Vermont Legislature SmartTranscripts:

[Sen. Alison Clarkson (Chair)]: We will start. We are live. Okay. Alright. Very live. Welcome everybody to Southern Economic Development Housing and General Affairs. We just had a terrific hearing on tourism and the impacts and needs of tourism. And we're gonna pivot to our liquor and lottery bill, f 09/21. And we are which we've had a walk through of and heard some initial testimony, but we welcome all of you. And today we are going to begin with Emma Arian, who's the executive director of the Vermont Brewers Association. So welcome Emma. And then Jesse, you're on deck. Oh, we have two experts of Vermont Brewers.

[Emma Arian (Executive Director, Vermont Brewers Association)]: Emma, welcome. Thank you all for having me. My name's Emma Arian, and I'm the executive director of the Vermont Brewers Association or the VDA. The VBA was founded in 1995 to promote and strengthen the culture of craft brewing in Vermont through marketing, education, and advocacy for Vermont made beer. We're a five zero one c six nonprofit trade association, and our vision is simple, to 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 and opened the state's first brewery. What's especially relevant for today's conversation is that before Gregg 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. That idea made its way through the liquor control board, multiple legislative committees, both chambers, and ultimately was signed by governor Madeleine Kuhnen. Today, every brewery in Vermont that offers a pint across the bar at their own facility was a huge debt to Greg Noonan and Bill Mahers for doing the hard and careful work of modernizing Vermont's Tide House or three tier laws to reflect how small breweries actually operate. I share that history, and section six of h nine two one 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 and our neighboring states. Today, the Vermont Brewers Association represents 58 member breweries, which is over 90% of the breweries in the state. In 2024, Vermont's craft brewing industry had an economic impact of 460,000,000, produced 353,000 barrels of beer, supported 2,800 jobs, and once again ranked number one in the nation per capita for both beer production and number of breweries. We're proud of that, but we're also concerned about where things are heading. Today, we're here to discuss section six of H nine twenty one, an act relating to alcoholic beverages. 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 the real problems are and where opportunities might exist. We 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 the executive directors of the brewers associations in both 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. This has been a completely 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 last month, Vermont Beverage Company announced its closure. That leaves two big players in the state, and I've submitted an article that was published from Brewbound outlining the struggles of the Vermont distribution landscape. 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 with 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 a year. 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. Section six of H 91 addresses that problem in a narrow and practical way by allowing breweries to self distribute up to 3,000 barrels annually under their existing manufacturer license. This is not about bypassing wholesalers long term. It's about creating an on ramp, 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 3,000 barrels would be a major operational lift for a small brewery. That number is a ceiling, not an expectation, and most breweries would 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. Both systems have not been undermined. Allowing Vermont small brewers to self distribute up to 3,000 barrels annually ensures that businesses are not placed at a competitive disadvantage in the region. At its core, section six h nine two one 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, careful updates to its alcohol laws to support small local producers. Section six of H nine twenty one continues that tradition. Thank you

[Sen. Alison Clarkson (Chair)]: for your time. I'd love to answer any questions. Absolutely, David.

[Sen. David Weeks (Clerk)]: So why the 3,000 barrel limit? You know, you support it. But with Maine at 30,000 barrels, New Hampshire at 15,000 barrels, why when do you advocate?

[Emma Arian (Executive Director, Vermont Brewers Association)]: We went to the house asking for 5,000 barrels, and we settled with 3,000 barrels.

[Sen. Thomas Chittenden (Member)]: Yeah. Similarly, I don't know what the concern is, why it got down to 3,000.

[Sen. David Weeks (Clerk)]: I'm fine with 5,000 or 15,000, but

[Unidentified committee/staff (brief interjections)]: I don't know

[Sen. Thomas Chittenden (Member)]: what the father's side of that.

[Sen. Alison Clarkson (Chair)]: Yeah. For the the question. What what what was the re what were the re well, we could ask the house, but what what was the concern?

[Emma Arian (Executive Director, Vermont Brewers Association)]: We heard from a lot of small breweries that aren't making a thousand barrels yet. Yeah. We also heard from the distributors that felt more comfortable with 3,000 barrels. Right. We're

[Sen. Alison Clarkson (Chair)]: So gonna hear from the distributors.

[Emma Arian (Executive Director, Vermont Brewers Association)]: So they're in support of this bill, but, like, the

[Sen. Alison Clarkson (Chair)]: 3,000 barrel number better. Right. And I believe one of the moves to more self distribution is that we have lost some of our wholesalers who did craft brewery distribution. And with those losses, I I know we still have two I think we have two really strong distributors that distribute a range of product. But my understanding is that we have also lost some distributors who did craft brewery distribution and that this is filling that gap.

[Emma Arian (Executive Director, Vermont Brewers Association)]: Yeah. We've lost three over the past two years. And I submitted an article that was published last week from Rebound, outlining that, and the struggles of out of sleepers too,

[Sen. Alison Clarkson (Chair)]: that don't have distribution in the month. Right, thank you.

[Sen. David Weeks (Clerk)]: So yes, read through the bill page five, we're at four. Yeah. This, this affects, all beverages and wine. And I know you represent the beer brew. But why why not cider? And I'm sure in your circle that you bump into the cider manufacturer. Why isn't cider in this world? Do you have

[Emma Arian (Executive Director, Vermont Brewers Association)]: any idea? Cider and wine can already self distribute in a different way. So Argo is just malt manufacturers in this.

[Sen. Alison Clarkson (Chair)]: Like David, there are different rules for every piece of this industry.

[Sen. David Weeks (Clerk)]: I get it, but I see that we've added wine, right? We had beer, added wine. Why is cider missing? I don't know

[Sen. Alison Clarkson (Chair)]: the answer to that question. Hannah, do you have the answer to that question? I do. CIDR is technically Introduce yourself. Sorry. Can't show up at the

[Hannah (Department of Liquor and Lottery staff)]: Liquor and Lottery. CIDR

[Sen. Alison Clarkson (Chair)]: is under Biden's contractors. They can do the direct ship permit.

[Sen. David Weeks (Clerk)]: Okay. So in the bill as as drafted,

[Hannah (Department of Liquor and Lottery staff)]: Any other questions for Emma? Right. How long have you been,

[Sen. Alison Clarkson (Chair)]: head of the Brewers Association?

[Emma Arian (Executive Director, Vermont Brewers Association)]: Three years, but I've worked here for four years, and then I interned for a semester when I was in college. Okay. You're

[Sen. Alison Clarkson (Chair)]: back. Mhmm. Oh, that's terrific. Well, thank you very much for your testimony. Thank you. I think we'll follow suit with Jesse Cronin. Jesse, are you joining us?

[Unidentified committee/staff (brief interjections)]: Oh, you're right here.

[Sen. Alison Clarkson (Chair)]: Hi, welcome.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: My name is Jesse Cronin. I own and operate a listing of our brewing company in Jericho, Vermont. I'm here today to express my strong support for H nine twenty one, specifically section six, which will allow operators to distribute up to 3,000 barrels of malt beverage annually to their local bars, restaurants, and stores. I'm gonna truncate my testimony somewhat. There's a lot of biographical information, which, while fascinating, probably, we could take a brush over that for a

[Sen. Alison Clarkson (Chair)]: while Well, how long have you been a brewer?

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Well, there's there's my story's not uncommon. I've been brewing for about ten years, and I'm part of the Magic Hat pipeline, so I'm one of the brewers that I was working there for a long time, worked my way up from packaging into production and into the brewhouse. When I left, I was the brewer in charge of fermentation and malt production, which sounds very fancy. And then suddenly you find yourself in your driveway loading stainless steel tanks into your barn under the skeptical view of your wife, so that's sort of the path. That's the one I took. So that has, some of that information is included. Opened in May 2020,

[Unidentified committee/staff (brief interjections)]: which

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: was a hoot. Then in 2022, late, we, in partnership with a good friend of ours who own a Cold Brew Coffee Company, Brewhouse Cold Brew Coffee, purchased the old Jericho General store on Route 15 in Jericho, right around the corner from Joe's. And from day one, our goal was twofold. It was quality and community. Those were the two things that we were trying to form. And I think over the past three, four years, we've been very successful with that. People can come in, they can get a delicious cup of coffee and a breakfast sandwich in the morning and chat, and in the afternoon they can come in and they can get a delicious pint and pretzel or a sandwich and some house made mustard and they can chat. And I think we've been successful in making that sort of third space for families in the Jericho area.

[Sen. Thomas Chittenden (Member)]: One thing

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: I want to emphasize, and I spent some time talking about that, in the testimony, is that we at Lucene operate are very small. We're one of the five, ten smallest breweries in state. If you've got my testimony in front of there's a couple of pictures, Steve. One of them is a picture of me in front of one day's packaging, and the other picture is also of me inserted for scale at a day's worth of packaging down at zero gravity. They were nice enough to send me the picture. I make about, it's about 90 gallons of what I could put out. It's about 30 paces, and down at Zero Gravity, they need packaging in the same amount of time, which sort of breaks my heart, they can do 12,000 paces. As far as scale goes, I'm far out based. But that's my choice. That's just what we decided to do. It's important in this case because distribution to a certain extent is a volume game. Yeah. The margins on it are a little ridiculous. There's another sort of graph I have at the end that shows the breakdown where the money goes when I sell a case out of our storefront versus when a case is sold out of a retailer. When it's sold through a retailer, because it goes from me to a distributor, distributor to a retailer, retailer to consumer, and at each section, know, money everybody needs to eat, I clear, like, a 7% profit on something like that, and that's a combination of sort of industry standard. And first of all, that graph is specific to my experiences. I can't speak for other breweries, But I wanted to give an idea of how thin those margins are per case sales, especially through distribution. And when you're in a position like I'm in, where you're doing 30 cases a week and only five of those are available for distribution, to go through that process, it's basically an advertising budget at that point. So it doesn't make any money from me. It's not an effective use of my time, of the distributor's time, and it's it's not the best way to get beer to market.

