South Dakota Senate OKs craft brew compromise ending beer bill conflict

Dana Ferguson
Argus Leader
Blake Thompson, co-founder of Fernson Brewing Company, talks with employee Joel Gullickson. In his State of the State address earlier this week Gov. Dennis Daugaard proposed raising a barrel limit for craft brewers from 5,000 to 30,000.

PIERRE — The South Dakota Senate on Thursday advanced a compromise proposal that would allow craft brewers to sell their beer to retailers without a distributor and hike the barrel limit they can produce each year.

On a unanimous vote, senators approved Senate Bill 173. The measure moves now to the House of Representatives for committee consideration.

The amended bill incorporates two proposals, one brought by the governor's office and the other from beer wholesalers. Senate Majority Leader Blake Curd, R-Sioux Falls, fused the two to create a compromise proposal.

More:Ready to grow, South Dakota craft brewers back alcohol law overhaul

Beer distributor and Sen. Jack Kolbeck, R-Sioux Falls, lifted up the proposal as an "industry partnership bill." Brewers also celebrated the bill as a step forward for their industry.

"I’m just happy that everybody’s ideas were considered to come up with something that's really good," said Joel Thompson, a Fernson Brewery who runs operations and management.

He said the proposal would give the Sioux Falls brewery room to exceed the current 5,000 barrel limit without losing its downtown taproom location or losing licenses to sell wine and cider. And that'll make longterm planning easier, he said.

"We get to do business tomorrow just like we did it yesterday," Thompson said.

More:Concerned about craft beer bill, distributors bring their own

If approved, the bill would set a 1,500 barrel cap on the amount South Dakota microbrewers can sell directly to restaurants or stores without a wholesaler. Under current law, microbrewers must work with a wholesaler to sell to stores and restaurants.

Craft brewers would also be able to make up to 30,000 barrels a year while also keeping licenses that let them sell wine and cider or keep offsite taprooms open. The current limit is 5,000 barrels a year.

Follow Dana Ferguson on Twitter @bydanaferguson, call 605-370-2493 or email dferguson@argusleader.com