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Tennessee's state-wide self-distribution law takes effect for breweries

October 4, 2021

State-wide self-distribution began October 1, 2021 for brewers. Rob Pinson and yours truly prepared the following summary of this ground-breaking law.

Enjoy brewing, self-distributing and making money.

What does the new law do?

• Takes effect October 1, 2021

• Removes the prohibition on self-distributing outside your home county

• Brewery may self-distribute beer in its home county as long as it does not produce more than 25,000 barrels annually

• Brewery may self-distribute outside home county, but only if:

        - It does not self-distribute more than 1,800 barrels annually (does not include

taproom sales); and

        - It is not prohibited from self-distribution in that county by the wholesaler’s contract

• The various locations owned by a brewery are probably lumped together for purposes of the 1,800 limit

• Once the 1,800 limit is exceeded, the brewery has 90 days to contract with a licensed

wholesaler

• In addition, the brewery shall report self-distribution volumes by jurisdiction, file and maintain price lists, be subject to price restrictions of wholesalers, be subject to wholesaler record-keeping requirements, and submit monthly RAP (Retail Accountability Program) reports, including on sales made in taproom (discuss details)

Existing Requirements for Self-Distribution

• Must have a retail operation to self-distribute

• Cannot produce more than 25,000 barrels annually

• Must register as a wholesaler with Revenue, including submitting the $10,000 bond

• Brewery pays barrelage ($4.29/31-gallon barrel) and wholesale ($35.60/31-gallon barrel) taxes on self-distributed beer

What are your options?

1. Sell in taproom, use a wholesaler for all distribution, even in home county (25,000 bbl)

2. Self-distribute in home county and use wholesalers for rest of state (25,000 bbl)

3. Self-distribute in some counties and use wholesaler for rest (1,800 bbl)

4. Self-distribute throughout state (1,800 bbl)

5. Only sell in your taproom with no distribution (25,000 bbl)

6. Do not sell in a taproom and only use wholesalers for distribution (no bbl limit)

Click here to read the full legislation.

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