Small Vermont Brewers Tell Committee H.672 Would Ease Market Access by Allowing Limited Self-Distribution

Three witnesses representing Vermont’s craft‑beer sector urged the Government Operations & Military Affairs committee to advance H.672, a bill they said would give small breweries a practical, limited option to self‑distribute beer to local bars, restaurants and retailers.

Emma Arian, executive director of the Vermont Brewers Association, told the committee that H.672 is “not radical” but a modest adjustment that would allow breweries to self‑distribute up to 5,000 barrels annually under their existing manufacturing license. She framed the change as consistent with past updates to Vermont’s alcohol laws, saying the proposal is intended as “an on ramp” that preserves the three‑tier system while helping the smallest producers access local markets.

Arian said the VBA represents 56 member breweries (about 90% of the state’s brewers) and offered statewide figures for 2024: a $460,000,000 economic impact, 353,000 barrels produced and roughly 2,800 jobs. She said the VBA vetted the proposal over three years with members, neighboring‑state brewer associations, the Department of Liquor and Lottery, distributors and other industry groups, and that recent consolidation has left fewer distribution options: “Over just the past 2 years, 3 Vermont beer distributors have closed,” she said, naming Grama Vermont, Vermont Beer Shepherd and Pelmont Beverage Company (Pelmont announced a March 12 closing in the testimony).

Small brewers, Arian said, face structural hurdles to self‑distribution under current law: to distribute they must form a separate distribution company with separate books, tax filings, insurance and an annual wholesaler license fee of about $1,200. H.672’s 5,000‑barrel limit, she said, is a ceiling not an expectation and mirrors limited self‑distribution already allowed in Maine and New Hampshire.

Jesse Cronin, owner of Lucy and Howe Brewing in Jericho, described a tiny operation that began during the COVID shutdown and now produces about 125 barrels annually. Cronin explained that retail sales and distribution splits substantially reduce the brewery’s already slim margins and that finding a distributor is increasingly difficult after local small distributors closed. "Allowing us to distribute up to 5,000 barrels a year as part of our manufacturing license would greatly simplify the system breweries use to get beer to market and in front of customers," he said, adding that he has a list of retailers and prior distributor account data prepared if the law changes.

A committee member asked whether the industry was in a sustained downturn; Arian cited rising input costs (she said cost of goods is up about 17% nationwide) and changing consumer habits as factors squeezing margins and reducing frequent long‑term customers for craft brewers.

Darren Orr, co‑owner and brewer at 2 Heroes Brewery and Public House in South Hero, echoed the testimony. Orr said Vermont’s three‑tier framework forces many small brewers to create an additional company to act as a distributor, incurring paperwork and the roughly $1,200 annual fee even to distribute under 100 barrels. "We currently pay $1,200 per year to distribute under 100 barrels of beer annually," he said, and argued that neighboring states’ allowances for self‑distribution show Vermont is behind the common practice.

Witnesses asked the committee to advance the draft language (the committee posted draft text on its website) and offered to continue technical discussions with counsel and staff. The hearing recessed for a short recess; no formal motion or vote on H.672 was recorded during the session.

Next steps: committee staff posted draft language to the committee site and the chair paused the hearing for 12 minutes pending additional witnesses and counsel; the record does not show a formal introduction, vote, or amendment during the portion of the hearing in the transcript.