(The Center Square) – Minnesota’s hospitality businesses, struggling from the coronavirus pandemic, are also faced with issues stemming from compliance with a hefty number of state and federal regulations in order to serve alcohol.
According to data from the Mercatus Center, researchers from the Center for Growth and Opportunity at Utah State reported Minnesota faced around 9,462 rules and regulations which targeted the beer supply chain in 2020. Mercatus ranks the state 23rd in terms of the amount of regulations.
While the amount of beer regulations differed between states, overall, there were over 115,000 federal regulations in 2020 aimed towards beer suppliers and distributors, with an average of 10,212 regulations at the state level.
Among the top five states with the most regulations aimed at beer supply chains California ranked number one with 25,399 restrictions, Texas ranked second with 24,076, New York ranked third with 22,648, Illinois ranked fourth with 22,198, and Washington state ranked fifth with 17,573 restrictions.
Meanwhile, North Dakota, Idaho and South Dakota ranked among the states with the least beer regulations, with North Dakota having 2,936, Idaho having 2,450 and South Dakota having 1,177.
“There’s a lot of regulations standing between your Corona-and-lime and a good time this Cinco de Mayo,” Dustin Chambers, co-author of the study and Salisbury University Economics Professor, explained in a statement. “Even though the headlines show many people have been drinking through the pandemic, the reality is many breweries have been struggling. If we removed some unnecessary regulation, more of our local breweries across the country would be in a better spot.”
While alcohol sales rose as many Americans found themselves quarantined at home in 2020, spending their days binge watching television shows and drinking to pass the time, many smaller and independent beer breweries and distilleries were left seeing their sales fall as a result of shutdowns.
A survey conducted by the Brewers Association found that smaller craft breweries experienced seeing a 70% loss of alcohol sales due to the pandemic.
The beer industry, which employed over 2.1 million people, was heavily impacted by the coronavirus pandemic, like many other industries. As a result of the pandemic, more than 568,000 jobs in the beer industry were lost along with a $20 billion loss in beer sales, according to data from the Beer Institute.
Many distilleries, breweries, and beer suppliers reported having an excess of beer products just sitting on their premises due to the shutdowns and quarantines last spring. Due to the perishable nature of beer, these places were faced with the difficult decision of having to dump unsold beer.
Minnesota started out with 39 craft breweries, seeing this number more than triple to 183 craft breweries in the state by 2019, according to data released by the University of Minnesota Extension. In 2019, the craft brewing industry in the state, which employed 8,435 workers, brought in $1.0 billion for the state.
As a result of the coronavirus pandemic, the state of Minnesota lost $186.6 million in revenue from the craft brewing industry, which relies heavily on in-person sales.
Additionally, according to the data 1,050 jobs in the craft brewing industry were affected as a result.
Gov. Tim Walz announced on April 1 that certain COVID-19 guidelines in place would start to be rolled back, allowing restaurants, bars, gyms and fitness centers to raise their maximum occupancy limit. Outdoor venues are also allowed to raise their occupancy levels, according to Walz’s announcement.