New Arizona Law Increases Microbrewery Production Limit

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Signed into law, Senate Bill 1030 increases the maximum production limit for a microbrewery from 40,000 barrels per location to 200,000 barrels in aggregate; requires a microbrewery that exceeds the calendar year limit for production or manufacturing of beer to surrender all microbrewery licenses and dispose of all retail licenses for locations that are not on adjacent to the brewery premises before receiving a producer’s license (grandfathers any person who holds or controls a microbrewery license as well as a producer’s license prior to the effective date of this legislation); permits a microbrewery licensee to sell beer produced or manufactured by other microbreweries for consumption on the premises if such sales do not exceed 20 percent of the licensee’s annual volume of beer sales at the premises and the beer is purchased through a wholesaler in this state, if the other brewery has an established distribution relationship with that wholesaler;  allows the holder of a microbrewery license that produces fewer than 40,000 barrels annually to sell and deliver beer it has produced or manufactured to certain microbrewery locations authorized for retail sales and any other retail licensee, in an amount not to exceed 3,000 barrels; limits persons who hold a microbrewery license to a combined maximum of seven retail licenses (grandfathers holders of microbrewery licenses who hold or have applied for more than seven retail licenses prior to the effective date of this legislation); stipulates that a microbrewery that produces more than 40,000 barrels of beer annually may not receive retail licenses for locations other than those on or adjacent to the microbrewery or sell or deliver beer to retail locations other than those on or adjacent to the microbrewery.

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