[Sen. Alison Clarkson (Chair)]: So the cost, though, there is additional cost to self distribute. So this In terms of, you know, ban and time. Sure. Absolutely. I mean, are you considering And so the percent of your revenue to distribution, have you Where I mean, because I see you have the 7.3%. You obviously are gonna have to invest some in self distributing, must do pool together and do cooperative distributing.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Right, which is not, it's not part of the bill. I don't don't forgive us. Mean, couldn't you work together to distribute them? I think that's a separate question that, because it's all sort of attached to the manufacturing license, and under manufacturing license, currently, you can't distribute it Under the new bill, you can distribute the whole meat in your home Right. Good, as far as I know. But what I'm outlining is sort of the struggle to get a small producer to market your distribution pipeline, because you're correct that even if I were to sell and distribute, there are costs that are associated with that. Time is not insignificant. Sales, transportation, all of those things, which I'm willing to take on, but not under the current legislation, not under the way laws are kind of set up now, because there is a $1,200 a year license that I would need to purchase, because there's a separate business that I would need to make, because the way the law is structured, I'd need to take my beer for Lucy Brown Brewing and sell it to Lucy Brown distribution and sell it to retailers and everything has to be on invoice. It's just an arduous process as it stands now. While there are increased profits per case through that route, it's not enough to really make it worthwhile for me. So I encourage the passage of this legislation just because that removes a lot of those roadblocks. Because now instead of having to do that sort of funky pipe in it, if there's a store, you know, if there's a local bar that would love to have my beer on tap, they're right around the corner, I can now, they can call me directly under the new electric station, and I can sell them a keg, and I've been running over, and forty five minutes later, 40 grams. That sets up, it's just a much smoother pathway, and financially it makes much more sense for me as a small producer and for that retailer. Like Emma was saying, this really only works at sort of smaller scale. Once you get to a certain point, and I'm not 100% sure where

[Sen. Alison Clarkson (Chair)]: that point would be, but

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: that sort of where that 3,000 barrels sort of came from. I can't do that anymore, and I need to move on to another organization, a distributor that has that infrastructure in place and can do that much more effectively. Because if it's my five cases a week, which is currently what I have sort of extra capacity as far as what I brew and can be sold to other retailers or buyers or restaurants, that's very manageable for me. If and when I get bigger, and that's 15 cases, 20 cases, 40 cases a week, that becomes a whole separate job. I don't have room for that right now. My family would be very upset. No garage left. No garage left at all.

[Sen. Alison Clarkson (Chair)]: Doesn't sound like you went to a garage

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: No, at No. It's a little. Yeah. It's a little. But it's so it's like the from from where from my standpoint as a smaller producer, those are sort of the main emphasis pieces to support a decision. What do

[Sen. Alison Clarkson (Chair)]: you see your revenue growing by with the availability of Southeast District? So,

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: projected, it's, I'm sort of on that five pays a week number. I sell majority of my beer out through our tap room. So we have the tap room that has the first class license, can do pints, that has the fourth class license, we can treat

[Sen. Alison Clarkson (Chair)]: They don't have the store,

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: this is great. This is the store, this is the tap room. Have the manufacturing license. So all of that is in house. From there, so most of my beer goes through, and that makes most financial sense for me to sell most of my beer through there. And I can protect it, I can ensure quality, I can have conversations direct with consumers, like that's the best. I don't have a ton of extra capacity, but it sort sits that five, ten cases a week, depending on season. So, you know, it's worth it to me to try and set up a relationship with a couple of retailers where those 10 cases go out, and I can clear an extra report about her at all. For me, a big deal. That's like a full other day of

[Sen. Alison Clarkson (Chair)]: So it has a significant revenue and inventory. But

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: yeah, it has a significant impact on me. And I wanted to, that's why I keep sort of stressing the size, because of the size that I am and because of the pressures, downward pressures on that sort of revenue, sort of outsized, you know, or someone of my size, and that increase, while not overly significant at the scale of some breweries, let's say, would mean a lot to. Right. Right. Is, yeah, that is generally it. So I would encourage you to adjust the system and allow our breweries distribution paths that better suit small sizes while accommodating some flexibility. Allowing us to distribute up to 3,000 barrels a year as part of a manufacturing license greatly simplified the system where breweries use in a limited amount of beer to market and in front of customers. Allow our breweries to deepen and strengthen relationships with our retail partners, some of whom are struggling to meet distributor order minimums or struggling to stock a variety of product. Direct access to market would create the opportunity for small brewers to grow their brands, ideally to the point where they'd be attractive to one of the larger distributors, and provide small businesses with another avenue to increase cash flow so we can remain in business. And it brings us to parity with pay that in terms of paying subsidies.

[Sen. Alison Clarkson (Chair)]: Had time to attention. Well, thank you for coming in, Georgie. I appreciate the time and effort it takes for all of you to come out right now. Any questions for Jesse? Great. I want to come and see your general store. Oh, you guys

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: are all in one welcome, please. Yeah. Sounds good. Copy, Jenner, episode of three.

[Sen. Alison Clarkson (Chair)]: Are you also the male? Are you also the post artist?

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: No, so that's the Jericho Center store, which is a Jericho is really bizarre. Has like five pound centers, which is a little strange. So we are Hamlets. Yeah, we're human. I like the Hamlet. It's not very human.

[Sen. Alison Clarkson (Chair)]: They're Hamlets. It's called The Woodside. Yeah, that was great.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Yeah, so there's the town center, which has Jericho Center somewhere. We're off of 15, which is like the best district, I guess. So, it's nice. See, you can park at the Red Mill, do a hike, get dressed if you want food, come and get a beer, get treat going, get some chocolate chocolates, get a greenie. I think we've had a business. All the the Yeah, plenty of knowledge, all the options. Great.

[Sen. Alison Clarkson (Chair)]: You so much. Of course, thank you. Darren, I see you have joined us on screen, welcome. It's good to have you, we're hearing all the brewers clearly in a row, boom, boom. Welcome.

[Sen. Thomas Chittenden (Member)]: Muted, can't hear you.

[Sen. Alison Clarkson (Chair)]: You are muted, and Kara, if we could make him full screen that would

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: be great.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: Oh, there we go. Okay, is that better?

[Sen. Alison Clarkson (Chair)]: Yikes, we haven't had anything. Oh, Oh boy there.

[Sen. Thomas Chittenden (Member)]: You just saw your figure really large.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: Oh, can see myself on your screen now.

[Sen. Alison Clarkson (Chair)]: Which is great. Welcome.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: Hi. Thank you.

[Sen. Alison Clarkson (Chair)]: Introduce yourself and tell us what's awesome on this build.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: I'm Darren Orr. I'm the co owner at Two Heroes Brewery and Public House in South Hero, and obviously here to talk about section six of H921. And like Jesse, I can kind of shorten this up a little bit, allow some more time for questions. But we started our brew pub in the Lake Champlain Islands in South Yarrow in Grand Isle County. And I started with my business partner, Matt Bartle. He runs the kitchen. I run the beer side. We started in the 2021. So, right smack dab in the middle of COVID. We were in a tiny little rental space because we couldn't get financing during COVID as you

