Sacramento — California made craft beer cool. The industry, still mostly mom-and-pop and independently owned and operated, contributes almost $10 billion to the state’s economy from over 1,200 craft breweries that call the Golden State home. Craft brewers employ 66,000 Californians.
Today, these small independent business owners are dealing with a significant loophole in state law that threatens their livelihood. Senator Mike McGuire has introduced legislation to fix this loophole, providing a sense of certainty to the beer industry that the wine industry already enjoys.
SB 1198 is commonsense legislation that will ensure craft brewers can continue to ship beer directly to consumers by extending that same privilege to out-of-state breweries.
“California is home to the best craft breweries in America. These breweries are more than a novelty, they’re part of California’s identity,” said Senator McGuire. “The small business owners who operate these beloved institutions are our neighbors and are our community’s gathering grounds. SB 1198 will help protect the direct to consumer shipping that has allowed craft breweries to keep manufacturing the local beers we love, even in the depth of the most challenging times during the pandemic.”
Currently, California brewers can sell beer from their brewery either on tap, for takeaway, or shipped by mail. But according to constitutional law, a state cannot permit in-state producers to ship to consumers in state while denying that same right to non-California based brewers. SB 1198 will provide a permanent fix, shoring up California’s craft beer industry and protecting small brewers who rely on direct to consumer sales.
“This bill closes a legislative loophole to protect California‘s beloved craft brewers’ ability to ship customers their favorite beers,” said Senator McGuire. “It’s a win-win for over 1,000 family-owned businesses, and those who love California’s incredible brew.”
Without SB 1198, the privilege California brewers have to ship direct to consumers is vulnerable to constitutional challenges under the federal commerce clause.
“As small business owners, it means so much to share our craft beers with our customers—even when we’re apart. Direct to consumer shipping has been a lifeline for our business, especially during the pandemic. We’re so grateful to Senator McGuire for supporting hometown brewers and our local economy with this bill,” said Natalie Cilurzo, co-owner of Russian River Brewery in Santa Rosa, CA.
SB 1198 received unanimous support in the Senate Governmental Organization Committee (9-0 vote). It will next be heard in the Senate Appropriations Committee.