Vermont Legislature SmartTranscripts:

[Matthew Birong (Chair)]: Talk about I'm I'm with THC in it. Welcome back, folks. 10:15. We're right at about fifteen minutes ahead of schedule. I'd like to thank thank our next witness witnesses on, H672, for being available a little bit early, so we can keep this train running ahead of schedule. So, we're going take testimony next on six seventy two, an act relating to distribution of malt beverages by licensed manufacturers. And, I see our guests are over here. We could just go in order, with Jesse Kronig. What's that? You gotta go you then the order is yours. Yes. You can tee it up however you want. Emma, please join. Good to see you. It's been a while.

[Emma Arian (Executive Director, Vermont Brewers Association)]: I know. Two years,

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: maybe. Yeah.

[Emma Arian (Executive Director, Vermont Brewers Association)]: I have paper copies of a two pager, if anyone would like it. You also have it electronically.

[Matthew Birong (Chair)]: Okay. I'll take our time. If somebody wants to pass it on.

[VL Coffin IV (Member)]: Would you Does

[Emma Arian (Executive Director, Vermont Brewers Association)]: anyone else want to hear Thank you. Great. Good morning. Thank you for the opportunity to testify today. My name is Emma Arian, and I'm the executive director of the Vermont Brewers Association, or the VVA. The Vermont Brewers Association was founded in 1995 to promote and strengthen the culture of craft brewing in Vermont, marketing, education, and advocacy for Vermont made beer. We're a five zero one(six) nonprofit trade association, and our vision is simple: make Vermont the premier beer destination. The VBA was founded by Greg Noonan, a name that carries a lot of weight in the craft brewing world. Greg was not just a brewer, he was a teacher, an author, and a true pioneer. In 1988, he opened the Vermont Pub and Brewery in Burlington, breaking a ninety four year old drought and opening the state's first brewery. What's especially relevant for today's conversation is that before Greg could open those doors, the law didn't allow manufacturers to sell their beer on-site. So Greg partnered with Bill Mahers, who was a state legislator at the time, to change that. Together, they rewrote the statute to allow on-site sales of beer made by the manufacturer. The idea made its way through the liquor control board, multiple legislative committees, both chambers, and ultimately was signed by governor Madeleine Kuhnen. Today, every brewer in Vermont that offers a pint across the bar at their own facility owes a debt to Greg Noonan and Bill Mayers for doing the hard and careful work of modernizing Vermont law to reflect how small breweries actually operate. I share that history because h six seventy two fits squarely in that same tradition. It's not radical. It's not about dismantling the system. It's about making a thoughtful adjustment so Vermont law keeps pace with reality. Today, the VBA represents 56 member breweries, which is about 90% of the breweries in the state. In 2024, Vermont's craft brewing industry had an economic impact of 460,000,000, producing 353,000 barrels of beer supported by 200 supported 2,800 jobs, and once again ranked number one in the nation per capita for beer production and breweries. We're proud of that, but we're also concerned about where things are heading. Today, we're here to discuss H-six 72, an act relating to distribution of malt beverages by licensed manufacturers. I want to be clear that this bill did not appear overnight. For the past three years, the VBA has been actively discussing self distribution with our members to understand where real problems are and where opportunities might exist. We've talked directly with brewers across the state, especially small producers, about what's working, what isn't, and what barriers they're facing getting their beer into the local market. As part of that work, we met with executive directors of the brewers associations in Maine and New Hampshire, where limited self distribution already exists. We shared our proposal with the Department of Liquor and Lottery, with beer distributors, with the wine council, and with the distilled spirits council. Has been a collaborative and transparent process. What we consistently heard from our smallest members is that they're struggling to get their product to market, and a major reason for that is consolidation in the distribution marketplace. Over just the past two years, three Vermont beer distributors have closed. Kraft Vermont, Vermont Beer Shepherd, and just this week, Vermont Beverage Company announced it will close on March 12. That leaves three players in the state. When distribution options shrink, small breweries feel at first. As you'll hear from both Jesse and Darren, small producers simply aren't attractive accounts for large distributors when volume is limited. And even when a distributor is willing to take on a small brand, that brand often doesn't receive meaningful attention in an already crowded portfolio. Under current law, if a small brewery wants to self distribute to local bars, restaurants, or stores, they have to create a separate distribution company, separate books, tax filings, insurance, and compliance requirements, and pay an annual license fee of about $1,200 just to deliver a relatively small amount of beer. Waiving the fee alone doesn't solve the problem. The real barrier is the structural burden of creating and operating a second legal entity. For very small breweries, that's simply not realistic. H six seventy two addresses problems in a narrow and practical way by allowing breweries to self distribute up to 5,000 barrels annually under their existing manufacturing license. It's not about bypassing wholesalers long term. It's about creating an on ramp and a way for small breweries to build demand, grow intentionally, and eventually become attractive distribution partners. It's also important to understand that this proposal is self limiting by design. Self distribution takes time, labor, and resources. Approaching 5,000 barrels would be a major operational lift for a small brewery. That number is a ceiling, not an expectation, and most breweries will remain well below it. Vermont would not be an outlier in adopting this approach. New Hampshire and Maine already allow limited self distribution under a manufacturer license, and both states continue to have strong wholesaler networks. Those sim those systems have not been undermined. I also wanna be clear that this does not open doors to cooperative distribution. The authority is limited to a brewery distributing its own product, and breweries with existing distribution contracts would remain fully subject to those agreements. This bill does not alter contract law or allow breweries to bypass established wholesale relationships. At its core, H-six 72 is a modest adjustment that reflects the realities of today's market. It gives small Vermont breweries a realistic way to access local accounts, grow their businesses, and remain viable in an increasingly consolidated distribution environment while preserving the three tier system. Vermont has a long history of making smart and careful updates to its alcohol laws to support small and local producers. Age six seventy two continues that tradition. Thank you for your time, and I'm happy to answer any questions.