[Rick Segal (Office of Legislative Counsel)]: can

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: imagine. So the plan from the beginning was to build a building and get into a larger new building And we were eventually able to get financing, and we moved into that new building in the 2023. So the building process during COVID took an amazing amount of problem solving, persistence, rules, regulations, all that good stuff. And at the time, we were like, nothing could be harder than this. Right? Little did we know until we started self distributing. So as Emma mentioned, under the current three tier system, on title seven, the liquor laws, breweries can't deliver their own product to market. We have to start a second company unless we wanna sign with an existing distributor. So by that time, Matt and I had already formed two companies because we owned the real estate for the brew pub and we owned the brew pub. So the real estate encompassed one company, and the brew pub encompassed another company, and we started a third company to distribute the beer. Gotcha. So we're at this point, we're now running three companies, doing the books for three companies. Luckily, only one company has payroll. So that saves a little bit. And as Emma mentioned, the distribution licensing is around $1,200 a year. So we were paying $1,200 a year for our wholesale license. Well, still are paying, should say, because we we still self distribute with our own distribution company. And we distribute under a 100 barrels a year. So companies like Baker and Farrell are distributing millions of barrels of product a year, and they're paying that same $1,200. So that was kind of like, in the beginning a red flag for us like this this isn't really fair. So obviously there's other there's other things involved here where you have this separate company that is not allowed to be tied to your brewery legally, even though that company is being run by the same owners as the brewing company. So it can get complicated when you're delivering beer. My distribution company doesn't have any employees because I don't have the payroll capacity or the time to have employees that are solely employed by the distribution company. So if one of my brewery employees was to deliver that beer, that would be against the law. So myself and my partner Matt have to be the ones delivering the beer. If we want to move money from the distribution company to the brewery, which obviously we occasionally have to because the profit from the distribution company has to go back to the brewery because we need it at the brewery to run the brewery. If we want to do that, we have to write a check to ourselves, deposit it into our personal bank account, withdraw it from our personal bank account, and then make an investment in the brewery. So there's a whole lot of details like that that we were just finding extremely unnecessary. If we were able to directly invoice our wholesale customers through the brewery, we wouldn't have to do any of that. Far less paperwork than we were experiencing. So and then you have Emma mentioned this. The distribution company needs insurance. You have to do the books. You have to do the taxes. You have to do the reporting. So amazing amount of paperwork. It's it's essentially double the paperwork to self distribute. So the reason that we didn't sign with a distributor, and I think some of this has has been mentioned a little bit, is that just like Jesse, just like Lucy and Howe, Two Heroes is is very small. We're probably a little bit bigger than Lucy and Howe, but not by not much. So when you hand your beer off to a distributor, they need 20 to 30% in order to do the work that they have to do, and we just couldn't afford that. And we also felt, as many small breweries do, that when you're this drop in their portfolio, they're not going to be able to give you a lot of marketing and a lot of sales representation because they're focused on their big brands. Know, Farrell's focus is Budweiser because that's what they sell the most of. It makes sense. So, if you're a drop in the bucket, you're not getting a lot of exposure from them. Being a Vermont brewery helps because you're local. But otherwise, it's it's really hard for them to focus on the small guys because they're not moneymakers for them. So and I will say that if small breweries feel that they're misrepresented by large distributors, it is not the fault of those largest distributors. I mean, they're just delivering the beer. They're doing their jobs. The market now is rapidly shifting, and the work that the large distributors do is getting harder every day. They have taken on so many brands that they just don't have the time to put towards tiny little brands that aren't profitable for them. So it's not their fault, it's just this is what is happening in the market. And like we talked about with the closure of three distributors recently and those distributors were specifically giving more time to smaller brewers. So, what we have left is is, you know, the largest two. Which makes the situation even harder. So we just feel that because of all of this and the timing and the shifting markets, this is really the time to get this bill done. So the current system as it stands, which we've been dealing with since we started, it isn't really sustainable. It doesn't really reflect what's working in the majority of the country, and all of our neighboring states have have passed bills like this already to help small brewers. Breweries here in Vermont play a huge role, and we drive tourism. We support agriculture. We support our local communities just in our pub. I mean, we're, like, the place to go and hang out and see live music, meet with your friends, meet up if you're driving to Plattsburgh. It's a midpoint. So we've kind of built that reputation.

[Sen. Alison Clarkson (Chair)]: That's a that that yeah. No. I it's where we can meet Mitzi.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: Yeah. Right?

[Sen. Alison Clarkson (Chair)]: Yeah. The alumni club.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: Yeah.

[Sen. Alison Clarkson (Chair)]: Meet up there. Thank you, Darren. Anything else? We appreciate all of you sending in your testimony. Really terrific. It will all get posted. We also got some testimony from another brewer at Cousins Brewing, which we got last night. So, any questions for Darren? Great. Thank you. And did you

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: take Yeah, thank you.

[Sen. Alison Clarkson (Chair)]: Your testimony probably tells us how much you distribute on how many extra Yeah.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: We it does say in there, we only distribute around a 100 barrels a year, which is is pretty small.

[Sen. Alison Clarkson (Chair)]: Right. Great. Terrific. Okay. Great. Thank you very much. David Cack. We are going to welcome David from the Vermont Grape and Wine Council.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Good morning. Can you hear me okay?

[Sen. Alison Clarkson (Chair)]: It's good to see you again, David. Yes.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Can Likewise.

[Sen. Alison Clarkson (Chair)]: Hear you.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Thank you so much for having me on, and I apologize for doing this remotely. It's a very busy time in the vineyards, as I'm sure you can all appreciate. For those I've not met in person, I'm David Keck. I own and operate Stella fourteen Wines in Cambridge, Vermont. And also the legislative liaison for the Vermont Grape and Wine Council. Also, and I've actually not really mentioned this in the past, but I think it's pertinent to some of the discussion today. I, in 2016, received my diploma as a master's sommelier, which in the context of this conversation, a large part of that certification is studying and understanding national and international wine and alcohol laws as they pertain to basically every aspect of the industry. That's a bit

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: of my history.

[Sen. Alison Clarkson (Chair)]: You were going to give us a pitch for our culinary institute, reestablishing the culinary institute.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: I would be more than happy to discuss that as well. So the section of this bill that is of importance, I would say, to the grape growers and to the Vermont Grape and Wine Council is really section two, well, two sections, guess. Section two and then page five. So discussing kind of the something that we worked on together in 2023. The great irony of working on changing the poor levels for tasting rooms was that we lost 90% of our production in 2023 to the frost in May. So we ended up closing our tasting room, but this legislation is still super important to our industry and to supporting the grape growers in the state. So the and the verbiage that we came up with in 2023 has returned to this omnibus bill, which is increasing the number of ounces and the way in which those ounces of malt, venice and spirit can be poured in a fourth class tasting room. For us, a huge part of this had to do with the fact we couldn't receive a first class license being a tasting room in the town of Jeffersonville, but not at our manufacturing facility and not in a facility that could receive a full health license and restaurant permit essentially. So being in a rural location as most grape growers in this state are, a huge part of our business comes from the local community. Obviously, we all thrive and today is an important day for the tourism industry in the capital and that whole discussion. We benefit tremendously from tourism and from people coming into the tasting room to taste our wines. But a lot of our sustaining business and a lot of the sustaining business for any small industry in Vermont is from the local community. And so once they've been in and tasted our product until we have new products to offer a huge amount of their return business has to do with the ability to come in and develop community and enjoy a glass of wine as opposed to a flight of samples. We've talked about this in the past. I know that it's been discussed quite extensively, so I'll sort of leave that at that. I know that Deirdre also submitted testimony, written testimony. Given

[Sen. Alison Clarkson (Chair)]: us terrific testimony, yeah.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Which I agree, obviously. We discussed sort of all of those points together, I think we're all in agreement on those, but happy to take further questions about that, about the numbers that we came up with, and those numbers were discussed both in this committee and with the Department of Liquor and Lottery in 2023. And I think it got sort of held up in the house, but this is now past the house. So hopefully we can continue moving this down the road at this point.

[Sen. Alison Clarkson (Chair)]: We are hopeful for the same. I'm just trying to be reminded of the section, I think over section two?

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Correct. It is section two, which on is page two in the bill that I have here.

[Sen. Alison Clarkson (Chair)]: It begins on page one, but, yes, it's it's right. Serving another license limits. I just for everybody outside of the room and in the room, we just need to know where we are in the bill.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Absolutely. So I think section two number one a for down at section b and then small I.

[Sen. Alison Clarkson (Chair)]: Yeah. Do we call those? Ronette one, two,

[Unidentified committee/staff (brief interjections)]: and three. Yeah. Perfect.

[Sen. Alison Clarkson (Chair)]: Our great Tucker Anderson, who is our legislative counsel on all things, minus malt and spiritists.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Amazing.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: So

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: before moving into the next session, are there any questions about that with the committee?

[Sen. Alison Clarkson (Chair)]: I mean, as you pointed out, we have discussed this before, it's good to have you back on a regular basis. And good to move forward on this, I think. I'm supportive of this section, and I don't have any questions, but my committee members, anybody else have a question about this section group. I think we're We're good to go. Excellent.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Great.

[Sen. Alison Clarkson (Chair)]: And Beersha's testimony is is also very, very strong. She's our

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: our She's a

[Sen. Alison Clarkson (Chair)]: She's a force of she's a force of minus energy.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: She is a

[Sen. Alison Clarkson (Chair)]: she is a champion. She's one of our great writers on the whole wine industry here in in Vermont and has received accolades for all the books she writes and articles, and she's she's just a huge advocate for our wine industry.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: She is currently, I believe in the process of finishing her next book. You'll pardon her absence today as well. The second section that we'd love to bring to your attention is section six. And then article two, which is really has to do with parity with Venice producers. It just reads a licensed manufacturer of malt beverages or Venice beverages may operate up to two licensed establishments. And this has to do with the first class license, which is allowed at a manufacturing facility. And actually this to give an example, Deirdre is in a perfect situation to be an example for why this is important as she has two tasting rooms, one at their manufacturing facility in Barnard and then another in West Addison. And they are only able to have one first class license, which allows them to do full tastings and dinners and all of the amazing hospitality that they contribute to the community. But they're only able to do those in one location. So this really is about creating parity with the malt producers in this section of the legislation as it exists. And as I said, Deirdre's testimony, I think speaks to this very clearly. I'd be happy to answer any further questions, but I think the rationale behind it is fairly clear.

[Sen. Alison Clarkson (Chair)]: Yeah, I would agree. Perfect.

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: Great. You so much for taking the time. As I said, happy to answer any questions on either of these sections and provide further testimony. But I think in the interest of time and moving this along, I will pass it on to the next speaker.

[Sen. Alison Clarkson (Chair)]: Great.

[Darren Orr (Co-owner, Two Heroes Brewery & Public House, South Hero)]: Thank you.

