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Legalities of selling homebrewed beer?
Rhino
TheRhinLOLRegistered User regular
TheRhinLOLRegistered User regular
I homebrew for a hobby. The ingredients and equipment are getting quite expensive though. I know I can't legally sell it. My friend though, says it's perfectly acceptable and legal for him to buy the ingredients, I would make it and we would split the output. Between friends, it's probably alright if he has a hand in making it and gives me the ingredients directly?
It's like baking a cake, he brings the supplies, I have the oven, we make it together and we split the cake afterwards.
But what if his friends and friends of his friends are asking me, but instead of giving me the supplies directly they want to just pay cash. And only for the "share" of the ingredients that are in the output they want.. I told them no, but just curious on the legality here.
Also, for sake of argument. How much trouble could I get into for selling directly? I would never do that. But my friend is saying it's not a big deal. I want to prove him wrong and give him some idea of how much of a big deal it really is.
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However, if you wanted to have some friends share in the ingredients that is fine. Friends of friends is a bit iffy though. If it is that delicious, maybe you should look into a microbrewery.
but they're listening to every word I say
I'd expect the trouble you could get in would be restricted to selling without a licence, though it is possible you may also open yourself up to liability if your customer say, gets into a car accident following the purchase/consumption of your alcohol. Obviously you'd be careful not to sell to anyone who is a minor/not legally allowed to consume alcohol, that would be another potential hazard. Oh and perhaps income tax related charges if you aren't declaring the income.
Overall, I think between friends the risks are extremely minimal as long as you keep it amongst yourselves. I'm sure this kind of thing happens all the time. It's when friends of friends start getting involved, people you don't really know, then all it takes is one person to report you for some reason and you're being investigated. For what you are planning though, it should be fine. *not legal advice lol*
You should really check the laws in your area; if they're vague, call the cops and ask them yourself.
Why even bother risking it selling it? It's not that expensive. I give away a good 30% or more of my batches because I like sharing what I've done creatively. If you kept it pretty quiet, I doubt you'd get caught, but man, I'm proud of what I make. I like giving mine away to anybody who wants some.
xbl - HowYouGetAnts
steam - WeAreAllGeth
I love giving mine away too. But "expensive" is a relative term. I like to try new beers and I only have so much "hobby money" I can use for supplies/equipment. Some guys are ok with dropping $400 a month on this; but I'm not one of those guys. I guess I was hoping for a way to offset some or all my costs.
I guess I should look at reducing my supply costs. It runs me about $20-40 per 5 gallon batch. I'll research it more. Maybe I can buy in bulk for some things.
Do you do grain or extract? How much are your supply costs? You said you had a 10 gallon setup, is that cheaper or more expensive to run a batch (per oz, not total)?
Jesus 400 a month? Who the hell is dropping 400 a month on brewing? That's...that's way more than I've ever spent on making a batch. That's probably more than my club has spent on multiple batches.
I did 5 gallon extract/grain for two years. Cost roughly 30 bucks for a batch for anywhere between 40 to 50 bottles. The 10 gallon all-grain batch I have planned coming up will cost about 70 bucks (it's a complex batch) and should yield over 100 bottles, or two corny kegs if I get those in time.
The way I see it, if you have a materials-intensive hobby like this, you shouldn't really be terribly concerned with offsetting your costs. That's why it's a hobby.
I am in talks with a gal who owns a small organic farm who is hosting some kind of event in a few months and who wants to serve my beer. She offered to buy it off me, which I refused (for a few reasons), but she insisted so I gave her the option of purchasing some co2 equipment for me. Maybe something like that would work for you, having your friends buy you bottles or something.
xbl - HowYouGetAnts
steam - WeAreAllGeth
Crazy guys. There are big spenders with any hobbys. Again, expensive is relative. $40-80 a month (or 2 or 3 batches plus some small equipment) is costly for me.
How legal is that? Could the feds bust you for that? The spirit of the law, some would say, is being violated there. I know she isn't paying directly, but will that hold of in court if the ATF raids her little event?