[Matthew Birong (Chair)]: We got to run through a tugger last week on this, so the nuts and bolts are known. But the general understanding is that allowing for self distribution self distribution to these smaller producers, is just gonna give them, more capacity to access the market where they're not finding that with within the current structure and the current operators in the distribution world. So I guess that's the the boiled down version. Am I right? Yeah. So yeah. Do we have any questions for Emma? I appreciate the history on that background, too. I remember I was in like grade school probably when Hub and Brew went in and my my dad was like thrilled, like beyond belief. And they just say it is that, sort of, like, flagship needs to have, like, how this entire, like, industry has, like, developed from the ground up. So, like, I really do appreciate that, like, be up on where we were because it was such a dearth of production. And, you know, it was that that that one step that really was, like, the first seed that created the industry we know now. So

[Emma Arian (Executive Director, Vermont Brewers Association)]: We celebrate Greg Noonan on March 4 at Vermont Prep and Brewery every year. You're all welcome to come and celebrate. I do have a question. I can't remember If I heard it or read it on the news about how Vermont craft brewers are having a little bit of a dip lately or an adjustment in the industry. And I'm wondering if you could talk a little bit about how this could or might help Definitely. Situation. So with tariffs and just economic status right now, cost of goods are up 17% coast to coast. So that's one eating into margins. Two, younger people aren't drinking as much, so they are not finding these lifelong customers anymore. And folks aren't spending as much money as they were. They're buying the cheaper 12 packs of beer instead of the four packs from our local manufacturers. I think Jesse and Darren will both talk about how their breweries are being impacted by that, and why this would be really important for their breweries too. Great, I look forward to it, thank you.

[Matthew Birong (Chair)]: Okay, at the end of the day. Well, thank you.

[Emma Arian (Executive Director, Vermont Brewers Association)]: Yeah. Thank you.