[Sen. Alison Clarkson (Chair)]: David, I don't know if Jen Jen's having some family challenges this morning. I don't know if Jen is They're not here right now, so she's just It's been a Okay. So Jen Jennifer Kimmett was going to join us. As you know, she's the there she is. Right on. Right on. Very well coordinated. Have to say, I have a great assistant here. Good time. Good time. Director. She Jen's not able to join us. She had some family health issues she's having with her too. Well, I'm happy to be here. So, Wendy, if you would be kind enough. And maybe Ryan, if we have some time,

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: we can hear the freeze with Ryan, but I

[Sen. Alison Clarkson (Chair)]: think we're scheduled due next week. Is that right?

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: Whenever you'd like, your honor.

[Sen. Alison Clarkson (Chair)]: Yeah. Yeah. I haven't reached out yet. We have a plan. That is the plan. But if we have time today, we have to

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: I brought it just in case.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: I brought it since you got Welcome, Wendy Knight. Welcome, Commissioner. Wendy Knight, Commissioner of the Department of Liquor and Lottery. Nice to see you all again. I will be brief. You've heard from a lot of the stakeholders. I think of this as an economic development bill. This is probably a decade in the making, so it's a good that it's in the Senate Economic Development Committee because that's really what this bill is looking to do. It's creating some parity across the alcohol beverage sectors. Some of that historical legacy is because decades ago in Vermont, we didn't have a thriving wine industry. We didn't have a thriving cider industry or spirits industry. And so, the laws were written specifically to support the craft beverage, the craft brewers, and it was really to support the craft brewers against the big beer companies. Right? We were trying to create a thriving craft beverage, craft craft brewing industry here.

[Sen. Alison Clarkson (Chair)]: We have been very successful. Yes.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Yes. And

[Sen. Alison Clarkson (Chair)]: so Just as we all are so down on everything, we love to accelerate We've done a great

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: job historically. And then what we are responding to in this bill is the market conditions. You've heard about the consolidation in the wholesale tier, which is creating a lot of problems for our small manufacturers, and also now we have a thriving craft spirits industry, and winery and cider makers and even low alcohol RTDs, right? So the first thing we see with this is that it's creating some needed parity, and you see that in the different provisions. The other thing it's doing is that it's expanding market access. So we've heard a lot about Tide House. Tide House is basically to prevent the financial controls along the sectors, which is wholesale, manufacturers wholesale, and retail. Over the bill doesn't really deal with Nope.

[Sen. Alison Clarkson (Chair)]: Trade cuts. No.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Well, it it's basically people the fourth class license is an intentional decision that the General Assembly has made in concert with the department over years to allow manufacturers to have a fourth class license, for example. To just clarify with a fourth class license in this bill is, right now, we have twenty fourth class licenses.

[Sen. Alison Clarkson (Chair)]: Just remind us, because remember, we don't live in this space all Fourth the class licenses.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Is allowed for a Vermont manufacturer. So a Vermont manufacturer, whether you're cider, know, beer, wine, spirits, you're allowed to have 20, that's twenty, seventy, fourth class licenses. And those are tasting rooms and farmer's market permits. And the reason is we're getting our small manufacturers access to consumers. You're allowing them to sell their product. You're allowing them to have samples of them with tourists and Vermonters alike. So that already exists. What this bill is trying to say, well let me clarify the numbers. So we have twenty fourth class licenses allowed. Only one of them you are allowed to sell and serve products other than your own. Okay, only one. And at that only one, you are only allowed to serve five other products. So there's no rhyme or reason, there's no public safety reason why there's only one and only five. So in the discussions we've had since the fall, well, I would say that some of these discussions predate, you know, they're maybe four or five years ago. The idea is they would like more access, right? Would like to sell their products and have more availability, people to experience it and have that brand experience. So this bill calls for an expansion, not just one tasting room where you can have products other than your own, but 10. And the number of products that you're allowed to have can be unlimited except for spirits because we're a control state. So that's the idea behind expanding the Orthodox crisis. You've heard from the brewers talk about self distribution. I would argue that you do not have a sunset. I think that is going to make it very complicated for the brewers right now. The only option if they wanna self distribute, you've heard that, they must purchase a wholesale dealer's license. They have to purchase a wholesale license. Just like Faker and Farrell have to purchase a wholesale license. The brewers, if they want to self distribute, buy a $1,200 wholesale license. So if we're going to allow them to self distribute, which I think makes sense, You all seem to think that makes sense. To put it for a two year sunset, what's gonna happen from a business perspective is those licenses get renewed in April, so they're in the process of renewing them right now. Let's say this bill gets passed in July, the department will work on arrangement to obviously prorate those licenses. But then you're going to require two years from now, then to then potentially renew their wholesale license. If you're not going it's not guaranteed that you're gonna sunset it, then they have no choice but to get a new license, which is usually in April, while you're deciding whether to sunset it. I think it creates an administrative burden that's pretty unnecessary. I don't understand that there's a there's not, from our perspective, a public safety reason why you would need to sunset it. So that was the only So that and it's cost

[Sen. Alison Clarkson (Chair)]: reading the language is so slightly complicated too. Be this yeah. So section set so it's I'm not it's it's just section seven, nine, and 10 that are Yeah. I I noticed there was

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: a sunset date. I thought there was a sunset date.

[Sen. Alison Clarkson (Chair)]: I know you all talked about it. I think it was it's brought up in committee. It was. And I'm and I I would be great tricks not with us. I don't see.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: So I think

[Sen. Alison Clarkson (Chair)]: it it's it's just sort of I'm not clear on it. I I don't think Well, that's why

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: I thought we'd let the council to clean this up. Right? Yeah.

[Sen. Alison Clarkson (Chair)]: So you would argue that we have no sunsets on the on the special venue serving No. That's not that special. But that's also involved in I'm talking about the self distribution. The sec section six. But section six doesn't

[Sen. Thomas Chittenden (Member)]: I don't see an actual

[Hannah (Department of Liquor and Lottery staff)]: I don't see a Okay.

[Sen. Alison Clarkson (Chair)]: Great. Sunsets it. Sunsets Yeah. Yeah. It sunsets section six. Okay. Got it. So section seven is the one because it does have a sunset of '28.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Yeah. That's me. That that dates. Yeah.

[Sen. Alison Clarkson (Chair)]: Yes. No. I I see it, but the a is more complicated than false nine and ten. So so that

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: that's my suggestion is that you not create a sunset. The other Was there a reason that the house put sunset in?

[Emma Arian (Executive Director, Vermont Brewers Association)]: That's good governance, I believe, is there

[Sen. Alison Clarkson (Chair)]: a question?

[Sen. Thomas Chittenden (Member)]: Great work for us

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: in the future.

[Sen. Alison Clarkson (Chair)]: We can also I mean, if you give us a report every year, you annually update us on how

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: things are going. Yes. Do. I I just think it's unnecessary. It creates an unnecessary administrative burden on the part of the brewers and frankly us, although that's fine. We're with happy to issue license, we get questions and it doesn't make sense

[Sen. Alison Clarkson (Chair)]: from our perspective. There's no

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: public safety reason why you would sunset it. The other thing that occurred to me this morning as I was driving in is if we're talking about parity, We've forgotten that we have a new, alcohol beverage sector, and that's their flow and flow AGV, the ready to drink spirits beverage, and that's not included in the self distribution. So we might want to consider that if you're allowed buying us inside or already have the ability to to self distribute, now we're saying that brewers should have it. Totally agree with that. But we're leaving out the newest sector.

[Sen. Alison Clarkson (Chair)]: But it's ready to drink involves spirits.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: I would rather No. It's not. It's it's a whole separate category, Alison. Right? But it doesn't fall. It that's fine. I'm just raising it as a parody issue. It's separate category. It's low ABV, the same ABV. Remember my little show and tell, the can of cider, the wine, the beer, the low alcohol ABV?

[Sen. Alison Clarkson (Chair)]: So where the parity is in the ABV?

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Correct. They're the same ABV, and that's why we're allowing them to be distributed in the private sector. All I'm saying is if we weren't really wanting parity, we've forgotten about that other sector.

[Sen. Alison Clarkson (Chair)]: And did they discuss that in us?

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: No. Just occurred to me as I was driving. No one's raised it. Yeah, no one's

[Sen. Alison Clarkson (Chair)]: raised it. I'm just curious, probably from a distributor's point of view, given that that's such a growth industry, some of large distributors will, we will hear.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Yeah, I mean, have limits. So anyway, that's kind of summarizing my testimony. Do you have any questions? Perhaps, I mean,

[Sen. Alison Clarkson (Chair)]: I know Jan has raised these issues. Can you help us address the alchemist

[David Keck (Stella 14 Wines; Legislative Liaison, Vermont Grape & Wine Council; Master Sommelier)]: concern? I

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: don't have I don't have a concern with. Okay. I did follow-up with, you know, the Tide House. I know Tide

[Sen. Alison Clarkson (Chair)]: House has raised a lot, and that's sort of

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: what I'm getting to is that there are no Tide House concerns from the department's perspective in this bill. The legislature over the years has made exceptions to manufacturer license, retail, So manufacturers, suppliers are currently allowed to have a retail. They're allowed to have a person third class. Brewers have those exceptions in terms of person third class. Part of

[Sen. Alison Clarkson (Chair)]: that is giving parity for the wine and the egg rights. No. I think this bill is a parity bill. Anything else? Any questions for Wendy? Right. Great. Thank you.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: It's a pleasure to

[Sen. Alison Clarkson (Chair)]: be here. Thank well, it's always good to have you here. We have seven minutes. Would Ryan, would you

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: like to speak? I have I have written testimony that I was prepared for for you for next week. I have it with me. I I probably couldn't rip it through in seven minutes, but I'm happy to answer any questions from the wholesale side, and I'm also happy to come back and

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: and go through all that. That's my point.

