Tennessee Self-Distribution Recap for Brewers | Adams and Reese LLP

Tennessee statewide self-distribution began October 1, 2021 for brewers. Rob Pinson and yours truly have prepared the following summary of this revolutionary law. Enjoy brewing, self-distribution and earning money. In the words of Lee Brice,

One thing is clear,
by the looks of the crowd here

We will need more beer

What does the new law do? Entered into force on October 1, 2021

  • Removes ban on self-distribution outside your home country
  • The brewery can self-distribute beer in its home county as long as it produces no more than 25,000 barrels per year
  • The brewery may self-distribute outside of the home county, but only if:
    • It distributes no more than 1,800 barrels per year (does not include liquor sales); and
    • Self-distribution is not prohibited in this county by the wholesaler‘s contract
  • The various locations belonging to a brewery are likely grouped together for the purposes of the 1,800 limit
  • Once the 1,800 limit is exceeded, the brewery has 90 days to enter into a contract with a licensed wholesaler
  • In addition, the brewery must report self-distribution volumes by jurisdiction, file and maintain price lists, be subject to wholesaler price restrictions, be subject to wholesaler record keeping requirements, and submit monthly RAP reports. (Retail Accountability Program), including manufactured dining room sales

Existing requirements for self-distribution

  • Must have a retail operation to self-distribute
  • Cannot produce more than 25,000 barrels per year
  • Must register as a wholesaler with the Tennessee Department of Revenueincluding submission of bond (up to) $10,000
  • The brewery pays barrel ($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 wholesaler for all distribution, even in home county (25,000 bbl)
  2. Self-distribution in the county of origin and use of wholesalers for the rest of the state (25,000 bbl)
  3. Self-distribute in some counties and use the wholesaler for rest (1,800 bbl)
  4. Statewide self-distribution (1,800 bbl)
  5. Only sell in your bar without distribution (25,000 bbl)
  6. Do not sell in a bar and only use wholesalers for distribution (no bbl limit)