Iowa alcohol rules under review as industry changes

With rapid growth of craft beer and wines, Branstad seeks recommendations

  • Photo

By Rod Boshart, Gazette Des Moines Bureau

DES MOINES — Gov. Terry Branstad has ordered a review of Iowa laws governing liquor, wine and beer with an eye on balancing the needs of a rapidly expanding “micro-enterprises” industry with state regulations and social concerns on alcohol.

“Iowa laws regulating alcohol were first written in 1934,” Branstad said Wednesday in announcing the study. “Many things have changed in this industry since then, and we want to make sure our laws are not barriers to entrepreneurs and businesses.”

Branstad named Stephen Larson, administrator of the Iowa Alcoholic Beverages Division, and Debi Durham, director of the Iowa Economic Development Authority, to spearhead the review beginning next month with the goal of providing recommendations to him by January.

Sen. Jeff Danielson, D-Cedar Falls, chairman of the Senate State Government Committee, said he welcomed an effort to improve and streamline Iowa’s regulatory framework while maintaining the three-tier system for manufacturers, distributors and retailers that make up Iowa’s spirits, wine and beer markets.

“I fully support it,” said Danielson, who had hoped for a similar legislative interim study. “We can preserve the three-tiered system and grow Iowa products at the same time. There is common ground around some changes. I see it. We just haven’t had a chance to get everybody in the room and to talk about it.”

Among the topics for consideration would be easing restrictions on “out-the-door products” by microbreweries that currently serve their products at on-premise restaurants, or lifting production caps on distilleries and allowing them to sell their products on-site, he said.

With the rapid growth in recent years of craft breweries, native wineries and micro-distilleries, the composition of the state’s industry is far more diverse and innovative than in years past, according to the governor’s office.

“Micro-enterprises in this industry are locating in our communities — both big and small — and are not only creating jobs but are also increasing tourism in our state,” said Durham. “It’s important that we modernize our laws so this cottage industry is on a level playing field and feel like they have a chance to succeed.”

A study on the craft beer industry prepared for the Iowa Wine and Beer Promotion Board last year indicated the statewide economic impact topped $100.2 million in 2014, generating 1,520 jobs.

Lt. Gov. Kim Reynolds noted that the demand for Iowa-made products in the beverage industry is growing every day, making it important to ensure that Iowa laws are encouraging business development as well as protecting Iowans.

Larson said laws governing alcoholic beverages must be “clear and easily understood,” noting that exceptions and “carve-outs” that have been enacted over the years have led to “confusion and ambiguity” in some regulatory areas.

The working group will be designated to look at the existing laws and make recommendations for changes that could better position the state for growth in the cottage industries of winemaking, brewing and distilling, according to the governor’s directive.

Appointees will work with representatives of the alcoholic beverages industry, including wholesalers, manufacturers, retailers, prevention specialists and regulators to gain a broad range of perspectives.

Give us feedback

Have you found an error or omission in our reporting? Tell us here.
Do you have a story idea we should look into? Tell us here.