Tennessee Self-Distribution Recap For Brewers

State-wide self-distribution in Tennessee 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. In the words of Lee Brice,

What does the new law do? Took 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 must 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 sales made in taproom

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 the Tennessee Department of Revenue, including submitting the (up to) $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)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.