[Matthew Birong (Chair)]: And whichever one of you, John, would you like to call next? Good

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: morning. There was some debate at the government affairs committee meeting last week of whether or not I've owned a tie.

[Emma Arian (Executive Director, Vermont Brewers Association)]: I own four. Can you introduce yourself for the record, please?

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: My name is Jesse Cronin. I own and operate and clean Lucy and Al Brewing Company in Jericho, Vermont. I've got some hard copies of testimony here. Does anybody need?

[Matthew Birong (Chair)]: No. If you could send a digital copy, if you haven't, to our

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: That one has been sent. Yeah.

[Matthew Birong (Chair)]: But just to finish it. It is. Okay. Thank you. Have nine devices going right now. So thank you.

[Emma Arian (Executive Director, Vermont Brewers Association)]: Thank you.

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: Alright. Good afternoon. My name is Jesse Cronin. I own and operate Lucy and Out Brewing Company in Jericho, Vermont. Thank you for the time today to consider some necessary adjustments to Vermont's three tier structure for distributing beer from manufacturer to customer. I'm here today to express my strong support and the support of the Vermont Brewers Association, Grate six seventy two. A bill that will allow brewers to distribute up to 5,000 barrels of malt beverage annually to their local bars, restaurants, and, retail stores. My road to brewing, bring you right back, could kindly be called circuitous. My wife and I met in Brooklyn, New York as elementary school teachers. Our first child was born in Vienna, Austria, while we worked at the American International School. Our second child is the only genuine Vermonter in the family, born in 2010 after we returned to The States. Once here, the choice was made that I would stay home with the kids. At that point, they were one and three for a couple of years. And after the kids started school themselves, I needed something to do. So we decided I would leave teaching and start brewing, something I'd been doing at home for about a decade. I started filling kegs from 3PM to 11PM at Magic Hat in 2016, which was a treat as a 39 year old, moved to the cellar and fermentation in 2017, and then up to the brew tower in 2018 where I brewed all the magic hat classics until 2020. Number nine, Hocus Pocus, Blind Faith, Circus Boy, etcetera. This brings us to early twenty twenty. My wife, now superintendent, could see what was developing in regards to the state's response to the COVID pandemic. Knowing the schools would close, we made the decision I would quit Magic Hat and I would be home with the children. I'd registered Lucy and Brewing as a business back in late twenty eighteen, so we also optimistically thought that this was my opportunity to launch a small craft brewery. There was a lot of debate at home about whether optimistic was the correct word. Lucy and Howe Brewing, a company officially launched in May 2020 to little fanfare. We were deep in the COVID shutdown. I brewed and packaged beer in an old summer kitchen at our house. Customers would buy beer online. They would drive up to the house, show their ID through the car window, and I would load beer in the trunk. The biggest issue we regularly had to deal with at the time was when my children had online classes and I had to brew beer at the same time. There were a few places we could point the camera in the brewery that did not have beer cans in the back, raising the eyebrows of many of the teachers in Jericho. Student teacher conferences were a treat that year. So now it's 2026. Lucy and Howe Brewing Company remains one of the five smallest breweries in the state. Each batch I brew is the equivalent of about 30 to 35 cases of beer. And we wind up with the equivalent about about 1,200 cases of beer a year. As breweries go, it's tiny. By way of comparison, when I worked at Magic Hat, I typically brewed that same 1,200 cases by lunchtime. The attached photographs to the testimony illustrate this. The first picture is of myself in one day of packaging. It's about 93 gallons, about 19 cases, and six logs of beer. By way of comparison, the second picture is also of myself, inserted for scale with one day of packaging over Vermont's second largest brewery, zero gravity, approximately 70 7,000 gallons. The fun fact is that both days of packaging lasted about the same amount of time. Thank you. I'd like to take the opportunity to thank Zero Gravity for the picture. Currently, Lucy and Howe Brewing is limited to selling beer out of our tap room, an old eighteen fifties general store in Jericho that we have converted into a shared coffee and beer space with Brewhouse Coffee Company. We sell retail cans and bottles to go as well as draft pours to be enjoyed on-site. We have an incredibly small kitchen, and we provide some meal options. The brewery employs three part time workers to help staff the tap room. I work sixty to seventy