Sierra Nevada East HQ search moves to Tennessee as local liquor law debate ignites

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(Alcoa, TN) – Sierra Nevada Brewing has selected a site in the Volunteer State as a potential location in its search for a new facility.


Tennessee isn’t normally the center of attention on these pages though it finds itself on the front page today with the news that Sierra Nevada is looking at a location in the eastern part of the state. More specifically, the small town of Alcoa with a population of less than 8,000 people (2000 Census).

…but not without lots of complications…

In February, State Senator, Ken Yager introduced Bill 1224, a harmless one-pager reducing residency requirements for liquor store applicants as regulated by Title 57. An amendment was later added that makes some administrative changes with respect to fees, etc.

The second amendment to SB 1224, introduced last week, is what is creating so much buzz.

Beer Law Blog lays out a few of the nutty liquor laws in Tennessee including one that requires a brewery to also hold a second license as a distillery in order to produce beer greater than 5% alcohol by weight. Nashville-based Yazoo Brewing, which got its license last summer, is the only brewery to hold a distillery license and City Brewing, which just purchased the old Coors plant in Memphis, is rumored to be another candidate for the license.

Amendment 2 both re-defines beer (“high alcohol content beer”) as having an ABW cap of 20% and introduces a pilot program in which a brewery wouldn’t be required to hold a distillery license to produce these beers. The crux of the argument among locals is that only one brewery will be allowed to participate in this proposed program in each of the state’s three grand divisions. Here is a copy of the amendment which perversely establishes the rules in each division. One brewery will be in Memphis, one will be in Nashville and another in that tiny town of Alcoa.

Why Alcoa? Senator Yager answered that question in his comments on the new amendment.

This is where it gets good.

I certainly appreciate the patience of the members of the committee as we have worked our way through these amendments. [They] are admittedly very technical and frankly somewhat confusing and that is probably because we had twenty lawyers and as many lobbyists working on these.

Let me try to put it in perspective as I ask for your support on this. We have a very serious industrial prospect for the city of Alcoa and Blount County which Senator Overbey brought to my attention which resulted in amendment two. We discovered that there was an unintended consequence that might have an adverse effect on a concern in both Memphis and in Nashville hence these amendments to make sure that existing activities in those communities were, in no way, harmed.

The thrust of the amendment and the intent originally was to ensure the city of Alcoa’s competitive place in securing a very significant industrial prospect and I certainly appreciate the committee’s patience in going through all of these technical amendments but that is what it is all about.

After news of the amendment spread, Yazoo Brewing was questioned as to whether it was part of a lobbying effort for getting this proposed exclusivity around “high-gravity” brewing rights. Yazoo Brewmaster, Linus Hall, responded to the questions on his blog on Friday.

[…] I got a call last Friday afternoon from a lawyer who helped us get our TN ABC distillery license last year. He told me that there is a certain nationally distributed brewery who was looking to set up another brewery location in either eastern TN, Virginia, or North Carolina. They want assurances from TN that, if they chose TN for their new brewery, they would be able to brew high-gravity beer, and to serve it at an on-site restaurant. So an amendment was added to an unrelated bill, that would create a new definition of “high alcohol content beer” and authorize the ABC to issue licenses to brew it. But then the state-wide definition was narrowed to only allow this particular brewery to qualify. Why, I don’t know.

At the same time, the group who purchased the old Coors brewery in Memphis got wind of the amendment. We were going to join with them, to lobby for the bill to include all breweries in TN, but then found out they wanted to go it alone.

We don’t have the resources to hire lobbyists. I started calling and emailing our senators. I talked to our distributor, asking them to try to contact the legislators and lobbyists crafting the bill. We have had ZERO input into the wording of this bill.

If Virginia and North Carolina sound familiar in that (underlined) context, it is because those two states were already rumored to be among the east HQ candidates for Sierra Nevada.

On a phone call this afternoon, Sierra Nevada Communications Coordinator, Bill Manley, confirmed that Alcoa, TN, was among a short list of locations that the company was considering for its East Coast headquarters.

Sierra Nevada has received dozens of emails and phone calls since the Tennessee situation erupted late last week. While the company does provide a list of criteria to interested East HQ locations, Manley said that the company does not hire lobbyists and has had no input in the drafting of this bill. This has caught everyone at the brewery by surprise.

He noted that Sierra Nevada has heard that the amendment is going to be re-worked later this afternoon.

It is slated to be voted on this Tuesday though that may be up in the air.

Alcoa is an attractive site for a number of reasons. Manley mentioned Alcoa’s similarity to Chico, the quality of life, the town being a relatively convenient location for shipping and the community’s green focus. On that note, the town announced the birth of Pellissippi Place late last year, a business development park that sits at the entrance of a major highway, is only a few miles from a commercial airport and requires all businesses that develop there to be LEED-certified.

Manley could not confirm the site within Alcoa at which they were looking.

As for Senate Bill 1224, we should have a clearer picture of what is happening over the next 24-36 hours.

Update I: Via Art Whitaker on Facebook…”I received an email from Senator Bill Ketron this morning saying he will move in committee to remove amendment 2 from the bill calling it ‘a terrible amendment.'”

Update II: Via Nashville Beer Geek‘s Sean Smith…”Email from Senator Johnson: ‘I have spoken with Sen. Yager regarding your concerns. He has assured me that he will remove any language that is harmful to current or prospective brewers. I will continue to monitor the legislation to be sure. Thanks for the email.'”

Update III: Via Marble City Brewing Co-Owner, Johnathan Borsodi, on Facebook…”Per Mark Cate, Special Assistant and Policy Advisor to Gov. Haslam, ‘We agree that the amendment as written will not work and are working to find a better solution.'”

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Photo credit: naslrgoues on flickr (creative commons)

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11 thoughts on “Sierra Nevada East HQ search moves to Tennessee as local liquor law debate ignites

  1. Alcoa’s aluminum has no bearing on our decisions either for or against any potential business in Tennessee.

    It was never even a factor in consideration.

    Cheers!

    Bill Manley
    Sierra Nevada Brewing Co.

  2. @ Bill Manley

    I hope you don’t let a few rogue lawmakers affect your decision to locate in TN. The craft beer community does not think of Sierra Nevada as the bad guys. We would be excited beyond words if you set up shop here.

    We Tennesseans are showing how passionate we are about craft beer, and you can see that lawmakers are willing to listen to the consituents on such short notice. We just want to be sure this bill includes all brewers in TN. A change in the beer cap has been something we have been wanting for a long time. It probably would not have even come to the table had you not considered our state for your new facility. We thank Sierra Nevada for that, and please relay that to Mr Grossman. We also understand that your company is against a lot of the language in amendment 2. That will help our cause

    Choose TN, you won’t regret it.

    Regards

    Sean Smith
    Nashville Beer Geek

  3. YES!!! This is awesome news! With Dogfish no longer distributing in TN, Sierra Nevada will (hopefully) fill in the void for great beers…especially if the hi-gravity bill goes through.

  4. TN also has fairly low state excise taxes at $4.34/bbl, ranks 38th.

    Compared to some east coast states like NC at $16.43/bbl you save a lot of money… I bet the land is cheap out that way too.

  5. Mr. Manley, Thank you for your interest in Tennessee, the area you are looking at is beautiful country, we in Tennessee refer to it as Gods Country. Your employees will enjoy a fantastic quality of life and college football like you have never seen it before!!!!

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