Matt Richardson and his wife opened Tilted Barn Brewery on an old family farm in Exeter in 2014. Craft beer was exploding in popularity at the time and Tilted Barn was an immediate hit.
Richardson, however, quickly discovered a problem he’s still dealing with more than a decade later: Customers who want to take home some Tilted Barn to enjoy later are limited by state law to just two cases or 48 beers. That’s less than breweries can sell even in Massachusetts and Connecticut.
“All we want to do is get on par with neighboring states in New England,” Richardson said. “There’s a lot more freedom as to how they can sell their beer.”
There are now almost 40 craft brewers in Rhode Island, up from just a handful 15 years ago. Craft brewers say they employ more than 500 people and that brewery taprooms attracted more than 1 million visits in 2023.
Though the craft brewing sector represents a bright spot in Rhode Island’s economy, generating more than $1 million in tax revenue each year and attracting thousands of annual visitors, some craft brewers like Richardson say state government makes it difficult to grow their businesses.
Selling more farm-based beer
Rhode Island wineries that grow their own grapes are allowed to sell unlimited amounts of their wine on their premises. Rhode Island lacks a similar license for farm-based breweries, and Richardson believes that kind of license would make sense for the burgeoning local craft beer sector.
He has spent a decade trying to interest state legislators in creating a new licensing scheme that would help breweries like his — regulations that neighboring states have already enacted. But so far, craft brewers’ efforts have failed to gain enough traction.
They face other regulatory headwinds, as well. Unlike in Connecticut and Massachusetts, Rhode Island, brewers can’t distribute their beer to liquor stores unless they create an entirely separate company.
“It involves an expensive license you have to pay for every year,” Richardson said. “It involves extra infrastructure and staff to do it that way.”
Most states’ alcohol laws are based on a three-tiered system, developed after prohibition, that outlines separate roles for producers, distributors and retailers. But Rhode Island has done less than other New England states to modernize the three-tier system and make it less rigid.
Part of the reason is opposition from powerful groups like the Teamsters Local 251, which works closely with alcohol distributors in the state.
“The Teamsters enjoy good paying jobs and that is something this Statehouse has always worked so hard to create,” union lobbyist Paul MacDonald said at a hearing of the Rhode Island House Small Business Committee in March 2024. “We’re in the liquor business in a big way and are in the transportation business. That’s the core business that we have.”
MacDonald defended the three-tier system and said additional steps to help craft brewers would be bad for the teamsters.
“Just remember, every time you do one of these little things it takes another job away from us, and we don’t like that,” MacDonald told legislators. “We have the good-paying jobs now, and we’d like to keep them.”
But Jeremy Duffy, managing partner of The Guild craft brewery, said, “I don’t think the distributors want our business. It’s too small for them.”
Duffy is also vice president of the Rhode Island Brewers Guild. He said craft breweries multiplied over the last 15 years in part because the state increased their ability to sell beer from taprooms. But he said brewers are blocked now from things that would help to expand their business, like opening satellite locations.
“We need a lot more opportunities for growth and a lot more ability to have the customer’s attention,” Duffy said. “And what does that mean? Our ability to maybe sell more off-premise, our ability to have self-distribution rights.”
Duffy said the state should streamline the three-tiered distribution system.
“What I think we need to realize is that the three tiers should work in unison together,” Duffy said. “The way it’s set up right now, there always seems to be a conflict, and it always happens within the legislative side — that where one tier thinks the only way they can win is that they win themselves. I think we can win up and down the three-tiered system.”
Growing the alcohol-sales pie
Saturation has slowed the growth of the craft beer sector in recent years. Nick Fede Jr., who runs the Kingston Liquor Mart in North Kingstown and is head of the advocacy group the Rhode Island Liquor Operators Collaborative, said there are other headwinds in the alcohol business.
“Beer sales are shrinking in the state. They’re actually shrinking internationally,” Fede said. “I think right now everyone is concerned with their slice of the pie and everyone’s pie slice shrunk.”
The state legislature is not more supportive of distributors and package stores than craft brewers, Fede argues.
“I think what I’ve seen at the Statehouse, through work with the Senate and House, that they have been open to helping the brewers over the last 10 years,” Fede said. “There have been updates to the laws in the last 10 years to make it more business-friendly to brewers. The Raimondo administration, when revising craft-brewer laws, put in a massive excise tax exemption for craft brewers up to 100,000 barrels per year.”
Fede said the abundance of alcohol choices for consumers complicates efforts to increase everyone’s share of the pie.
“I think we need to focus on consumers, keeping them happy, giving them the variety that they want,” Fede said, “and I think that we need to continue (to) support local products that are well-made in this state.”
House Speaker Joe Shekarchi said regulating alcohol needs a difficult balance.
“Look, I understand that these breweries are new,” Shekarchi said. “They’re like disruptors —they’re like Uber was to taxis. And I understand that it’s part of the changing and evolving economy that we have in Rhode Island, and I understand people want more choices.”
The changes sought by brewers need to be examined for how they affect other longstanding businesses, Shekarchi said.
Look, I understand that these breweries are new, they’re like disruptors —they’re like Uber was to taxis.
“I think if there were a way to make this revenue-neutral for the state, you’ll see the deregulation change significantly,” Shekarchi said. “So I would encourage the breweries — they have a very effective lobbyist, and they come up here and they work very hard and they have had in the last four years that I’ve been here, some significant gains. And I will tell them to continue that process.”
At Tilted Barn Brewery in Exeter, owner Matt Richardson likes the modest scale of his business, with seven full-time employees and more in the summer. But he still views state regulation as an impediment to growth. Richardson said comparable out-of-state breweries that started around the same time as Tilted Barn now make about five to ten times as much beer.
“That’s not to say that we would want to be that big,” Richardson said. “We’re happy with our slow and steady approach and we kind of like to keep it simple. But at the same time, obviously, when you run a business, you want to see growth and you want to support the people that work for you. And to do that you need to make more beer.”