hours a week to make it all happen. I make about $5.30 an hour. All in all, we've created a nice community space that we are quite proud of. To survive and thrive, Lucy and Howe needs another regular and reliable avenue to get our beer to customers and to bolster cash flow. There are times of the year when the need for this additional revenue source is emphasized by low tourism numbers, which I know we've kind of addressed, but this summer with Canada was a little bit of a treat, and the seasonal ebb and flow of the brewery business. And speaking, having just finished up dry January, we can kind of vouch for this. Distribution has the potential to fill this gap nicely, but not in its current form. Currently, are two roads to distribution. We can find a distributor to take us on, or we can decide to self distribute. While both are possible, both have issues which make them unsuitable to pursue. In regards to finding a distributor, Lucy and Howe Brewing Company was carried and distributed around the state from 2021 to 2025 by Vermont Beer Shepherd. While it lasted, this relationship was a positive one. They would tolerate our inconsistent and limited supply, and they would carry to stores that were considered out of the way. They did so with pretty favorable terms. Vermont Beer Shepherd closed suddenly in early twenty twenty five, and at that time, they offered the brands they carried to other larger distributors. Some were picked up, others, like ourselves, were not. Brewers had very little say. As a very small producer, a literal drop in the proverbial bucket. These large distributors have not shown Lucy now any interest, and I have serious concerns about the attention our beer would receive if they did. It's hard to overstate how small an operation brewery of our size is compared to other brands in their portfolio. Their lack of interest is not because of the quality of my product. My business would not have lasted this long if I brewed bad beer. It's because I literally cannot brew enough beer that would make a partnership with my brewery worth the distributor's effort. There are also revenue implications to selling to distributors. Let's say you come into our taproom and you buy a case of beer. About 45% of that price goes to the materials needed to make the case, ingredients, packaging, utilities, production. The remaining 55 goes towards all the other costs of the business, the rent, the payroll, taxes, supplies, electricity, maybe if, you know, don't get excited, but maybe a little bit of profit. It's pretty straightforward. Now let's say you go to a retailer, your local craft beer shop, and you buy that same case of beer. 45% of that still goes to the cost of making the beer. That cost doesn't change. The big change is the remaining 55% is now split three ways. A tiny slice of it goes to us to cover our costs, and the remainder is split between the distributor and the retailer. In this scenario, the cost of getting beer out to the public is quite literally Self distributing my own beer also poses significant challenges for a brewery my size simply because of current law. If I would like to distribute under existing legislation, I need to form an additional business. I'd apply for a distribution license, most expensive of all the licenses, and set up this new company with its own books, bank accounts, tax obligations, invoicing, staff, all of it. Essentially, the current law requires me to sell beer to myself on invoice and then sell that beer from my new distribution company to retailers also on invoice. It's an overbearing process, eclipsing any potential reward. I'm here today to ask if these distribution hurdles be adjusted or removed so that small producers like myself can get more beer out to market. It's a small percentage of total beer brewed in the state. However, freeing up how we can deliver that small percentage to consumers will make a large difference to us. We would encourage you to adjust the system and allow our breweries a distribution path that better suits our size while accommodating some flexibility, 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, allow our breweries to deepen and strengthen relationships with retail partners, some of whom are either struggling to meet larger distributor order minimums or struggling to stock a variety of product. Direct access to markets would create the opportunity for small brewers to grow their brands, ideally to the point where they would be attractive to one of the larger distributors. The reality here is that adding self distribution to an already full schedule is a lot of work. It just also happens to be the most cost effective way for small brands to intentionally grow and nurture small business. Provide small businesses with another avenue to increase our cash flow so we can remain in business, and parity with surrounding states, Maine and New Hampshire, for example, already allow this in their manufacturing licenses. That's it. Thank you very much for the time. I certainly appreciate the opportunity to come and speak, and I'm happy to answer any questions. So

