Essentially it is a CSA (Community Supported Agriculture) that instead of passing fruits and veggies passes out homebrewed beers. What are the legalities of this? It sounds like they take donations but technically it is free. It sounds like a wonderful way to expose people to homebrewing and craft beer in general. If I was involved with something like this it would allow me to become a better brewer since I would be able to brew more often…I can only drink so much
I’m not a lawyer either, but I’m with Denny - I think if anyone takes a look at the way they are doing things it will be deemed illegal. “Reimbursing for ingredients” is paying for beer in my view. The law isn’t against paying people to brew, it is against selling homebrew. If they have sacks of grains and hops delivered to the brewers house that might be more acceptable, although it is still a material gain.
Also not a lawyer. But I think any exchange of goods is considered a monetary (taxable) exchange and that would be considered “selling” homebrew. We’ve talked about “eggs/bread/vegetables for beer” before and as far as I can tell that’s barter and would be considered selling your beer the same as if you accepted cash instead of eggs.
I would think that even exchanging homebrew as many do would technically be considered barter and would qualify. Not that the authorities are going to be paying much attention to things like that. Something organized, however, might eventually cause them to take notice.
Might be a good subject for a Pint of Law article :)
Doug’s article was on the thing in NY though (“The homebrew shares costs $44”), the SF one seems to be set up differently. It’s still probably illegal though.
The second to the last sentence in Doug’s article sets the stage for the general illegality of the CSA homebrew model. TTB and state regulation requires very specific and often burdensome licensing requirements. Without satisfying these requirements, brewers are selling illegally.
That is what I would like to know. They have been operating for 3-4 months now according to their website. I know their CSA has been mentioned on various blogs and local newspapers. They aren’t trying to hide anything. I just wonder how much the authorities care? In the 33 years of legal homebrewing there must be some sort of legal precedent. I can’t believe that this is the first time something like this has happened.
I am a lawyer. Reimbursement for ingredients or other expenses is not selling homebrew. The fact that this is a corporate-type entity is significant, because corporations are not prohibited from homebrewing, that I know of. As a very general rule full of exceptions, anything an individual can do, a corporation (particularly a nonprofit) can also do. So ingredient-reimbursement within the same CSA would be legally akin to my buddy paying for the ingredients for one batch and me for the next and us sharing both batches.
That being said, it does sound like this CSA may be selling homebrew because of the “optional donations.” Regardless, I would be shocked if the SFDA wanted to prosecute this CSA, and I seriously doubt the ATF is going to pick this one up, so it is “legal” in the sense that no one is going to be enforcing the law. California also has about the most lax alcohol sales and distribution laws around, fwiw.
Skyler, I vaguely recall reading that the IRS technically expects people to report bartering activity - has that changed? How is this different? If the brewer is being reimbursed in either money or goods, wouldn’t that be a taxable transaction? And if it is a taxable transaction, isn’t that the same as selling?
I wouldn’t be shocked, unless San Francisco is truly without power hungry bureaucrats. Arbitrary enforcement of laws seems to happen often, and alcohol is always a magnet for attention.
Not a lawyer, but I don’t see how “donations” don’t make them vulnerable to being shut down. You could eliminate donations but who would brew a batch of beer for other people for cost?
I have an inquiry in with them. I am not in SF nor even in the bay area anymore but close. These are all good questions and I will ask when and if I hear back from them. Seems like at very least it’s a fun way to get to brew more often.
It seems like semantics to me to make a distinction between paying for ingredients and paying for the beer itself. But maybe there’s an argument there. I think the conduct of the CSA itself, however, plainly amounts to either illegal distribution, illegal retailing, or both (especially in the NY case where members pay for homebrew “shares,” as opposed to making voluntary donations). These are privileges that homebrewers have never had under the homebrewing exemption statute. Also, the benefit of the homebrewer exemption only applies to natural persons because it uses the term “adult,” which is expressly defined as a person who is of legal drinking age. A corporation doesn’t get to brew up to 200 tax-free gallons per year when it turns 21. ;)