January in Richmond means the opening of the Session of the Virginia General Assembly. For at least the last seven years, the opening of the Session has also brought any number of potential changes to laws affecting Virginia breweries. The hot topic this year is Senate Bill 306.
Since the passage of the “Pint Law” back in 2012, Virginia breweries have been allowed to sell draft beer at retail for on-premise consumption. This did not sit well with some restaurant owners as those folks were required (and still are) to sell at least $2,000 of food each month in order to serve beer and wine. Breweries have no such requirement to sell food.
Over time, breweries began opening “satellite taprooms” in which beer produced at the original location could be transported and sold at retail at the satellite location. Some felt these satellite locations were taking advantage of a loophole in the law: Breweries were allowed to sell beer at retail without serving food, but what if the satellite location wasn’t actually brewing?
SB306 amends § 4.1-208, the law that allows breweries in Virginia. It adds a requirement that at least twenty percent of any beer sold for on-premise consumption must be produced on-premise. One controversial provision, a requirement that any brewery have the capability of brewing at least three barrels of beer at a time, has already been stricken. As it stands, the Bill is set to go into effect January 1, 2019.
Though the Bill is technically geared toward all Virginia breweries, it will certainly affect satellite breweries the most. As any brewery owner will tell you, breweries are not cheap. It’s hard to maintain a number of large brewing systems across the Commonwealth. That’s why many satellite locations are smaller than the original breweries. In the same vein, it’s also the reason why satellite breweries often supplement their draft lines with beer produced at the original brewery. This will still be allowed under the impending change, but we will likely see more brewing at satellite locations in order to keep up with the new twenty percent requirement.
As the Bill was unanimously passed by an extremely bipartisan Virginia Senate, expect similar progress through the House of Delegates. Please stay tuned to LeClairRyan’s Food and Beverage Team’s page as we monitor the Bill’s progression and any additional amendments.
The link to the Bill in full is here.