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State cuts microbrewery fees  to help build craft beer industry

State officials hope to generate revenue, encourage tourism.

Christian Moerlein is renovating space in Over the Rhine's old Brewery District for their new brewery. Ohio's new law will enable the brewery to offer beer samplings and the sale of beer at the facility.

Staff photo by Nick Daggy Christian Moerlein is renovating space in Over the Rhine's old Brewery District for their new brewery. Ohio's new law will enable the brewery to offer beer samplings and the sale of beer at the facility.

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By Mark Fisher  and Eric Schwartzberg, Staff Writer 8:54 PM Wednesday, January 18, 2012

A new state law that cuts start-up costs for microbreweries and makes it easier for a growing number of craft distilleries and brewers to sell to the public will trigger growth and expansion in the emerging industry, promote tourism, create jobs and generate tax revenues, state and industry officials say.

The law allows small breweries to serve samples and to sell their brews from tasting rooms without buying a $3,900 special permit.

It also allows more small-batch distilleries to open in Ohio and to offer samples of their craft spirits from their own tasting rooms.

The legislation known as House Bill 243 sailed through both the Ohio House of Representatives and Ohio Senate with unanimous support and was signed into law by Gov. John Kasich in late December.

It is scheduled to take effect March 22.

Commerce department officials said the new law will put Ohio ahead of the curve.

“These changes will provide new opportunities for micro-distilleries and craft breweries to operate and expand, creating jobs for Ohioans,” said David Goodman, director of the Ohio Department of Commerce.

Craft distillery is an increasingly popular market that caters to consumers seeking distinctive artisanal products.

State officials and legislators drew a comparison to the economic benefits of Ohio wineries and wine festivals that attract an estimated 2 million visitors annually. The new distilleries and breweries may also create new demand for Ohio agricultural products such as fruits and grains.

With 47 total breweries statewide, Ohio ranks 32nd among the 50 states in the number of breweries per capita, according to the Brewers Association 2010 data.

But there are signs of growth as well.

According to the Ohio Department of Commerce Division of Liquor Control, the number of permits issued for new breweries rose from 50 in 2009 to 65 in 2011, and permits for new liquor-spirits producers jumped from four in 2009 to 13 in 2011.

The trend has been felt in the Greater Cincinnati area, and the growing number of local entrepreneurs who are developing micro-breweries and craft distilleries in the region hailed the provisions of the new law.

The less restrictive regulations and lower licensing costs scheduled to take effect in March had an immediate impact on the plans of Christian Moerlein, which is expanding the small-batch production brewery it started in Cincinnati’s Over-The-Rhine neighborhood in 2010.

Expansion plans include a 30-barrel brewhouse that will enable the company to brew 25,000 barrels of beer annually and a tasting room, according to Greg Hardman, president and CEO.

“That (the new law) will enable us to do that so we don’t have to spend the extra money on the initial permit,” Hardman said. “That’s kind of a big thing for us because a lot of people are interested in brewery tours.”

The new location also will brew and serve Christian Moerlein’s new high-gravity beer, which will have six new styles and a higher alcohol content than other beers.

Rivertown Brewing Company also will benefit from the changes to the state law, according to co-owner Randy Schiltz.

“It’s a good deal for the (microbrewing) industry because it puts us on a little more of a level playing field with wineries, who have always been able to sell samples without having to have another license,” he said.

Rivertown is expanding its Lockland facility from 4,000 to 6,000 square feet and using a portion of its new space to open a tasting room, Schiltz said.

Schiltz favors the final version of the new law, which allows breweries to sell their wares by the pint, over the original version, which limited sales to 2-ounce samples.

“Our vision for this is to have taps coming out of our cold room,” he said.

“We are a production brewery, so right now we don’t keep hardly any beer here at the brewery. We don’t have any beer for sampling.”

Jared Hamilton, a brewer at Mount Carmel Brewing Company, said the new law will provide “a lot more freedom.”

“It also will help out as far as making us a destination for people to come visit,” said Jared Hamilton.

Once the law goes into effect, the Union Twp. brewery plans to have at least some form of tasting available via a permanent tap room once the law goes into effect, Hamilton said.

“We hope to have a permanent tap room within the next few months,” he said.

“We’ll be able to test out smaller batch beers and some experimental beers ... and get people’s direct reaction to them.”

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