The number of breweries and brewpubs operating in the United States continues to increase. According to the Brewers Association, it is believed that there are close to 4,000 breweries and brewpubs currently operating in the United States. The popularity of craft beers has resulted in numerous beer enthusiasts deciding to turn brewing as a hobby into a business by opening a brewery or brewpub. Like any business venture, deciding to open a brewery or brewpub should not be taken lightly. Careful planning can be vital to the success or failure of the business.
Anyone deciding to open a business faces various decisions and challenges. Failing to carefully consider and account for these decisions can have long lasting legal consequences and may be the difference between a business succeeding and failing. Some of these decisions include entity formation, funding, management and operation of the business, location of the business, and the proper ways to protect the business. Failing to properly plan could result in serious financial hardships to the business, owners, and/or any investors.
All businesses must comply with numerous local, state, and federal laws. Besides having to satisfy the many requirements that other business are required to satisfy such as maintaining workers compensation insurance, sales tax permits, building requirements, business licenses, etc., there are also numerous state and federal regulations that govern the production, distribution, and sale of alcohol with various government agencies being tasked to oversee and regulate the sale of alcoholic beverages. These agencies include the Missouri Division of Alcohol and Tobacco Control, the Alcohol and Tobacco Tax and Trade Bureau (TTB) and the Food and Drug Administration (FDA). A business owner must obtain necessary local, state, and federal licenses or permits. Some additional requirements directed at breweries include completing a Brewers’ Notice, satisfying labeling requirements (COLAs), and satisfying formula requirements. There are also very specific tax compliance requirements which must be followed. Ensuring adequate recordkeeping and knowing what the law requires is critical to ensure the necessary documents are accurately and timely completed. Failing to ensure compliance with local, state and federal regulations could result in serious consequences at a later date.
Therefore, proper planning can help avoid legal traps that may result from various local, state or federal laws which impact breweries and brewpubs. If you are interested in opening a brewery or brewpub, please feel free to call and set up an appointment to meet with one of our experienced attorneys who can help guide you through the process.
Adam R. Renner
