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Minn. brewery seeks to change law

Fitger's Brewhouse already boasts that it is Minnesota's biggest brewpub in terms of production. Now, co-owner Tim Nelson aspires to take it to the next level by installing a brewing and bottling operation in the former Carlson Book & Record building at 206 E. Superior St. in Duluth, where he also envisions a bakery, cafe and conference center.

But he'll need some help from the state Legislature before he can move ahead.

"We've hit a glass ceiling," Nelson said.

That's due to a state law that restricts Minnesota brewpubs from selling beer for off-premises consumption except in growlers -- jugs of take-out beer -- that customers must buy on location, he said. Fitger's and other Minnesota brewpubs cannot lawfully sell bottled or keg beer to other bars or through regular retail stores.

Those restrictions stand in sharp contrast to rules in other states, including Alaska, California, Colorado, Washington and Wisconsin, where brewpubs are allowed to sell kegs and bottles of beer at retail stores.

"Brewpubs from all across the nation are able to ship their products to sell in Minnesota, but Minnesota brewpubs can't," Nelson said.

John Moore, co-owner and founder of Barley John's Brew Pub in New Brighton, said: "It's enough to make you think about leaving the state, but I don't really want to have to drive to Wisconsin every day."

A bill sponsored by Sen. Sandra Pappas, DFL-St. Paul, and now before the Senate Commerce Committee would remove the restriction. A companion bill has been introduced in the House by Reps. Dave Thompson, RLakeville, and Linda Scheid, DFLBrooklyn Park.

Rep. Kerry Gauthier, DFLDuluth, supports the legislation, saying, "It just doesn't make sense for people operating Minnesota brewpubs to not be able to distribute their product in their own state."

But the bill has met opposition from the Minnesota Beer Wholesalers Association. The association fears the bill would blur the lines between brewers, distributors and retailers, according to its president, Michael Madigan. He said those lines were drawn to maintain independent operations and guard against vertical integration and undue market influence.

Madigan said he has no quarrel with Nelson personally.

"Our opposition is not related to him or his product. Our opposition is to some of the unintended loopholes this bill, as drafted, could open," Madigan said.

Moore said he finds it interesting that the wholesalers association has not taken as strong a stance against another bill that would allow Minnesota microbreweries to sell beer on-site and distribute up to 250,000 barrels of their own beer. Dubbed the Surly bill, it was instigated by Brooklyn Center's Surly Brewing Co., which plans to invest $20 million in a brewery development that would include a bar, restaurant, beer garden and event venue.

The Surly bill has enjoyed popular support, including an organized Facebook campaign to sway legislators.

Nelson said that, initially, the brewpub bill seemed to be riding the coattails of the Surly bill. But last week that changed when the Surly bill was unanimously approved by a Senate commerce committee which then tabled the brewpub bill.

Nelson said that 5-year-old Surly is on the verge of cracking 20,000 barrels of annual production. If his Fitger's operation could also tap into a larger retail market, he says it could reach 15,000 to 20,000 barrels of production in short order. Fitger's produced about 2,000 barrels last year.

The potential is even greater, Nelson said, citing a Colorado brewpub that sells about 60,000 barrels a year, and one in Juneau, Alaska, that churns out 100,000 barrels annually.

"Not to brag, but we make as good a beer as you can find anywhere in the world." he said.

Peter Passi is a reporter at

the Duluth News Tribune, which is owned by Forum Communications Co.