What is the difference between a brewery and a brewpub? This is one of the many questions I am frequently asked. Let’s have quick Q&A.
Q1. Do you need a license to become a brewer (person)? A1. No. Anybody can jump on a system and brew. That’s the short answer. In order to sell beer, the premise must have a license and the beer must be made on the licensed property, (for instance, you can’t brew at home and bring it to an establishment and then sell it under their name).
Q2. What license does a brewery (place) need to make and sell beer? A2. Not going into sales tax licensing but only production licenses there are 4 types of licenses that a brewery could apply for through the federal government (you need State licences as well), each has its own set of rules.
Production Brewery – This is the most common type of license and allows one to make and sell beer on property (tasting room) or for distribution. There are no volume production limits. These tasting rooms cannot sell liquor, wine or other alcoholic products besides Wisconsin-produced beer on the premises. The Fermentorium in Cedarburg is an example. They are allowed to serve food if they follow the basic heath codes and are inspected.
Brewpub – A restaurant with a brewery on-site. Most restaurants also have a full bar (guest beers, wine, liquor, etc) a brewpub is no different. The brewpub must hold a local municipality Class B license in order to apply to be a brewpub. The brewing license has a ceiling on volume produced and also how much beer is sold on-site verses off-site. Inventors Brewpub is an example.
Alternating Proprietorship – Also known as “gypsy brewing” because the brewery personnel doesn’t own their own equipment but rents the equipment from an existing brewer. This license is similar to a production breweries because the Alternating Proprietorship physically brews their own beer, but they are more-or-less just leasing the equipment for a period. This does allow them to brand and sell their own products and move from brewery to brewery as long as the proper paperwork is in place. Esser Brewing is an example.
Contract brewing – This type of brewery has become a target of ridicule and taboo amongst other craft breweries, but I don’t think it is justified. Nobody ridicules Craftsman tools for contracting their tools to the best companies out there to make the variety of tools they sell. [steps off soap box] This license is similar to the alternating proprietorship except they are hiring other brewers to brew for them and usually package too. Octopi in Madison contract brews for a variety of different breweries like One Barrel Brewing, Brenner Brewing, & Hop Haus Brewing as examples. Stevens Point Brewery, Minhas Brewing, Sand Creek Brewing and City Brewing in LaCrosse also all do contract brewing for other smaller breweries.
Every brewery in the State of Wisconsin can contract or alt. prop. but currently doesn't allow brewpubs to contract or alt. prop. for other breweries flavors nor can a brewpub have it's flavors produced by anybody else and package wholly under their own name. (The only exception is a brewpub chain like Water Street Brewing for other Water Streets with the same owners) Another clarification: the collaboration beers that Inventors Brewpub helped make must still have the other brewery as the primary on the package.
One example where a law change would make sense to open up brewpubs to alt. prop. would be 8th Street Alehouse in Sheboygan, WI. They are a one barrel nanobrewery with aspirations to upgrade to a 7bbl brewery. They are not allowed to have two of their flavors made at another brewery while they shut down to remodel their brewery. The regular customers won't be able to get their flagship beers during this time. It would be nice even if just temporary licencing allowed the breweries to expand and help industry/commerce.
Hopefully you learned something about beer and alcohol licensing even if it's just that the whole ball of wax is complicated.