Tuesday, June 3, 2008

Brewpubs and the Laws that Hinder Success

Thomas Cizuaskas over at Yours for Good Fermentables is quoted in the latest Mid-Atantic Brewing News.
Tom Cizauskas, sales rep for Baltimore's Clipper City Brewing Co. and a veteran brewer of several craft breweries, suggests that urban brewpubs "are victims of their own success." Many of the earlier brewpubs were looked on as urban pioneers, revitalizing rundown sections of the city, he reflects. But as the neighborhoods gentrified, property values —and rents— rose astronomically. In the DC area, Founders' Brewpub in Alexandria, Va. was forced out by rising rents, and Dr. Dremo's (the former Bardo Rodeo brewpub) has been shuttered to make way for mixed-use development. In Chicago, the original Goose Island brewpub on Clybourne Ave., has announced it will close by the end of 2008 because of a steep rent increase.

Tom brings up a very valid point, one that is perhaps exemplified in the recent news of DC brewer Jason Oliver's intent to open a brewpub in rural Nelson County. I'm not privy to the decision process in that move, but I think it would be a fair to assume that urban property values and rent costs had at least some influence. But there are other barriers in place to hinder the success of bars and brewpubs in Virginia, rural or urban.

Our local paper recently carried an article entitled "Tavern owners chafe at law" (no online version available):
VIRGINIA BEACH-The Edge offers 40 varieties of beer. The owner of the bar in Norfolk would like to tout his half-price special on Aventinus during "happy hour."

The beer is an international favorite, considered one of the world's best. During happy hour, it is reduced — to $6 a bottle.

"I can't market that," Billy Baldwin said.

Baldwin can legally sell his brews at a lower price until 9 p.m., when happy hour ends statewide. He just can't tell anyone about it.

State laws prevent liquor license holders like Baldwin, who also owns The Edge at the Oceanfront, from advertising discount beverages. He's allowed to place signs about specials inside the business, but not where they can be seen from the street.

The so-called happy hour regulations made the books in 1985. They were designed to promote temperance by limiting the ability to sell reduced-price drinks. But the rules are sobering to business owners, who say they're bad for business.

"I can't say, 'Hey, come in and get a dozen wings and a pitcher of beer for a set price: " Baldwin said. "You can go to Wildwood [N.J.] or Myrtle Beach [S.C.] where they can.

"I should be able to promote and market like every other business."

State Alcoholic Beverage Control Department officials say the happy hour regulations, like others the agency enforces, discourage overconsumption and bridle bad behavior, such as drunken driving.

Curtis Coleburn, ABC's chief operating officer, said that spreading the news on selling beverages at lower than the customary prices entices customers to drink more.

"It remains in society's interest to curb the abuse of alcohol, and ABC is the primary state agency assigned to the task," Coleburn said.

Establishments that serve alcohol already have a legal obligations that restrict serving alcohol to intoxicated persons. These happy hour regulations limit the establishments' ability to promote to even responsible consumers. The state is also in effect limiting consumers' choices on where they choose to do business. It's perfectly legal to enjoy an Adventinus, but not legal to be informed in advance about a good deal on the drink.

In a positive step this past March, a federal judge overturned an ABC regulation against college newspapers running alcohol-related ads and making references to happy hours. The judge saw the prohibition as a violation of the right to free speech. The ABC still maintains the ability to enforce the ban on advertising by licensed businesses. One can only hope that the recent court case paves the way for applying the same principles to businesses such as Mr. Baldwin's.

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