.

Wales insists that wouldn't be enough for his business.

"The brewhouse that we have going in [Boise] isn't big enough to support the pub entirely," he said. "It's critical to be able to bring that beer across state lines."

But Clements explained that Idaho maintains what it calls "a three-tiered system where we keep the manufacturer, retailer and distributor separate."

The three-tiered system was designed to keep any tier from dominating the market: breweries and distilleries make alcohol, middlemen (wholesalers) distribute it and retailers sell it.

"That's been modified by the brewpub system," said local attorney Bill Roden, former head of the Idaho State Wholesalers and Distributors Association.

But the current system, as written, would still place 10 Barrel in all three tiers.

"There's nothing to prevent a brewery from being its own distributor," said Roden. "I think what's happening is it's getting mixed up in this brewpub situation."

The laws were implemented after Prohibition was repealed, said Clements.

"Breweries used to have exclusive control over the retailers and how they could control the product," he said.

The three-tiered system, Clements said, was designed to keep breweries from low-balling their prices through their own retailers.

"It's unlawful for any brewer to have any financial interest in any licensed retailer's business," said Clements. "[10 Barrel] can have a certificate of approval like they're doing and then bring in their product for a distributor or wholesaler, who would then sell it to the [Boise] establishment."

But while it hammers out the licensing issue, 10 Barrel has already signed a 15-year lease for its Bannock Street location. Ironically, the State of Idaho--as managed by the Idaho Department of Lands--will be the brewpub's landlord.

According to 10 Barrel's Facebook page, opening day has been set back several months.

"It really has to do with a technicality in the statute, something we've been working on diligently," said Wales.

The same statute created trouble for Fred Colby, co-founder and co-owner of Laughing Dog Brewing Company in Ponderay. During the 2012 legislative session, Colby wanted to partner with Post Falls brewer Selkirk Abbey, but was limited to having financial interest in one brewery.

"You could own two breweries, but neither one of them could have a tap room," said Colby. "It was against the law to have separate wholesale licenses and retail licenses on different breweries."

But the law's revision now allows Idaho microbrewers to have an interest in one other operation.

"I had a bit of opposition on this from the Idaho Distributors and Wholesalers," said Colby. "Rather than fight them, I worked with them, and said, 'Tell me how you would be OK with this change.'"

Colby said changing Idaho statute was difficult but he was guided by Dover Republican Rep. George Eskridge, Priest Lake Republican Rep. Eric Anderson and Sandpoint Republican Sen. Shawn Keough.

Wales said Oregon law has seen changes of its own in the past few years.

"In Oregon, we've continued to update the code to increase the access of craft brewers and promoting craft breweries, without stripping the necessity of the distributors." said Wales.

Though Clements said Idaho's three-tier system was devised to protect price points and public safety, he conceded that it's causing problems for some in the craft brewing community.

"As far as changing the laws, [Oregon] is probably four or 10 years ahead of Idaho," said Wales.

For now, 10 Barrel continues talking with ABC about a solution. Meanwhile, its license to sell beer at a retail location has yet to be approved.

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