Business News

Local brewers relieved as ATC softens new, stricter regs

by Walter Pierce

The state office of Alcohol & Tobacco Control announced new regulations on on-site sales and events that, according to one local craft brewer, would have put several independent Louisiana brewies out of business.

Photo by Robin May

Sighs of relief are bubbling to the surface at craft breweries across the state after the commissioner of the office of Alcohol & Tobacco Control Monday backed off stricter new regulations governing Louisiana’s burgeoning microbrewery industry. Dorsey Knott, one of three Knott brothers who founded and operate the seven-year-old Bayou Teche Brewing Co. in Arnaudville, says he was near his phone all morning Monday getting text-message updates from representatives of the Louisiana Craft Brewers Guild, who had an emergency meeting with ATC Commissioner Juana Marine-Lombard in New Orleans. The two sides, Knott says, achieved a detente that will more or less allow craft breweries to operate under the status quo — that is, sell food and have live music on their premises.

Dorsey Knott

“Friday I thought for sure several of us would be closed, but as of this morning everything’s fine,” Knott says.

Monday’s development was a 180, Knott says, after craft brewers learned of new ATC restrictions earlier this year.

“Six weeks ago we got a list of changes and interpretations that would’ve put a lot of breweries out of business,” he recalls. “We weren’t allowed to have our bands anymore, weren’t allowed to have food, weren’t allowed to serve beer where people could consume it in a biergarten. It really restricted us.”

As The Advocate reported Saturday:

The Louisiana Office of Alcohol and Tobacco Control issued an advisory on the new rules Friday that has brewery owners hopping mad. The owner of Parish Brewing in Broussard said he’s considering moving out of state, and the owner of NOLA Brewery in New Orleans predicts three to four closures this year.

The advisory on the new rules had been in the works for about a month to clarify regulations called into question after all breweries received “cease and desist” letters in the fall and some received citations for practices they had thought were permissible.

The letter and citations made owners question if things like hosting yoga events, hiring live music and allowing food trucks to operate at the brewery would be allowed under the new administration.

Once the advisory was issued, however, the progress that industry leaders said they felt while working with ATC evaporated as the advisory included other new regulations in addition to permitting things like yoga and live bands.

That was Friday. By the conclusion of Monday’s meeting, Knott says, Marine-Lombard agreed to soften the new regulations and to revisit the issue in two months. (The Independent called Marine-Lombard’s office in Baton Rouge Monday and was told someone from ATC would call us back but we have yet to hear from the agency.)

Among the new regulations that had brewers worried was a requirement that food sales account for no more than 25 percent of retail receipts in taprooms that serve food. “The food limits were well below what anybody could do and still sell food,” Knott says. “If you buy a burger you have to consume like 15 beers,” he adds with a chuckle. “It really would’ve put breweries and their business models out of business.”

New state regulations would've undermined the burgeoning food-sales and live music component that has helped local craft breweries like Bayou Teche (above) thrive.

By Monday, according to Knott, Marine-Lombard agreed to extend the 25-percent regulation concerning food sales to total beer sales by the brewery. She also agreed to allow craft breweries to offer live music — as long as it’s performed under some kind of covering like a patio, porch or gazebo; the proposed regulations issued Friday would’ve required live music be restricted to taprooms. The regulations issued Friday by ATC would’ve also prohibited on-site food trucks at craft breweries. On Monday, according to Knott, Marine-Lombard softened that rule to stipulate that food trucks are OK as long as they’re not owned or operated by a business that has a state-issued liquor license.

These developments come after a number of craft breweries in the state received cease-and-desist letters from ATC last fall, mainly concerning food sales and live music, according to the article Saturday in The Advocate.

So, who was the source of the complaints? Many of them were anonymous, according to earlier communications between Marine-Lombard and the guild. Knott speculates that individual restaurateurs who felt financially threatened by newer breweries serving food were behind some of those complaints. But, according to The Advocate’s report, brewery owners say Marine-Lombard herself acknowledged that she had been pressured by the Louisiana Restaurant Assocation, a powerful lobbying group with deep pockets.

Knott, however, is quick to praise Marine-Lombard for working with the guild to find compromises.

“A lot of this over the weekend made it seem like she’s kind of a jackboot, but she’s been very gracious with her time,” he says. “There was widespread panic in the Louisiana brewing industry that all the things we thought we had gained by [working through the Legislature] would be undone. ...I think, to be fair, everyone’s happy [now]. Overall, the things that have made Louisiana breweries successful, we still have in place.”

Read The Advocate's Saturday story here.