South-central Minnesota lawmakers went 3-for-3 with their beer bills last session. They created the position of beer educator, expand the definition of a small brewer and exempt the Winnebago Craft Brew Fest from fees on out-of-state brewers.
Sen. Gary Dahms, a Republican who represents New Ulm, sponsored a bill to raise the threshold for breweries to be eligible for a state subsidy. It allows brewers that make up to 250,000 barrels a year, up from 100,000 barrels, to be eligible for a tax credit of $4.60 per barrel up to 25,000 barrels.
The subsidy is worth up to $115,000 a year. Schell's Brewery of New Ulm has been over the 100,000-barrel limit about three years, President Ted Marti said. He said the definition of a “small brewer” was set in the 1970s, when the small brewers were getting “eaten alive” by their larger competition.
Of the change, Marti said “it was really trying to have that small brewer credit reflect what's really happened in the industry over those last 40 years.”
Brewing requires expensive equipment, and Schell's will likely have to expand its fermentation equipment soon. They're also adding a filling room for machinery that puts their beer in bottles and cans.
“It by no means goes into our pocket,” Marti said of the subsidy.
Tim Tupy, co-founder of the Mankato Brewery, said his company brewed about 1,000 barrels last year, so it won't hit either the new or old threshold anytime soon.
But he said it's good news for his company when larger craft brewers like Schell's and Summit benefit.
“We all kind of work together in some aspects for the bigger cause of introducing people to craft beer,” he said. In other words, someone who tries Schell's Firebrick may try Mankato Brewery's Organ Grinder, too.