The Boston Globe and Boston Herald have reported on a recent change or clarification in policy regarding “farmer-brewery” licenses by the Massachusetts Alcoholic Beverages Control Commission (ABCC).  Farmer-brewery licenses are intended to encourage the development of “domestic farms”, and appear in the regulatory statute alongside similar provisions for licensing of farmer-wineries, pub-breweries, and farmer-distilleries.

In late July, the ABCC denied an application for a famer-brewery license to be located in Everett, Massachusetts.  The ABCC followed up on August 1 with an Advisory, announcing that all farmer-breweries will henceforth need to demonstrate that at least half of the grains or hops needed to produce their malt beverages are grown by the licensee.  In an interesting exception, the ABCC announced that the “grown by the license” requirement could be satisfied if the licensee or applicant merely “contracted exclusively” for the rights to the yield of cereal grains or hops produced from acreage of domestic farmland.

In other words, the ABCC ruled that a farmer-brewer needs to actually grow at least half of the cereal grains or hops needed to produce its malt beverage “unless someone else grows the grains and hops for them, both exclusively and domestically”.

Some remaining confusion stems from whether “domestic” as used in the statute means “from within Massachusetts” versus “from within the United States”.  Most observers think the ABCC interprets “domestic” to mean “from within Massachusetts”, such that “farmer-brewers” would need to obtain their grains and hops largely from within Massachusetts.

That interpretation, however, could well be unconstitutional, under a line of recent court cases from around the country interpreting farmer-winery licenses.  Those cases basically hold that under the Commerce Clause of the US Constitution, a state cannot favor in-state interests over out-of-state entities in its liquor licensing scheme.

Stay tuned, the Globe reports that brewers are meeting next week with state treasurer’s office (which oversees the ABCC).