The Business of Beer: RI changes regulations to tap into growing industry

EXETER, R.I. (WPRI) - For years, strict regulations limited how much beer customers could drink and buy at Rhode Island breweries. But recent changes to those laws have sparked explosive growth in the craft beer industry.

In 2016, the General Assembly voted to allow breweries and distilleries to sell limited amounts of their products to plant visitors for sampling and off-site consumption. Prior to that change in law, only wineries were allowed to do that.

Since that change was made, the number of microbreweries nearly quadrupled in the two years, according to the R.I. Department of Business Regulation.

The Rhode Island Brewers Guild is a nonprofit organization that promotes breweries, facilities collaboration between brewers, and advocates for them in government and community affairs. They say that 26,000 barrels of craft beer were produced in 2017 - the equivalent of 8.5 million 12-oz. cans.

That demand was evident on a fall trip to the Tilted Barn Brewery in the woods of Exeter. Dozens of people - a mix of locals and visitors from Maine, Pennsylvania and New Jersey - were lined up waiting for the barn doors to purchase the craft brew.

Stevin Miliefski was one of the many craft beer enthusiasts who showed up.

"The culture has grown exponentially in the last couple years," Miliefski said. "It's a huge economy booster and I think that's what has changed now, that instead of people going to the store to buy beer, they're going to the source to get it."

Miliefski is part of a growing culture of bottle-sharing - people who buy craft beer from breweries all over and trade them online or in person.

The trend is not a cheap one - the state maximum of eighteen 16-oz. cans at Tilted Barn goes for $85.

Matt Richardson, the owner of Tilted Barn Brewery, says the liquor law changes in 2016 made Rhode Island more "business friendly." Before then, his brewery was operating on a two-barrel system, but then the business grew.

"Now we've gone up to a seven-barrel system with some 15-barrel fermenters and we've maxxed out space in here and we can't keep up," Richardson said.

Department of Business Regulation Director Liz Tanner admitted that some of the state's post-Prohibition liquor laws were outdated.

"We just needed to take a look at them and make a change to reflect today's customer," Tanner said. "It's been great for small business - for manufacturing, for tourism."

Earlier this year, two additional beer industrybills were signed into law by Gov. Gina Raimondo.

The first eliminated the so-called "Keg Tax" that required brewers to pay sales tax on kegs they purchase to fill with beer and then sell to distributors. The second piece of legislation reduced the alcoholic beverage manufacturing and wholesale licensing fee from $3,000 to $500.

Rhode Island's liquor laws are just one example of the statutes the Department of Business Regulation has been evaluating to try and remove burdens for all kinds of small business owners.

"We have lots and lots of things just like that are a direct result of outreach to businesses and we're looking for more," Tanner said. "We'd like to do one every year if we can."

The R.I. Commerce Corporation has set up a small business hotline - anyone with concerns or complaints can call 401-521-HELP.

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