[Matthew Birong (Chair)]: apologies if you spoke to to this testimony. Sure. But my my question is right now, if this was asked roughly as written as proposed, The do you have locations identified that would carry your product Yes. Now that you just don't have access to through within the current

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: location center? Yes. I mean, I have a map. I have a map of, like, it's basically Route 15 To 93 To 100 sort of loop. And there's retailers in the past I've had a relationship with. BT Bear Shepherd, when they closed, one thing that they did was, that they didn't have to do, they gave me a list of all their retail accounts and how much they purchased from me and etcetera. So that list is sort of ready to go. I also have had places reach out. That relationship with retailers piece is not insignificant, especially the smaller retail stores. Sometimes they have a minimum purchase order that they need to reach in order to buy from distributors, and sometimes they struggle to meet that. And then it's the same portfolio that everybody else has access to. So getting smaller, more unique brands is a challenge. So I've had them come to the store a couple of times and ask when, you know, which is not an answer I've been able to give any sort of answer to. Or not a question I've been able to give any sort of answer to.

[Matthew Birong (Chair)]: Yeah. So so in short, though, you have identified locations that you have access to. Mhmm. If we adjust the Yes. Yes. How such self distribution. Yep.

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: Yeah. The idea would be to get up and running as soon

[Matthew Birong (Chair)]: as possible. No. No. No. I understand where you're coming from for sure.

[VL Coffin IV (Member)]: Rut Coffin, just because out of curiosity Sure. The the 5,000 barrel limit. Yes. Okay. That, for small brewers like you, would allow you a lot of room for growth. Yes. Just quick math. You say you do 93 gallons Per batch. Yeah. Per batch. So that's three barrels. Yes. So you'd be at your current rate, if you could do that every day, it would still a little over a thousand barrels.

[Matthew Birong (Chair)]: Yep. Oh, for sure.

[VL Coffin IV (Member)]: But it would allow lots of growth room and growth potential for you and for other smaller manufacturers.

[Matthew Birong (Chair)]: Yes. Absolutely.

[VL Coffin IV (Member)]: I'm just running quick math. So

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: No. That's that's, that's

[Matthew Birong (Chair)]: absolutely accurate. My

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: yearly, output last year was about a 125 barrels. Yeah. I brew about once a week. I'm I'm in the old general store, and I'm on the 2nd Floor. So if I get any bigger than I am in my current space, I'm gonna end up in the basement, like, not on purpose.

[Darren Orr (Co-owner and brewer, Two Heroes Brewery & Public House, South Hero)]: Mhmm. So Yeah. So I've got

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: some other limits there. Yeah. But the 5,000 barrels is a it's a nice number for us because for me, it's it does allow a lot of flexibility, and it does allow a lot of room for growth. And Emma has sort of addressed this already, but, like, that 5,000 number is also sort of the break point where it no longer becomes and this is this for me, for personally speaking. Like, if I'm making that much beer, I don't want to be distributing it myself. Like, because distribution is is it's a decent amount of work, it's a it's a good sized headache. And when you get to that size, you're triggering some volume numbers numbers that make distribution a lot more reasonable. Part of the reason that it's unreasonable for me is because I'm talking about five cases a week. So that thin little margin on five cases is not worth it. It doesn't compensate, at all. But if you're doing that fentanyl margin on 5,000 cases a week, like, that's a different story. That's a totally different territory. So that that number is a good one as far as, you know, I get anywhere close to that, I'm gonna be looking for partners anyway.

[Matthew Birong (Chair)]: Bret Morgan. Curiosity Killer. Nate's kids?

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: Name my kids?

[Matthew Birong (Chair)]: No. Is that your kids' names?

