Brewery vs. Brew Pub: You May Have Changed and Not Know It

As you probably know, new legislation allows craft brewers to serve beer for consumption on-premises in quantities larger than just the typical 2-ounce tasting glass.

“It comes in pints!?”

The only caveat is that food has to be offered along with the beers. I’m pretty excited about this new law and I’ve been reviewing it as it pertains to insurance. Here’s an important piece and I highlighted a few things:

Section 1.   Section 51 of the alcoholic beverage control law is amended by adding a new subdivision 3-a to read as follows:

3   3-A. A LICENSED BREWER MAY AT THE LICENSED PREMISES CONDUCT TASTINGS OF, AND SELL AT RETAIL FOR CONSUMPTION ON OR OFF THE LICENSED PREMISES, ANY BEER MANUFACTURED BY THE LICENSEE OR ANY NEW YORK STATE LABELED BEER. PROVIDED, HOWEVER, THAT FOR TASTINGS AND SALES FOR ON-PREMISES CONSUMPTION, THE LICENSEE SHALL REGULARLY KEEP FOOD AVAILABLE FOR SALE OR SERVICE TO ITS RETAIL CUSTOMERS FOR CONSUMPTION ON THE PREMISES. A   LICENSEE PROVIDING THE FOLLOWING SHALL BE DEEMED IN COMPLIANCE WITH THIS   PROVISION: (I) SANDWICHES, SOUPS OR OTHER SUCH FOODS, WHETHER FRESH,   PROCESSED, PRE-COOKED OR FROZEN; AND/OR (II) FOOD ITEMS INTENDED TO COMPLEMENT THE TASTING OF ALCOHOLIC BEVERAGES, WHICH SHALL MEAN A DIVERSIFIED SELECTION OF FOOD THAT IS ORDINARILY CONSUMED WITHOUT THE USE OF   TABLEWARE AND CAN BE CONVENIENTLY CONSUMED WHILE STANDING OR WALKING, INCLUDING BUT NOT LIMITED TO: CHEESES, FRUITS, VEGETABLES, CHOCOLATES, BREADS, MUSTARDS AND CRACKERS. ALL OF THE PROVISIONS OF THIS CHAPTER RELATIVE TO LICENSES TO SELL BEER AT RETAIL FOR CONSUMPTION ON AND OFF THE PREMISES SHALL APPLY SO FAR AS APPLICABLE TO SUCH LICENSEE.

In other words, you have to sell (or give away) food with the beers consumed on or off premises. Based on the wording of it (“including but not limited to cheeses, fruits, vegetables, chocolates, breads, mustards and crackers”) you could probably put out a bowl of pretzels and call it a day; but, having met a number of brewers and knowing how creative they are, I suspect they have something way more awesome than pretzels in mind! However, if you want to keep costs down, companies like Snyder’s may have free pretzels to put out for your customers – it’s definitely worth a phone call to find out.

I’ve spoken to a number of my underwriters and I’ve gotten back similar responses from most: if the nature of the business is changed from just brewery to food and brewery, the classification of the business may be changed from brewery to brew pub. While the nature of the business will not drastically change, there are some potential coverage differences between these two classifications and it is important to be sure that coverage matches exposures. Brewers, if you are adding a food element to your business, be sure to inform your insurance advisor so that you are protected in the event of a loss.

The full text of the law can be found here: http://assembly.state.ny.us/leg/?default_fld=&bn=S07813&term=2013&Summary=Y&Memo=Y&Text=Y

Happy brewing to all of you and, as always, Cheers!

Nate Zacek