‘Delicate compromise’: Big changes could come to Alaska bars, breweries as part of broader alcohol law rewrite

JUNEAU, Alaska (KTUU) - After almost a decade of work and near misses, the Alaska Legislature is hearing a bill that would make a wholesale rewrite of the state’s alcohol laws and change how brewery and distillery tasting rooms can operate.

Senate President Peter Micciche, a Soldotna Republican, has carried the bill over multiple sessions. He says that it represents a grand compromise between the alcohol industry and the public safety sector, and then bar owners and brewers.

In previous attempts to pass the bill, the proposed changes for tasting rooms have been the most contentious and gotten the most attention. Micciche noted those changes make up roughly five lines of a 124-page bill. They include that:

• Tasting rooms could stay open until 10 p.m. instead of 8 p.m.
• Four live music concerts could be held at tasting rooms each year.
• Fundraisers, brewery tours and art shows at tasting rooms would be set in statute and couldn’t be changed by regulation.
• The daily drink limits at tasting rooms would stay unchanged.

There has long been friction between traditional bar owners and owners of breweries and distilleries across Alaska, known colloquially as “the bar wars.” The argument for changing rules for tasting rooms is that they’ve grown more popular and current state law doesn’t reflect that.

But bar owners often pay hundreds of thousands of dollars for a license and there has been resentment that breweries can serve alcohol after paying much less for their licenses. Brewery owners have argued that the cost of buying manufacturing equipment is similarly expensive.

Trade associations representing craft beer brewers and bar owners have signed on to support this bill, saying it represents close to 10 years of work.

Sarah Oates, head of the Alaska Cabaret, Hotel, Restaurant and Retailers Association, said it represented a “delicate compromise.” She said Alaska’s bars employ 32,000 people and bring in $2 billion in annual revenue.

Lee Ellis, head of the Brewers Guild of Alaska, said it represented a “modernization” of the state’s alcohol statutes. He said breweries have an economic impact of $330 million per year and employ over 2,000 people.

Senate Bill 9 unanimously passed the Senate on an 18-0 vote earlier in the month. But there have been questions about population limits for new tasting rooms. The bill says there can be one new tasting room per 12,000 people in communities across Alaska.

Sen. Donny Olson, D-Golovin, was concerned that could create “a monopoly” in villages. He noted no community in his Western Alaska district comes close to having 12,000 people.

Micciche said small communities across Alaska could have unlimited breweries under this legislation, but they would be restricted to one tasting room. The economics of the industry would not support more than that, he added.

“There’s an adequate room for expansion across Alaska over the next several years,” Micciche said, citing conversations with the brewers guild.

Under the legislation, municipalities could also petition the state’s alcohol regulator for more licenses beyond strict caps based on population.

While Senate Bill 9 moved relatively quickly through the Senate, the bigger challenge could be in the House of Representatives.

In 2020, it was on the verge of a final vote on the House floor when the session abruptly ended due to COVID-19. It was withdrawn in 2018 after it was amended in the House to reduce daily drink limits in tasting rooms.

Rep. Adam Wool, D-Fairbanks, said it will “probably” pass this year, but he is skeptical whether it is fair for bar owners, saying it could dilute their investments in their licenses.

“If you’re a brewer, I think it’s a good bill and you get to sell more beer over more hours,” he said. “But I think if you hold a traditional liquor license, you’re going to feel a little more squeezed in.”

Wool owned the Blue Loon in Fairbanks, but says he’s no longer a bar owner. He said tasting rooms have had some “mission creep” and now function in a similar way to bars.

Oates testified to the House Labor and Commerce Committee on Friday. She said the bill would provide a “more level playing field” for the alcohol industry. Brewers could buy full bar licenses if they want and there would be limitations on other license types, she added.

While the proposed changes to rules regarding bars and breweries have gotten the most attention, the majority of the bill would reorganize the state’s “hodge podge” of alcohol laws, Micciche said.

“This bill is important for commerce, it’s very important for public safety,” he added.

Public safety organizations have supported the bill, saying it would limit youth access to alcohol and make penalties for several alcohol violations more effective. There also would be new regulations on buying alcohol online, partly to prevent underage Alaskans from illegally buying it.

After years of pushing for changes to the state’s alcohol laws, Micciche is optimistic this bill could pass this session.

“Like any legislation I carry, it would be a relief to get it done,” he said.

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