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: Oh, Lucy and Hal? No. No. I I it's my kids are Jake and Lana.

[Matthew Birong (Chair)]: Cutting close. I'm sorry. No. Sorry to ask.

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: I no. It's

[Matthew Birong (Chair)]: understand. That

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: is that is the two the number two question we get. No. My we are we live the where the brewery started is in eighteen eighties house in Jericho. It's right around the corner from

[Matthew Birong (Chair)]: Yeah. I know where it is.

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: It built by Lucy and Howe

[Matthew Birong (Chair)]: Okay.

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: Who was in town. And my daughter, one day, misunderstood what the name was. Yeah. So she for a long time, she was like, this house is great. They did a great job. And I just thought she was, like, super great about pronouns for a while, but she had misunderstood it.

[Matthew Birong (Chair)]: She just thought it

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: was Lucy and Howe.

[Matthew Birong (Chair)]: So we

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: just, yeah, hung on to that.

[Matthew Birong (Chair)]: Let's get to the the backstory on the brand name. Oh, yeah. Right. So that's why. Times. Yep. Any other questions for Jesse? No. Thank you for your time, sir. Yeah.

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: Thank you very much, guys. I appreciate it.

[Matthew Birong (Chair)]: Appreciate it. Yes. And it looks like that leaves us with Darren.

