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Another Voice: New law addresses growing thirst for craft beverages

By Phillip A. Delmont and Katherine A. Markert

The glory days of Buffalo’s brewing history used to conjure memories of when the William Simon, Phoenix, Iroquois and other breweries populated the city. Now, with craft breweries located from the waterfront to Larkinville, the Southern Tier and beyond, not to mention the region’s wineries, distilleries and growing number of cider producers, Western New York is once again seeing momentum and excitement in the beverage industry.

Thanks to a recently signed piece of legislation, more growth could be on tap.

Industry regulations place numerous restrictions on production, operation, sales and marketing of products, to go along with stringent licensing requirements. Such restrictions can effectively put a stranglehold on the ability of small operators to reach consumers in a meaningful way. At the same time, there has been a growing demand across the state and nationally for local craft beverage products in recent years.

The 2014 Craft New York Act, which Gov. Andrew M. Cuomo recently signed into law, will bring important changes to the beverage industry, bolstering the ability of small, locally owned manufacturers of beer, wine, spirits and cider to grow their business.

The new law revises statutes affecting these license holders: brewers, farm brewers, cider producers, Class A-1, B-1 and farm distilleries, wineries and farm wineries. Minimum production thresholds were implemented across each of these categories, and the maximum production thresholds will increase. This will allow license holders to grow their business without the need to apply for a different type of license, a requirement that could have been cost-prohibitive.

Furthermore, the new law enacts changes regarding the ability of certain beverage manufacturers to operate retail establishments, such as a restaurant or hotel, on or adjacent to the manufacturing premises.

As evidenced by these changes, the Craft New York Act resonates with concepts of affordability to conduct business in New York State and supporting and promoting the growth of local New York businesses. Just as we have seen in Western New York, an increasing number of people across New York State are seeking to formalize their enthusiasm for local craft alcoholic beverages into an active business, leading to a flood of activity in all segments of the industry.

From the beverage manufacturers themselves to the supply chains that support their work, the beverage industry is impacting local and regional economies across New York State. Under the new regulatory environment established by the 2014 Craft New York Act, more local companies will be able to taste the distinct flavor of success.

Phillip A. Delmont and Katherine A. Markert are members of the Alcohol and Beverage practice group at Harter Secrest & Emery.