GOP Congressional candidate and State Senator, Neal Tapio believes South Dakota’s thriving microbrewery industry would do even better if they could produce more suds and still legally sell their own products to stores and restaurants independently, rather than being forced to sell to large distributorships who monopolize the wholesale liquor industry in South Dakota.
Senate Bill 169 would simultaneously expand the production limits for microbrewery operating licensees, while also giving microbreweries the ability to sell their products to bars, restaurants and stores without going through a distributor.
“As it stands right now, a microbrewery that wants its best beers to be featured in a beer tasting festival down the street from where the beer is brewed has to sell their product to a distribution wholesaler who can then take that beer, put it on a truck and deliver it to the beer tasting festival,” Tapio explained. “That’s nonsense.”
“I’m not sure how many beers you’d have to consume before that kind of rule would seem logical to you, but I’m fairly certain it’s somewhere above the legal limit of .08%, ” Tapio said.
“I think it’s good sense to eliminate that kind of obstacle to small business operation.”
In Senate testimony this week in Pierre, Tapio spoke in favor of the microbrew bill, saying the provisions would mean a further boost for South Dakota’s thriving craft beer industry and would streamline business practices both for startup operations and for larger, more established brewers looking to expand their production.
Tapio also made waves at one point by chiding fellow Senator Jack Kolbeck of Sioux Falls for his opposition to the bill, citing conflict of interest. Kolbeck is a longtime partner in KAM-Beal Distributing, a Sioux Falls area beer distributorship that stands to be impacted by potential lost distribution fees of microbrew and craft beers. Kolbeck spoke at length about supposed pitfalls of SB 169.
Wholesalers countered by bringing a proposal of their own which would allow for expanded microbrewery production limits and let microwbrewers transport beer to bars and tap houses they own and operate. Critics say that counterproposal, SB 173 isn’t a compromise and defeats the intent of SB 169. Tapio agrees.
“Distributors are trying hard to hang on to this piece of the marketplace that they’ve dominated for so long,” Tapio said.
“But it should be obvious to anyone that people who produce the beer should be able to haul it, deliver it where and to whom they want and when, without a massive middle man getting in the way.”
“In most cases, what state government does best to help small businesses is to stay out of the way of their business,” Tapio said.
“I think this is a clear case of being able to pass a law that gives microbrew and craft beer producers more options in how they get their product to market. And I think that’s a very good thing,” Tapio said.