Surly Brewing Co. has overcome a major hurdle in its plan to construct a new, spectacular brewery somewhere in the Twin Cities. Surly’s proposed $20 million ‘Destination Brewery’ will have a roof-deck beer garden, restaurant, bar, and event center. Under previous law, it was not legally feasible for Surly to own such a facility in the State of Minnesota.
The traditional model of governmental liquor regulation is the Three-Tier System for supply and distribution. It is a strict separation between the manufacturers who make spirits, beer, and wine; the wholesalers who distribute them across and within the state to retailers; and the retailers who sell the products to the consuming public.
Liquor regulation is a necessary government operation because a lack of control has caused public problems. Liquor is also regulated as an industry, both to compel the industry to meet the public goals of the state and to ensure fair competition.
Minnesota has a variation of the Three-Tier System. City governments issue liquor licenses to independent businesses. This means that manufacturers, liquor stores, and bars exist solely at the discretion of the municipality.
Surly’s founder, Omar Ansari, and beer enthusiasts across the state campaigned Minnesota lawmakers for less stringent business regulations on local breweries in order to make the Destination Brewery dream into a reality.
On May 25, MN Gov. Mark Dayton signed into law the State Legislature’s 2011 Omnibus Liquor bill. The legislation, popularly called the ‘Surly Bill‘, includes a revolutionary provision for a new class of liquor license. Local governments in Minnesota are now allowed to issue a ‘Brewer Taproom License‘, which authorizes malt liquor produced by the brewer, to be sold for consumption on the premises at one brewery location.
The Brewer Taproom License does not eradicate the Three-Tier System in Minnesota. To qualify, Minnesota brewers (or any person having an economic interest or exercises control over the brewer) still cannot produce more than 250,000 barrels of malt liquor annually. Once the Destination Brewery is complete, Surly will be over this limit. The company will contract with outside distributing companies to comply with state regulations.
Ansari is also the newly elected President of the MN Craft Brewers’ Guild. Minnesota has a long, diverse history in the brewing industry. More craft breweries producing fresh, local beer have been popping up across the state. The Guild argues that best beer is the freshest beer you can buy, and locally produced beer will always be freshest. They strive to educate the public on the pleasure of consuming beer—in moderation!—and to ensure that our rich brewing tradition will be carried on for future generations to enjoy.
Surly is a small business that hopes to make its new brewery a Destination for craft-beer fans in Minnesota and across the country. Beer tourism is becoming more and more popular, which helps other local businesses, hotels, bars, restaurants, and transportation. Visiting and dining at a brewery is also a part of beer culture in many parts of the world.
For Surly, the Destination Brewery is about creating jobs, increasing state tax revenue, and stimulating our local economy. Once the location is decided, building the facility could create as many as 85 construction jobs. Surly also estimates that the new brewery will add 150 jobs permanently in Minnesota.
The opposition to the new Brewer Taproom License, including resistance from the Minnesota Licensed Beverage Association, suggested that Surly build its Destination Brewery in another state, where the laws are more accommodating. However, sending business away because of an outdated establishment, only serves to further cripple Minnesota’s economy.
“While it is true that we could get this brewery built in many other states, we want to build it in Minnesota. We are a Minnesota company and would like to keep it that way. Some of the country’s hottest craft beer brands have breweries in their states similar to the one we are proposing. Our destination brewery will benefit Minnesota in many ways,” Ansari says.
Ansari had been homebrewing since 1994 and had an apprenticeship at the New Holland Brewing Co. in Michigan. The growing enthusiast explored the country, seeking out the best regional microbrews. His all-grain brewing quickly overwhelmed his home garage, and soon had so much equipment he moved it to the family business, an industrial space they used to manufacture adhesives.
At the Spring 2004 Craft Brewers Conference in San Diego, Ansari met Surly’s current Head Brewer, Todd Haug. At the time, Haug worked at Downtown Minneapolis’ Rock Bottom Brewery. The pair apparently attended the same junior high school but had not seen each other since. Now in its fifth year of production, Surly is still only available in the Minneapolis and St. Paul metropolitan area.
Thanks to the collective action of the Surly Brewing Co. and its fans, Minnesota breweries now have more innovative freedom in how to sell beer and in how to shape our economic future.