If you’re interested in learning about how to start a brewery in Vermont, chances are you have a love and appreciation for craft beer. As any beer aficionado knows, crafting a quality brew is a process with many steps: from fermenting, conditioning, tasting and tweaking to bottling, packaging and marketing — and, of course, enjoying yourself. When you make the decision to start a brewery, however, knowing how to brew a great craft beer isn’t enough. To ensure that you remain in compliance with both industry and state laws, you must fulfill numerous licensing and registration requirements.

Vermont Title 7 regulates the state’s brewers and other alcohol producers/vendors. Potential brewers and/or brewery owners should keep these laws in mind not only when preparing to start a brewery but also when running it once established.

A good place to start is knowing what kind(s) of license(s) you’ll need to open your brewery and/or sell your beer. These guidelines are covered in §2 of Title 7. Typically, a commercial brewer in Vermont is referred to as a “bottler” which is defined as “any person that bottles malt, vinous, or spirituous beverages for sale or for distribution in this state” and requires a bottler’s license “granted by the liquor control board permitting a bottler to bottle for sale and to distribute and sell at wholesale malt or vinous beverages.” Depending on the nature of the business the bottler wishers to establish, other licenses — such as those for caterers, clubs and restaurants — might be needed.

Often, a bottler will also need a first class license — “a license granted by the control commissioners permitting the licensee to sell malt or vinous beverages to the public for consumption only on the premises for which the license is granted” — or a manufacturer’s or rectifier’s license that “permits the holder to manufacture or rectify spirituous liquors for export and sale to the liquor control board, or malt beverages and vinous beverages for export and sale to bottlers or wholesale dealers.” Depending on the bottler’s unique business goals, a second, third and/or fourth class license might also be needed to extend the bottler’s coverage and ability to sell in a variety of business situations — including off premises, for public consumption and by the glass/unopened container.

Before you apply for a brewer’s license, you should identify your business goals and understand which licenses you’ll need to lawfully run your business. Simply put, it would be a waste of time, money and effort to apply for conflicting licenses.

In addition to knowing which licenses you need to practice business, you must know how to go about applying for and obtaining a license. For example, the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) requires all brewers to post a surety bond — no matter what state they work in.

A surety bond is a financially binding contract in which the bottler pledges to pay all owed taxes appropriately. If the bottler fails to do so, the TTB will make a claim on the bond to access the owed taxes. In turn, the bottler will be responsible for reimbursing the surety company for any claims made. Although this is a federal regulation rather than a state regulation, posting a surety bond is still considered a prerequisite to being a legally licensed and recognized brewer in the eyes of the TTB — which, in turn, means it’s necessary to becoming a licensed and recognized brewer in Vermont.

Furthermore, entrepreneurial brewers should plan for bond costs and other licensing and registration fees when setting a start-up budget. An up-to-date list of fees pertaining to alcoholic beverage licenses can be found in §231.

Although fulfilling legal requirements is a far cry from brewing a great beer, the two go hand-in-hand if you intend to start your own brewery in Vermont. By fulfilling your licensing and permit requirements — initially and annually — you’ll be able to open your doors and become a craft-brewing staple within your community.

Sara Aisenberg is the director of educational outreach at SuretyBonds.com, a Missouri-based surety bond producer. As a surety expert who enjoys a local brew from time to time, Sara makes it a point to stay up-to-date on legislative updates pertaining to the brewing industry so she can educate industry professionals about licensing and registration requirements. You can keep up with Sara on Google+.

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