[Darren Orr (Co-owner and brewer, Two Heroes Brewery & Public House, South Hero)]: Alright. Good morning, everyone. My name is Darren Orr. I'm the co owner and brewer at two Heroes Brewery and Public House in South Euro in Grand Isle County, and I'm here to support Bill Age six seventy two, introduced on behalf of the Vermont Brewers Association and sponsored by rep Lucy Boyden. I want to say thank you to Chair Birong, Vice Chair Hango, and the committee for your time today. We really appreciate it. My personal journey into craft beer began as a consumer, then a home brewer, then a student, and now a business owner running a brew pub in a small town. Back in my college days, I would scour liquor stores and craft beer markets for the best regional, national, and imported beers on the shelf, learning the industry through my taste buds. It was at that same time that I decided to make beer at home, or should I say, my tiny college apartment amongst roommates with very little space. After years of tasting and home brewing, in 2017, I formed a plan to start a brew pub with a good friend whom I'd been home brewing with, Matthew Bartle. Matt came from the restaurant industry, and I was more of a beer geek, so it was a perfect match. I lived in Colchester. Matt lived in South Hero and ran a bagel shop and deli. He was very connected to the community there. We reckon we both recognized the dire need for a restaurant and community space in the islands. And what better way to fill that gap than with a brew pub? To support our business plan, I applied to and attended brewing school at the Siebel Institute of Technology in Chicago, the oldest brewing school in The US. Matt and I drew up designs for the brewery in 2018, secured local investment the same year, and finally acquired bank financing in 2021. We began in a tiny pilot space on the corner of Route 2 and Ferry Road in South Europe, while anticipating a daunting construction schedule, supply chain delays, increased costs, and general COVID madness. This allowed us to start getting beer out on a pilot scale, which helped build a great local customer base, creating anticipation for the opening of the new building. Construction was a bear, and we finally opened a new brew pub in the 2023. From the very beginning, we never planned on becoming a distribution brewery. The goal was, and still is, to be a local brew pub in a small town and only wholesale a minimal amount of beer because margins on draft beer poured in house are far better than distributed beer. That being said, we realize the value of having beer on store shelves. It reminds people you exist. It reminds people that you exist. The marketing aspect alone made it worth getting some beer off-site and eventually into people's homes. The hope is that as they are staring at the can label on their coffee table, they imagine themselves some someday eating a hamburger at the brew pub. Being small, conscious of profit margins, concerned about proper representation in the marketplace, and obsessed with detail and control, we decided to self distribute. Easy, right? We learned this was not at all easy. The three tier system, as it currently stands in Vermont, does not allow beer manufacturers to self distribute, something that small brewers can do in all of our neighboring states. Here in Vermont, we have to start another company. We had already formed two companies to operate the real estate separately from the brew pub, and now the distribution company would be the third. Needless to say, I am forever grateful that Matt can do accounting. Over 60% of states in the nation allow some form of self distribution for beer manufacturers, and all Vermont's neighboring states allow self distribution for brewers. I realize we, as a state, were late to the party and only getting later as time passed. The detriment to us as business owners was mounds of unnecessary paperwork and an additional $1,200 per year fee to the Vermont Department of Liquor Control to hold the wholesaler's license. We currently pay $1,200 per year to distribute under 100 barrels of beer annually, which you just learned a barrel is 31 gallons, so that's 3,100 gallons a year. The large Vermont distributors also pay $1,200 per year, pushing millions of barrels annually. So what so what does it take to sell your own beer in Vermont? Obviously, first, you must produce and package the product. Then the three tier system demands that we sell that product back to ourselves. Well, by ourselves, I mean our distribution company. That, by the way, can legally have no financial interest in the manufacturing company. That, by the way, shares the same owners and by default does have financial interest in the manufacturing company. Upon the sale of beer from the manufacturer to the distributor or from ourselves to ourselves, the beer must be moved to a separate legal legally designated area or removed from the brewery entirely. The beer can only be moved by owners or employees of the distribution company, usually forcing owners to do the delivering themselves unless they want to deal with payroll for a whole second or third company. This pass through company must be insured, has an entirely separate set of books and yearly tax filings costing us thousands of dollars per year to operate. All of this happens only after we actually secure the sales by convincing local retailers to put our product on the shelves. This system is an undue burden for small Vermont businesses that neighboring states don't face. I want to mention also that this bill will benefit all Vermont brewers and the entire Vermont craft beverage industry as a whole, including larger established distributors. Simplifying wholesale operations on behalf of Vermont craft beverage manufacturers will allow them to focus on their retail customers with more care and detail, offer a wider variety of products to those retailers if desired, and streamline invoicing and bookkeeping significant. Alcohol distributors have always grappled with how to deal with smaller local beverage brands, as they are less profitable when compared to national or large regional brands, and Jesse mentioned this. As also mentioned by Jesse, we have seen the closure of two Vermont beverage distribution companies that specifically had a focus on smaller local brands. And as of last week, it's three now. And Emma, mentioned that briefly in her testimony. This shocked the Vermont beer world and left plenty of breweries scrambling for quick solutions to continue to fill their wholesale accounts. The breweries that were left behind were essentially forced into undesirable contracts years earlier because they did not have the time and resources to start and run their own distribution company. Then those same contracts were dissolved upon the closures of these companies they were forced into working with in the first place, leaving many brewers in the dust. This type of system is totally unsustainable, and the majority of the country and all of our neighboring states realized this years ago. So I ask you as a constituent, a business owner, a regular guy, and most importantly, a Vermont brewer, please vote to pass age six seventy two because it's always better to be late to the party than to not show up at all. So thank you all for your time. We appreciate your dedication and service. It means a lot to Vermonters.

[Matthew Birong (Chair)]: Oh, thank you for the perspective too. I mean, I guess I said what I said in previous witness, so I don't need to reiterate myself or repeat myself. But no, we we definitely understand where you're coming from on this and are very open to continuing the conversation. Questions from the table or guests? No. Thank you. Alright. Thank you, guys. Alright. So that wraps up the conversation on June. So we have the draft language posted to our site. On this next piece we're gonna speak to, again, it just hasn't been introduced with the bill number yet, but we wanted to keep this conversation going today. So what I'll do is call a time out for twelve minutes till our next witness arrives, and counsel's also on the list. So we'll be able to do this more formally and effectively with those two people present. So take us off

[Jesse Cronin (Owner, Lucy and Howe Brewing Company, Jericho)]: to eleven.