Many people are interested in starting breweries, but the significant legal requirements associated with this process make it helpful to retain a business attorney to advise the brewery. Breweries are regulated under both Michigan and federal laws. Sometimes city ordinances may provide additional restrictions on how a particular brewery operates, such as its hours of operation. Brewers may operate under a brewer's microbrewery or brewpub license. These licenses relate to how much beer the establishment may produce, as well as limitations on selling, requirements, and restrictions. If you are interested in opening a brewery, let the Grand Rapids and Traverse City brewery lawyers at Neumann Law Group help you with the legal requirements.Understanding Brewery Law
A brewer's license is the most powerful license that a brewery may have, authorizing a brewery to manufacture as much beer as it would like. In contrast, a microbrewery license permits the production of 60,000 barrels annually, and a brewpub license permits a brewery to make 18,000 barrels annually. None of these licenses authorizes breweries to sell directly to retailers, although breweries and microbreweries that follow other business requirements are permitted to sell to licensed wholesalers.
Brewery licenses are defined by MCL 436.1105(11) and issued by the Michigan Liquor Control Commission. They may also have multiple brewing facilities, but each will require a separate license. In addition to authorizing unlimited brewing, they also allow those that hold them to sell the beer produced under the license to consumers to drink at two of their brewing facilities, although the holder of the license may sell their beer at other facilities to be drunk away from the premises or sampled in a hospitality room. They may sell the beer to licensed Michigan wholesalers, which may resell it to licensed Michigan retailers. However, they need to enter into an exclusive territory agreement with each of those wholesalers. They will also need to get a Brewer's Notice from the Alcohol, Tobacco, Tax & Trade Bureau. Our brewery attorneys can guide Traverse City and Grand Rapids clients through this process.
Microbrew licenses are defined by MCL 436.1109(3). In determining the 60,000 limits, the combined production of all brewing facilities, including those outside Michigan, shall be considered. Microbreweries that produce 30,000 barrels or fewer may sell directly to their consumers, and they may drink the microbrews on or off the premises. Customers may sample onsite.
Brewpubs are required to hold an additional license, which is either a Resort, B-Hotel, A-Hotel, Tavern, or Class C license. They may not sell to wholesalers or retailers, and they need to operate a full-service restaurant, at which 25% of gross sales are made in connection with nonalcoholic items, such as burgers, snacks, or other food.
In addition to license requirements, breweries, microbreweries, and brewpubs need a surety bond that is executed by an insurance company authorized in Michigan. The bond is for $1,000 for the first year. The bond amount for each year thereafter is based on an average of the excise taxes that were paid the year before. They also need to retain proof of financial responsibility, meet a server-training requirement, and pay a license fee, both initially and upon renewal.Consult a Brewery Lawyer in Grand Rapids or Traverse City
Numerous other laws must be followed once the brewery is set up, including employment laws and common law duties. Our Traverse City and Grand Rapids brewery attorneys can help set you up so that you have a strong chance of business success. If you are interested in setting up a brewery, microbrewery, or brewpub, our firm may be able to assist you. Our firm also represents clients in Ann Arbor, Flint, Lansing, Kalamazoo, Detroit, Wyoming, Saginaw, Muskegon, Midland, Holland, Warren, and Petoskey, as well as communities throughout the Upper Peninsula. Contact the Neumann Law Group at 800-525-NEUMANN or via our online form to set up an appointment. We also can assist clients who need a liquor license lawyer or guidance in other aspects of business law.