23 March 2011

A clarification from Sun King

We received an email from Sun King recently. They wanted to clear up some mistakes in a recent article published by the Indy Star and we felt it would be good to post it here for everybody to see.
Mistake In Indy Star Story Bites Brewer In Butt

As you might have noticed, Sun King Brewing Co. garnered a lot of attention thanks to the local news media over the last week. But one mistake found its way into the Indianapolis Star story on Tuesday morning and was repeated in on-air news briefs by several other outlets. The mistake in question is the idea that Sun King, along with award-winning Munster, Ind. brewer 3 Floyds, is attempting to change the state definition of a small brewery in order to gain a tax benefit. This is not true and we are unclear as to how it made its way into the story. Brewers pay a flat state tax per barrel regardless of whether we brew 500 barrels or 5,000,000. We pay several different kinds of taxes, we do it gladly, and we are proud to generate jobs and tax revenue for our state. We aren't looking for any special benefits, we are only asking that the state allow us to continue growing so that we can create more jobs and generate more tax revenue. The 20,000 barrel cap was put in place 20 years ago, when only a handful of brewpubs were operating in the state, making 500 to 1,000 barrels each year. It's a different market now and it needs different rules.

If the law is not changed, what will likely happen is that 3 Floyds will move it's operation to Illinois and Sun King will cap our growth and stay at just under 20,000 bbls per year.

If we wanted to grow beyond that 20,000 bbl annual limit, here's how it would effect our business -

1. Our Tasting Room would be closed. No more tasting hours, no more retail sales of growlers or cans. This is what happened to Surly Brewing Co. in Minneapolis. They have a beautiful tasting room that they can't use because they outgrew Minnesota's state limits for small breweries. That would mean that...
2. Our Tasting Room manager and approx. 12 part-time employees would lose their jobs.
3. Our logistics manager and three full-time delivery drivers would be laid off because...
4. We would have to use a distributor to deliver our product to bars, restaurants, and package liquor stores, which would eat approximately 1/3 of our income from sales.

Again, we just want to continue to grow and contribute positively to Indiana's culture and economy. We hope that our state legislators see the value of that.


  1. The comments have already gone haywire on yesterday's article online. There is no hope in trying to present a valid argument to a stupid population.

    It doesn't help when the article fails to succinctly point out the before and after of the 20,000 bbl limit. Leave gaps and people will fill them on their own.

  2. I said it on twitter, but I just don't see this ending well this year. Democrats on walkout + budget year + redistricting this year = nothing but those things are getting done.

    I hope I am wrong, and I hope this can move forward and the law will change to the 60K barrels like it is at least at the federal level.

  3. I don't know the ins and outs of the current law. So can someone explain why 20,000 barrels is automatically going to mean Sun King needs to close their tap room and all the rest of the negatives?

    My confusion really stems from the statement that the brewers already pay a flat tax regardless of how much they produce. So what exactly changes when they hit 20,000 barrels? Also, am I the only one surprised that 3 Floyd's isn't already well beyond that?

  4. This is my understanding of the law Erik:

    When a brewer in Indiana passes the 20K mark Indiana doesn't consider then a small brewer anymore. After 20K barrels they are not allowed to operate a brewpub or a tap room. Sun King and FFF's would have to close them. Sun King doesn't go through a distributor to gets its beer to market. After 20K they will have to use the 3 tier system to get their products to market.