[Sen. Thomas Chittenden (Member)]: I'm ready to move this bill out of committee. So if you got anything important to say before that happens

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: I could do my best in seven minutes, and you can cut

[Sen. Alison Clarkson (Chair)]: me off. Join us. Okay. And I think we have

[Sen. Thomas Chittenden (Member)]: That's just me.

[Sen. Alison Clarkson (Chair)]: No. I'm I'm I I think that there's a strong support.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: I think that I'll get a good work, and I

[Sen. Alison Clarkson (Chair)]: think the only thing we would discuss is the volumes, but I don't think that We have we have bankers. Come try us. Sorry,

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: Clarkson, you were in the area when I started my career at Longfield Brewing Company, the founder Sarraf. You were You began as a brewer, and now you're just Well, not not I am not a brewer. That's a brewer. That's good. I managed to suck you next, but I'm a 14 sergeant. So I was prepared to speak to the three tier system in general, which I can do that here if you find me to.

[Sen. Alison Clarkson (Chair)]: Yeah. And I also encourage you to speak to section six and and the three tier.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: That'd be great. Objection. So if have any major concerns with this, that's why I'm gonna look at your No. I'm here in full support for for my friend, Emma, who testified today. I'm full support of everything that came in. Introduce yourself. Thank you for the guest. Oh, my name is Ryan Chittenden. I work at Ferrell Distributing, a member of the Vermont Wholesale Beverage Association. It's obviously an honor to be with you. I started in this industry back in college. I have twenty five years of experience, mostly in leadership roles across breweries and wholesalers. I worked throughout the system and hold great respect for all parties. And I also taught two courses at UEN's business program with wholesale management and annual business planning for small breweries. I don't know you're gonna buy a product. So Farrell's an independent beer sugar licensed by both federal and state governments to move bottles, cans, cases, and kettings for brewers and imports to shelves, stores, and restaurants, neighborhood bars in a safe, transparent, and accountable system, which is really what the three tier system delivers. We're also a little unique. We also have a full wine portfolio. We also sell a lot of nonalcohol beverages such as sodas and teas, kombuchas, sorts of stuff, everything like that. There are 3,000 of us across the country. I'm actually heading to DC next week to join all of them for the MPWA legislative conference. We're gonna get to go and break our federal delegation on what we're doing here locally. Retail system is what that is. Suppliers, which is breweries, distilleries, wineries, distributors like us on Baker, wine merchants, and there's retailers. Of course, I've got a great retailer right behind here. So independent beer distributors do more than just buy, store, sell, deliver beer. The gentleman's testimony earlier talked about how that's what we just do. We don't just provide this service, a very true partner to our breweries and to our retailers. We are small business owners. We're civic leaders, parents. We're happy with our communities. The system ensures traceability. If there's ever a suspected problem to the product, distributors could quickly touch the app and pull that product, on the market if there's ever a recall, and that does happen. It also certainly protects American consumers, throughout the, throughout the state. General adherence to regulation, sanitation, and safety protocols critical that our system enforces, and the result is a broad selection of genuine consumer choice. We are we are not in a soda business. If you go to Hanovert and Shaw's or Price Chopper, you see the soda aisle, it's just racked with two different brands. Right? If you go to the alcohol section, there's more choices than you can possibly imagine. That's what the three tier system does. It provides the vast majority of choices. Apparel and Distributing was the first wholesaler licensed after prohibition, so we've been around for a little while. We are a fourth generation Vermont business, quality service in the community. We had two ninety employees on payroll this morning because I checked, and it spans all skilled role roles from vehicle maintenance, delivery drivers, to positions with less formal certification requirements, like folks that merchandise, folks that build pallets and put them on trucks. We regularly offer training opportunities to upscale our employees with over a 100 certified system around certifications, which means that our team is very smart to be able to go out and speak to the breweries in the industry that we that we represent. In house sign making, temperature controlled warehouses, we have a 90,000 square foot temperature controlled warehouse in Burlington alone. Daily fleet maintenance, over 70 trucks that we have to maintain, certainly increasingly costly data and cybersecurity, which has now come into the realm of which we have to manage. 2016, we completed a major renovation in South Burlington, adding about 30,000 square feet. And in Rutland, recently, we won won an award from efficiency Vermont, recognize our efforts with a new HVAC system, which has no coolants, all c o two. And we didn't have to turn our peat on in our warehouse until Thanksgiving, which was great gold from the rate by gate. We are deeply embedded in Vermont's independence during the pandemic. We worked with war partners to dispose of 7,000 kegs of beer that were no longer sellable when all the restaurants shut out. We worked with Aqua Vitae. Oh, I'm so sorry about that. I reckon it a

[Sen. David Weeks (Clerk)]: big party.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: It was a big party, but we turned it into a hand sanitizer. And in any other world, I would've gotten fired for having to dump a quarter million dollars of beer, and then I bought all of it back through through a hand sanitizer program that we had donated back under the state house, actually.

[Sen. Alison Clarkson (Chair)]: Right. But we still have bottles of

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: Bar Yes. Was our part in Bar Gel too. Yeah. Well, it still works.

[Sen. Alison Clarkson (Chair)]: We still have it.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: And it's

[Sen. Alison Clarkson (Chair)]: still people use it all the time.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: One of the gentlemen talked about some of the bigger brands that we represent. I just I wanna also I think it's important to say that our bigger brands that we represent provide a lot of meaningful representation in Vermont. Mentioned Budweiser. We are a proud Budweiser house. And Andrew Bush has invested hundreds of thousands of dollars in local to support and hit the local initiatives. We have winers that are sponsoring the growing deep sea beverage aspects, we have folks that have supported the local cancer center here. Big brands provide a lot of really good resources for us to get behind. We operate in a challenging market. 2025 was a really challenging year for us and for and for the folks sitting to my right and on the screen here across all three tiers. Population demographics, housing shortages, sector alliance, tourism sector all all contributed. And and some just different ways in which consumers engage with alcohol, which is which is changing, and that's okay. The cost to manage, hundreds of employees, two large warehouses, massive levels of perishable inventory, insurance, rising health care, and a large row fleet with margins that are also compressed on our end. You talk about 30% margins. To be quite honest, it's the same margin that it's been for thirty years, and it's challenging to operate all the different types of things that we have to do on the same margin too. So I totally hear what what what Jesse said and what our folks are are talking about. It's a very part of market advantage, and that's why the flexibility that they're asking for should should should and Vermont has a significantly higher local crappier market share than most states. You mentioned we should be celebrating that. We absolutely should be celebrating that. Are there's really not anybody even close to us on our representation of what we've been able to do locally in small states.

[Sen. Alison Clarkson (Chair)]: And in a relatively short period.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: In a relatively short couple decades. Yeah. Yeah. No doubt. No doubt about it. So that success has been shared. An economic survey that I conducted for Peter Welch many years ago, we represent close to 40 Vermont manufacturers, clean beer, wine, cider, and some local water companies. So our made in Vermont portfolio represented over 500 jobs, and we collectively bought over 500 Vermont businesses. So local is a huge part of what we do and how we do it. To think about the fact that we represent national brands animals, open brands, make it all work is a testament, I think, to a three different ways. Can you put that in a percentage? So if I was gonna put it into a map and map percentage at the moment, I would say our local portfolio probably represents somewhere between 20 to 25% of business, which is significant. You think about also how the natural branch is. Our breweries face the same challenges we face. They're just on different scales. And I know all sides of the scales. I know the small scale, and I know the larger scale. None are easy. I have worked and managed from our breweries, understand what it means to manage cost of goods. I know what it's like for a supplier to call you and change their terms on you. I know what it's like to manage payroll and promotions for a small business. So we want our local manufacturers to be as sustainable as it can that helps the system. Anna spoke to it earlier, I believe, where starting on your own, seeding the market, and eventually coming to a distributor with with a proven brand, consumers that are following, it's kind of the way that the ecosystem has been successful over the years. So we have no major concerns at all. Understand the desire to produce birds for smaller breweries. Again, I mentioned we want them to be successful. We see value in breweries starting on their own that helps them understand the market and build direct retail relationships. We cannot represent every brand. Those are business decisions that we have to make. Do we have do we have styles that are not represented? Are we simply just at our max capacity? Because we also have to be honest with ourselves. Can we manage it more than we currently have? And there's ebbs and flows to years that we bring in and acquire a lot of brands, and there's years where we're kind of, you know, we're just we're kinda holding tight because of the way that the market's structured. And and right now, we haven't had any kind of major new brands come into the market. Doesn't mean that we're not constantly having conversations because our doors are always open to any brewery that ever wants to come in and talk about potentially partnering.