My experience is from college parties being busted for having people pay for alcohol. Of course, generally that crack down was a veiled way to shut down big parties in otherwise quiet neighborhoods, but it can happen. If you aren't prepared for it, I'm no lawyer but I would avoid it.
Also, this shit varies highly state by state.
This still hasn't been answered.
The only real loophole I could see is if MAYBE they bought all of the materials to make a batch, in which case they'd just be using your equipment, but you'd still possibly be responsible for whatever they did with it, or if they got caught driving back from your place with a few gallon jugs of beer, which may or may not be classified as an open container. Honestly it's just a bad idea. If you're not cool losing money giving it away then you need to just make less of it and let them deal or buy their own setup.
Now if you're looking to make more than 100-200 gallons a year or actually sell it you need to get a license. If you're even close to that amount then you need to get a license, because again, a nosy neighbor can make serious trouble for homebrewers. My weeks working for ABC were filled with looking at evidence photos of stills and homebrew setups because someone called in a complaint and ABC isn't like the local police, who might just show up and tell you to knock it off. They're gonna take your shit and put you in cuffs and let the attorneys sort it out later.
Look, the realistic nature of this is that the ATF or ABC board has no fucking clue what you're doing in your home. You can make this delicious beer every day and be fine, let your friends come over and drink some, and generally be a cool dude. When you start letting them take it off your property though or do things that will technically reimburse you for the costs you're entering an entirely new area. It could be anything from them getting busted and saying they bought it off of you to some friend of a friend of a friend getting sick off your beer, like another poster said.
It's a hobby, so just keep it that way.
Do you have to actually open a brewery so that you're paying taxes and undergoing health inspections? Is it simply a matter of getting listed as a business?
MN, USA.
Yea, that's a different topic - but equally messy and confusing in terms of legality.
You need to setup a normal business that can report taxes, etc. That part isn't hard, same as any other small business.
Then you need local and state liquor permits. I'm not sure what is involved here. But it's complicated unless you have a lawyer?
The permits are different depending on if you are just brewing, have a brew pub (tasting on site), or sell it on site, etc, etc.
Your product also needs testing and certification IIRC. Also you can't do it from your home in most states. It has to be an industrial area, whatever that is.
You also need things like branding permits and special type of insurance I think.
I was told between $10K-$500K depending on the state and what you actually want to do. That is per-year.
Fair enough. Thanks for the post.
You would also be subject to health regulations and stuff.
You should watch Beer Wars, it's REALLY hard to become a successful microbrewery.
Yeah I've seen it. I'm more concerned about the process - not how one becomes successful.
You have to get a bunch of licenses and stuff. How hard it is to get the licenses varies wildly from state to state, however. You also need some serious capital to get real equipment.
http://612brew.com/beer/?page_id=3
https://sites.google.com/site/minnesotabeeractivists/about-us
I think they also talked about renting brewery space/time so you didn't have to deal with a large investment in equipment until you are more sure of you sales.
edit:
http://www.citypages.com/2010-09-15/news/612-brew-fulton-beer-surly-and-the-craft-beer-renaissance/
I remember this article being more informative but i guess that's it.
Hey, me too. I know some friends that are big into this so I will ask what they know and pass on the info. Some have already looked into it.
but they're listening to every word I say
I'd be hard-pressed to find anyone, legal authorities included, who would take issue with an argument of "my buddy and I are big into homebrew. We go halfsies on all the ingredients, but I'm the one who does the actual brewing".
You would get in *big* trouble for actually selling, as in "here is some money, and in exchange here is some homebrew". There are plenty of ways to sidestep the law, and most of the time the authorities have much better things to do with their time than go after you, but if you are caught in a direct monetary transaction involving homebrew you're pretty fucked (you're both selling alcohol without a liquor license AND selling food that wasn't prepared in a commercial kitchen, among other things). If you were selling a six-pack here or there to close friends I can't imagine you'd ever get caught, but your friend is wrong.