[Sen. Alison Clarkson (Chair)]: So, Ryan, just on that, the 3,000, I mean, what were you Yeah. You if 20 what what impact does this section six have on that 20 to 25% of local distribution view? And is this a a a I know you had impact on moving the or initial proposal from 5,000 to 3,000. If you'd share with us I mean, that that still has you distributing some of our larger breweries product. How just talk to us about mean, here, you support the bill, which is great. How does will this impact your business? Well, I wouldn't say it's really gonna impact us at all.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: We work with small That's what I'm hearing. Yeah, represent some really small breweries. We've represented some really small breweries that are now big breweries. That's the power of the three tier system. I mean, think about Jesse mentioned zero gravity. We started working with zero gravity when they were probably selling a couple of barrels a year. They're making a lot more than that now.

[Sen. Alison Clarkson (Chair)]: And you're still distributing it.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: Absolutely. Absolutely. So we are bala it's just like managing your money. You have to have a balanced portfolio, and that's and that's what we continually kinda strive on. And and there's been many times, Sandra, when when a small brewery has wanted to work with us, but we have said no because we didn't feel as if they didn't align with kind of how we do business or simply maybe we just didn't feel as if we could give them the time and the energy that that that that we we could. So, you know, the national average for a craft brewery is pretty small. You know, it's like a thousand barrel. So, you know, at the end of the day, when you're if you're brewing 3,000 barrels and you're delivering 3,000 barrels, you're you're not you're not doing that in Subaru. You're you're real legit. It's your warehouse, your forklift, your your your multiple people on payroll. So So I I think

[Sen. Alison Clarkson (Chair)]: this is helpful because I think we're hearing that the this isn't gonna have a huge impact, that you are supportive of the bill, supportive of section six. And, Thomas, do you have a question before we say thank you to to Ryan? Because this is great. And if you Ryan, if you get us the test, can I hope that that would be great?

[Sen. Thomas Chittenden (Member)]: Your industry perspective, do you have any opinion on if not, you're just setting this to sunset on 2028?

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: I I and the first time I heard that, I would be a commissioner.

[Sen. Alison Clarkson (Chair)]: So the only reason oh, wait. I think we don't have our Ledge Council with us. I think there I think that that is a amendment I think we'd like to make to develop before we've maybe voted out. Do we have Rick?

[Hannah (Department of Liquor and Lottery staff)]: Yes. He's joining right now.

[Sen. Alison Clarkson (Chair)]: Okay. He's joining right now. Greg.

[Sen. Thomas Chittenden (Member)]: It seems worth them to not have this sunset if I may add because if they're gonna start to distribute 3,000 barrels, that's some heavy investment you're gonna

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: put into that process. I understand, senator. To get to this, if a 500 barrel brewery and all of a sudden your goal is to get to 3,000 barrels, that is a major lift.

[Sen. Thomas Chittenden (Member)]: That's moving on the horizon.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: That is a major, yeah, you certainly have to plan for it, but just because of the way that the market is currently kind of sitting at with, you know, beer in general has been declining. Wrap beer market share has has lost a little bit, but it's still a very strong category. It's one that we're still investing in every single day. But to go from 500 barrels to 3,000 barrels is yeah. You'll have to plan for it, you'll have plenty of

[Sen. Alison Clarkson (Chair)]: time to plan these. David, and then I'm gonna check

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: national and.

[Sen. David Weeks (Clerk)]: And you just react to the May 30,000 barrel? Yeah. I I

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: I think that if anybody is brewing 30,000 barrels, then they're one of lucky people in the country.

[Sen. David Weeks (Clerk)]: Oh, I get that. But your reaction as an industry to that number, like why, you know, why 3,000? Was 5,000 now 3,000 means 30,000 is 10 times. A good place. Yeah.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: A good start. It 3,000 feels like a good next step, and I'm sure that if if that's successful and there's a handful of small breweries that have been able to grow their business to that level, I'm sure we'll be back here, and I'm sure there'll be another discussion about the next cabin.

[Sen. Alison Clarkson (Chair)]: Yeah. We as you know, we meet on this every year. We always have a miscellaneous Yeah. Booze bill, as we call it. And so it's we review these laws as does the the commissioner and the DLL. So I think that we have ample time to review, see how it goes. She reports to us every year. The Brewers report to us on a regular basis. They have good lobbyists and So I think so, Rick, Ryan, I think we're if and if you want your last parting shot because we're gonna move on, and I think we're gonna talk with our legislative council who is joining us remotely today. Any parting shot? You okay? I'm I'm okay. Thank you for doing this on the spot.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: You can stay right there because that's

[Sen. Alison Clarkson (Chair)]: the only seat in the room. So stay right there, and Rick's gonna join us from Rick.

[Rick Segal (Office of Legislative Counsel)]: Good morning.

[Sen. Alison Clarkson (Chair)]: Good morning. We're thinking of I think there is some thought that we would like to remove the sunset that's at the end of the bill

[Rick Segal (Office of Legislative Counsel)]: Mhmm.

[Sen. Alison Clarkson (Chair)]: Or section six, which is contained in section seven, I believe.

[Sen. Thomas Chittenden (Member)]: So delete section seven and get rid of the reference to it in the bank dictates.

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: Right. So right?

[Sen. Alison Clarkson (Chair)]: Yeah. And I I just also think because we didn't, I believe, put possible vote on this. I'm gonna just I I am I'm gonna let us maybe take this to next week for vote in case there's anybody who hasn't testified and would like to. I'm just putting that out there in the universe. I think we will try and vote on this once we have a new draft from Rick. Rick, is there anything else you had thought about on on our booze bill on h nine twenty one?

[Rick Segal (Office of Legislative Counsel)]: So Rick Segal, office of legislative council. No. And I will remind the committee, this is, you know, Tucker's bill covering for Tucker. He's back next week, so I think that it would it would be beneficial. I don't mind, you know, making this amendment, but having him double check to make sure that nothing there's no collateral damage as it were in deleting these sections. So I I I don't have any other comments. I do wanna make sure that I know what you all want. And I heard section seven, you wanna strike that

[Sen. Alison Clarkson (Chair)]: repeat. The sunset for the distribution, but it is it also says removing the certified check requirement, but I guess that's just the title that's still there.

[Rick Segal (Office of Legislative Counsel)]: That is so that is the bottom of page five.

[Sen. Alison Clarkson (Chair)]: Into the next gun. Yes.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Yes. Yes.

[Sen. Alison Clarkson (Chair)]: It. Yes. Sorry. Because they're on different pages. It's but I'm also could you just while we have you clarify section nine at the the first part of section 11, which is confusing to me. This section yeah. Could you just explain that a little bit?

[Rick Segal (Office of Legislative Counsel)]: So section nine is it's very it is confusing, but it's the way we have to structure this. So and I'm looking down because I'm looking at a piece of paper, looking at the bill. So the section nine is deleting as the the reader assistance headed above you reader assistance heading above just explains, it's deleting the 2026 sunset of special venue serving permits for retail establishments. So section nine is amending. Section three, that is this strike through repeal Right. Of seven BSA two fifty four, the special venue. So that is the section is repealing that repeal.

[Sen. Alison Clarkson (Chair)]: Right. Am I understanding this is basically a technical correction that this was never intended to be done for two years. So I just wanted us to be clear on that. And then section 10 is that is also reflects.

[Rick Segal (Office of Legislative Counsel)]: Well, I I I saw I don't I I will also clarify. I don't I don't know if it's a technical. I I I will trust you on that. I don't know if that's technical. I also

[Sen. Alison Clarkson (Chair)]: from Tucker.

[Rick Segal (Office of Legislative Counsel)]: Also say on page seven, let's not forget that you're also deleting this section four that was also in this 2024 act, that seven VSA section two of the definitions. So striking that, definition will be, undone. Just wanna make sure it's clear. Then section 10 on the last page, is amending the effective dates in act one fifty six, the same act that we're amending in the previous section, by deleting that effective date of 07/01/2026, section three and four, which are the previous two. So these these two I'm sorry.

[Sen. Alison Clarkson (Chair)]: I'm kinda walking through They're the

[Rick Segal (Office of Legislative Counsel)]: connected. They they they are connected.

[Sen. Alison Clarkson (Chair)]: Right. And I appreciate your helping provide that connectivity. So I think let's wait for Tucker to be back before we vote this out. If anyone else needs to feels compelled to testify before we do, but we'll aim to try and vote it out to steer Wednesday. May I

[Ryan Chittenden (Farrell Distributing; Vermont Wholesale Beverage Association)]: say one more? Yes, Brian. Go for it. I wanted to just also just remind the folks that we started distribution businesses that Title VII, alcoholic beverages, it's important they understand all those rules and laws. How to play, you can't do. And and also, I would encourage them, and again, I'm glad that Jesse's sitting next to me because I went to this place last week, and right on his chalkboard, he clearly lists the date that his draft lines were cleaned. We spend we have seven people that travel upstate that just cleaned draft lines to make sure that to make sure our retail make sure barrel distributing lines are clean and sanitary. So I would just encourage folks that are that are also starting off distributing the the beer and kegs to make sure they know and and offer that service because it's important to to watch it.

[Sen. Alison Clarkson (Chair)]: No, I appreciate that, and I would assume, and we're gonna look at Hannah, we are gonna look to make sure everyone is well educated before they take on this additional responsibility and the additional cost. Right. So we will we'll look to vote this out next Tuesday or Wednesday, once we figure out what we're doing with our agenda. And thank you all very much. This was very helpful and more follow. Great opportunities ahead. Okay, Rick, stay with us if you would. Thank you everybody online. Thank you, Darren. Thanks, David. Culinary center. Oh yes, on the culinary.

[Unidentified committee/staff (brief interjections)]: So wholesalers would be very engaged and involved because, obviously, the restaurant industry and of sorts are are our core customers. So if there are ways that we could help secure our pipeline to make sure restaurants are open and trained, we would be a part of that.

[Sen. Alison Clarkson (Chair)]: Right. We will be in touch. Yes. I mean, I know. Because we're all gonna have a Christmas.

[Unidentified committee/staff (brief interjections)]: If we do, it's gonna take time. But you have a great rest.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Thank you.

[Sen. Alison Clarkson (Chair)]: I look forward. Great. Thank you all. This was terrific. Wish I had a high degree. We'll see, like, the species. And I got I'm gonna help you get culinary. Yeah, oh good. Yeah. That's interesting. Ryan, Sharon is interested. Hi. Great.

[Unidentified committee/staff (brief interjections)]: We need restaurants open for sure.

[Sen. Alison Clarkson (Chair)]: Oh my god, we need a pipeline for those restaurants to open. Okay. We have fifteen more minutes with David, and then we are Okay. Great. Rick, are you with us?

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Thank you.

[Sen. Alison Clarkson (Chair)]: John Dewey. So we're gonna just pivot. Could someone close the door, please? Thank you very much. A guest who is kindly helping. Thank you very much. Very grateful. We are switching gears because another bill that we're hoping to vote out is our sister state is our sister state bill, and we would love to take additional testimony today from from people who have experienced the the real pluses of having exchanges culturally, intellectually, economically with other countries and other provinces. And I thought of our friend, judge John Dooley, who for many years was very involved with our sister state activity with Petrocevaz in Russia. And so, John, we thought you would be a terrific person to lead us off. Oh, there's Susan as well. So we have Susan and John. John, it's great to have you. Thank you for joining us on sort of a short notice, but thank you very much. And take it away. I think you've met us all before. I think you know David and Randy. Johnny, are you you there?

[Hon. John Dooley (Ret.), Former Justice, Vermont Supreme Court]: Yeah. Good morning.

[Unidentified committee/staff (brief interjections)]: Good morning.

[Hon. John Dooley (Ret.), Former Justice, Vermont Supreme Court]: Let me see if I can do this. I realize you have limited amount of time. Let me try to give it. I've read the bill.

[Sen. Alison Clarkson (Chair)]: I understand

[Hon. John Dooley (Ret.), Former Justice, Vermont Supreme Court]: what you have in front of you and what the house has passed. I must say that I think this is a good direction. And as you said, I did this kind of activity with, numerous regions actually in Russia, in in all of in rule of law related, kind of activities and issues. As the your chair, pointed out, Vermont had a long standing sister state relationship with Karelia, a region that's on the Russian border with Finland, about a couple of 100 miles north of what's now Saint Petersburg and was Leningrad Oblast. It was actually created from the Russian side. They were approaching the time at which they essentially, the Soviet Union fell apart. There were some people in Karelia who were very interested in reestablishing relations in The United States, particularly a woman who was actually born in The United States whose family moved to Russia, the great society they thought, although it didn't work out the way, the family wanted. She still thrived in in Karelia and became the president of the one of the universities in in Petra Zavaz, but she was from Minnesota. So she went started establishing relations with Minnesota, found a way to establish one with Vermont, persuaded the Karelia side to invite them on into a sister state relationship. It went to Madeline Kuehnen who said yes. And she visited, they signed the agreements to do it. And one of the first groups that ended up coming to The United States as a result of it was a group of lawyers and judges. And they asked if there was some kind of joint relationship we could do to work on rule of law kind of programs. I had recently joined the Vermont Supreme Court at that time, and I thought that was a great idea. I had long been interested in Russia. We actually tried, to go to Russia and couldn't get, a visa get in. So this looked like an opportunity to do something that was of interest to me. And and and the major thing that happened that enabled this to occur is that the Soviet Union fell. The United States Congress passed a law with lots of money to try to help Russia become essentially a western democracy. And one subject they wanted to us to help with was rule of law. And we had, of course, started our relationship with the sister state relationship and with the groups that came, including the chief judge of the Correlia Supreme Court and the minister of justice and and a number of lawyers. And that looked like an interesting thing to do. It happened, and this was something that would gave us a lot of a chance for doing it is that the agency that was responsible for most of the implementation of the congressional act was USAID. Yes. The USAID that doesn't exist today. I see. And from my experience, I think somewhat sadly. But in any event, USA did put out a RFP for a provider to do a rule of law program in Russia, and it was won by Associates of Rural Development in Burlington, Vermont. As it that couldn't have been better luck for Idesire to get some money to establish the ongoing relationship Yeah. To do it. So with the sister state relationship, we went forward designing programs over almost twenty years with Karelia. We spread to eight other regions, partnered with eight other states, some of which had preexisting system state relationships, some of which established them only on rule of law activities all over Russia. For example, we had one of the regions that we got to do this and was able to provide get funding for was between Alaska and Sakhalin. Sakhalin is an island off of the Eastern Side of Russia, far away as you can get from here. But, of course, when you wrap around and you're talking about Alaska, not that far from Alaska. So we we were able to get that sort of activities. We worked on many projects. I think we accomplished many things. I think it was a a success. And as I say, it ran almost twenty years. It finally ran out of gas when Russia kicked USAID out of Russia. And so the major funding sources source declined, and we were and couldn't we couldn't continue to do the programs we we did during the time. I think what the world thought was gonna happen is that us Americans were gonna go in there and try to tell Russia to create a legal system like America. In fact, that's not what happened. I learned as much from the Russian side and how they did things despite the fact that it wasn't a country known for its civil rights. Yeah. Then then I think anybody learned from us, and we were able to do a a lot of joint programs that were, learning experiences for both sides of of this. And we ended up with a whole bunch of within the court systems in The United States, a whole bunch of people very interested in Russia who are regularly relating to regions in Russia and and doing joint programs with them. And I think that was a a good help for Russia, but also I do think it was a good help for The United States. So that's my quick story. I'm happy to give you

[Sen. Alison Clarkson (Chair)]: It's good quick story. And as as as you know, but nobody else knows in this room, my dear husband, Oliver Gooden joined John on a couple of these trips, and it was really it was an extraordinary experience, I think, for everyone involved. I'm heartbroken that that ended because that was a that was a terrific the Vermont Law School benefited. Vermont benefited. It was our students benefited. It was great.

[Hon. John Dooley (Ret.), Former Justice, Vermont Supreme Court]: Yeah. The Vermont Law School, which had participants from the faculty, establish a legal clinic in Petrozavac, Liak, Sivy, Karelia, and that was the first one in Russia. And they became the source of how to do that, and and it spread all over Russia. Just like American law schools pretty much now all have a clinic kind of arrangement where students are providing legal services.

[Sen. Alison Clarkson (Chair)]: John, do you know if any of those clinical clinics have survived?

[Hon. John Dooley (Ret.), Former Justice, Vermont Supreme Court]: Yes, the clinics have survived in Russia for sure.

[Sen. Alison Clarkson (Chair)]: Oh, that's great. Well, so that's just terrific. Well, thank you. That's very helpful. Anybody with a question for John before we okay? Given our time is tight, particularly with keeping David here, I would love to hear I think we have two people. We have Susan and we have Alison. Are you Alison? I am. Alison, come join us. Thank Because, Susan, we're lucky enough to have close by, but you have come to us from Hartford. From Hartford, all the way from Hartford. Great. Thank you for joining us.

[Alison Littenden (Hartford High School teacher; Hartford Sister City Committee)]: Thank you for allowing me to

[Sen. Alison Clarkson (Chair)]: be here. Would you just introduce yourselves and tell us about your experience with exchanges and the importance of having a sister state program?

[Alison Littenden (Hartford High School teacher; Hartford Sister City Committee)]: My name is Alison Littenden, I live in Wilder, in Hartford, teach at Hartford High School, in White River Junction. I've taught there for three years now. Prior to that, I taught at the Mary Cross School in Norwich, pre K to six for twenty years. And I am a member of the Hartford Sister City Committee. We do have a sister city in the South Of France. We've had multiple adult exchanges. Every two years they host a festival where they welcome, delegates from their nine sister cities. So they're delegates from Senegal, Portugal, Spain, Turkey, Morocco, and so all of us were able to connect. And one of the things that we've been thinking about is how to broaden the relationship to think about businesses, because that's the foundation of an economy and of a nation. My personal experience, in addition to going there with the town of Parkford, was I took three students from the cosmetology program at the Parkford Area Governors Technical Center, And we welcomed three students from the technical center there who were specifically cosmetology students. And interestingly enough, none of the three students from Hartford, from HACTC spoke French, But they were all crying on the last day. And obviously in a lot of relationships like this, there is a huge linguistic component. But these girls were all just touched and moved, and they were doing each other's hair, and they were sharing so much. It was an unbelievable, experience. And so I was, in Sanon in November for this festival, and so my goal now is to think about ways that we can connect with a high school that's not specifically a technical center. My first trip there in 2018, the city of Saint Ole is a suburb of Bordeaux in the Southwest Of France, and Bordeaux is a pretty significant tram system, we have a, there is a tram named after the town of Hertford that runs on the tracks in Bordeaux. I have yet to see it in operation. I cut the ribbon to inaugurate it in the garage, sat at the driver's seat, but unfortunately have not seen it in my subsequent visits there. That was an incredibly exciting time. One of our select board members, accompanied the committee and it was a very, very special, special time. My colleague at Hertford High School, Thatcher Hinsdale, who teaches German, has an exchange that's been in existence for, I wanna, I think he told me since 2012, with a German school, welcoming students here, sending American students over there. This year looks a little tenuous for that, but, he is actively looking at creating a relationship, hopefully with a town in Quebec. So I think one of the things that I think is so exciting about this idea is the broadness of it, this idea of a city Because there are so many possibilities. I mean, we're, Hartford is rural, and there's plenty to do, but it doesn't seem like what one would think of as a sister city. But Sinal had the opportunity to pair with a town in Texas as their American sister city, and they said, no, we don't want do that, we want to do Vermont. So it was an active decision on their part to partner up with us.

[Sen. Alison Clarkson (Chair)]: I think Do you see some of these smaller sister programs feeding into and getting coordinated through a bigger or statewide sister state program? I would love to see that. I mean, I think Yeah. Because if you're talking about economic development, is,

[Hannah (Department of Liquor and Lottery staff)]: of course, our bailiwick. Right.

[Sen. Alison Clarkson (Chair)]: That's a great opportunity I think for us as we look at these smaller programs.

[Alison Littenden (Hartford High School teacher; Hartford Sister City Committee)]: Yes, and so when I was there in November, I went with two lenses. One was the educational lens, but then also thinking about the economic piece. They have a really interesting work sort of internship program for high school age students there. And so thinking about kind of merging those two ideas, the education piece and the economic piece, I think could be really fascinating. So I, Martha Deese, who's the world language liaison at the Agency of Education, I saw her at a conference on Friday and she reached out to me about this and I said, Absolutely, I would love to go talk because I find it just in a world that's becoming more divided, we need to find ways to connect. Good work.

[Sen. Alison Clarkson (Chair)]: So Well, thank you. They this is really terrific. And I'm so thank you for being so willing to do this in such a short fashion. It's so fun. It's so fun. Fun be here. Any questions for Alison before we that's that's very helpful. And I hope you stay engaged with this as we hope to move this forward. I would I would

[Alison Littenden (Hartford High School teacher; Hartford Sister City Committee)]: love to in at capacity. I would be greatly thrilled.

[Sen. Alison Clarkson (Chair)]: Well, stay tuned. Yes.

[Alison Littenden (Hartford High School teacher; Hartford Sister City Committee)]: I can leave my card with you so that

[Sen. Alison Clarkson (Chair)]: you have it. That would be great. And given you and I are in the same county, it's useful. It's wonderful. Yeah. This is great, and thank you very much. Thank you for your time. Oh, this this is great. I'm also hoping that we will be rolling this out next week as well. And I, if not, maybe can run it out today. But I'd love we'd love to meet Susan. Thank you.

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: Do have a click? Yeah. Okay. I just wanted to

[Sen. Alison Clarkson (Chair)]: go down. He has a meeting, and so across the street. So Well, I'll skip to

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: the spoiler. We support it.

[Sen. Alison Clarkson (Chair)]: I was thinking three. No. We're shocked.

[Steven Evans LaFleur (Executive Director, Vermont Arts Council)]: But we'll see. Hi, everyone. I'm Steven Evans LaFleur, executive director of the Vermont Arts Council. Happy to always talk about ticket resale, but also happy to shed a little light on the many other things that the Arts Council is involved in across the state. As I noted, we're fully in support of the Sister State program. I haven't had the opportunity to be part of the Sister State Working Group over the past two years. And that group really worked together to develop something that we think will work here in Vermont. I don't know how often you hear this, but it was a great working group. It was a really wonderful thing to be heard of. ACCD did an amazing job managing it. Everyone brought their skills and expertise and really a willingness to learn. We had the opportunity to learn from other states, and we focused on creating something kind of realistic, responsible, impactful. And our recommendations for the program, I think, really lean into an effective use of a public private partnership in a meaningful way. I also wanted to note for this committee specifically that there's important attention to detail in there to ensure that the sister states program is aligned with national regulations and on international engagement. The final report, you may have seen that, which included an internal review process. I thought you would all be interested to note that we recommended that the internal review process include a comprehensive check against federal and international sanctions lists, specifically the US Department of Treasury's Office of Foreign Assets Control, folks act, sanctions list and the State Department sanctions and restricted entity lists. We really felt that when it came to economic development, the sister state working group believed it was vital for our partners in this to be upholding values that we support in our own democracy and economy. Absolutely. So I've placed all of the ways that Vermont's artists and arts have benefited from international exchange over the years. Do we have

[Sen. Alison Clarkson (Chair)]: a currently have a fairly robust exchange program? We no. Not a specific one, but we've,

[Steven Evans LaFleur (Executive Director, Vermont Arts Council)]: of course, have artists touring artists who travel here a lot. I note that touring artist visas are getting more and more challenging to receive Absolutely. True. In this moment. I'm part of a national group that's looking at that, and it is very complicated. However, the Vermont Youth Orchestra Association has does tour has previously toured their orchestra. Their first tour was in 1990, and it was an exchange tour to Yuroslav. They also had conversations you may have heard about the sister state program at Tottori, Japan. They played for the Tottori delegation when they came. And I think as you've heard from many sectors, sister states are a great start to these partnerships that really benefit students. There's also an important piece of this that has the opportunity to benefit tourism as well, you know, people from sister states visiting Vermont. There was actually a research study published in the Journal of Hospitality and Tourism Management in 2020 that looked at the economic impact of exchange programs like this, and they found that there could be significant and direct economic benefit through tourism if the program defines that as an outcome, and that was one of the things that we talked about in the committee. There's other states we've learned from that just have fascinating partnerships too in higher education. The College of Charleston in South Carolina has a sister state scholarship program. Offer pop up admission to students from South Carolina's sister states. So it's kind of like an endless way to do this and build on the great things that are happening. We're fully supportive of this. We look forward to bringing more artists to Vermont and creating opportunities for more Vermont artists to be traveling, student artists as well, to regaining experiences around

[Sen. Alison Clarkson (Chair)]: the world too. Right. Thank you very much. I I think this my sense to the committee is that we're very supportive of this. We've all seen the benefits of this, and I just didn't I mean, both, as you heard, my husband went with John to Russia, and that was very impactful. And I have been on an exchange with well, not really exchange, but gone to Taiwan for this kind of learning opportunity. And certainly, I'm very eager for us to develop more economic development ties with Taiwan as a result and have trying to get that moving forward. One of my questions, and it's one that the director of our international trade program has raised, I feel that until you're set up and established, that the bill calls for quarterly meetings, I think that makes sense for the first year or two. How do you feel Alison and John, I mean, I just feel that that probably makes sense until it's set up and going. And then, of course, you could limit it. The board the council would run itself and so figure out how else it's been needed to meet. But until you're up and going, it strikes me that that quarterly meeting keeps you on track, keeps that that energy flowing and and keeps you on track. I think so.

[Steven Evans LaFleur (Executive Director, Vermont Arts Council)]: And it really was determined based I think the the role of that committee would be to vet application basically, applications coming in,

[Sen. Alison Clarkson (Chair)]: which would involve an an Vermont nonprofit who wants to do it, an idea to start it. There will be some additional to do here and

[Steven Evans LaFleur (Executive Director, Vermont Arts Council)]: and further organizing. Exactly. And that process will be you know, I there are all the partners who are involved in the working group are committed to continuing it, including working with the Vermont National Guard and their international programs. They had some ideas about starting points. States that we worked with, I know Tim from had some ideas about things that are already in the works. Again, using this as a way to build on the good things already happening. And that there is an important role for a partner organization who would run it. You know, we had many conversations about funding. This is there are other states that fund these programs robustly. Right? There are other states where there's a lot of private funding. We kind of

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: assessed this and knew kind

[Sen. Alison Clarkson (Chair)]: of the outcomes we wanted and the reality of what we are working with here, of what's possible. Well, this year in particular is very lean, but it is not always thus.

[Steven Evans LaFleur (Executive Director, Vermont Arts Council)]: That's good. I'll keep that in mind for future years. So it's so, yes, I think that as long as ACCD is committed to driving this as if they say that they are and we I want them to be, that sounds great. I think they've really especially, Chittenden's strap has really taken the the big lift on this and really driving the program. I think for it to be successful, you need that administration commitment and commitment of time and resources and human capacity that can really drive those from the state side.

[Sen. Alison Clarkson (Chair)]: Yeah. Great. Thanks. Thanks. I I I think we're over well, I wanted to touch base with Tim, but I'm hoping that we can move this forward next week and vote it out. Right. But I wanna I've been in email contact with Tim. I just wanna touch base with him again. But thank you. Thank you all. This was terrific. Josh, are you here to talk about Sisters Day? I'm

[Jesse Cronin (Owner, Lucy & Howe Brewing Company, Jericho)]: not, but it's fascinating

[Unidentified committee/staff (brief interjections)]: to

[Sen. Alison Clarkson (Chair)]: hear. Right. Any questions for Susan on this piece? Right. On other pieces, of course, we have lots of questions. Thank you very much. Really appreciate it. Think we'll go offline. Great. Thank you.