Update From Lansing: Recent Changes in Food and Alcohol Regulation

By Kate Redman

“BACKYARD” LIVESTOCK FARMS

Recently, the Michigan Commission of Agriculture made controversial changes to the protections afforded to livestock facilities in residential areas under the Right-to-Farm Act (RTFA). Opponents call fowl and claim the changes will have severe consequences for urban agriculture; proponents argue the concern is overblown and only serves to return control of backyard livestock farms to local communities.

How does the RTFA protect farmers? The RTFA provides that if farms operate in compliance with optional guidelines for farming practices, known as “Generally-Accepted Agricultural Practices” (“GAAMPs”), then farms are entitled to certain RTFA protections, including: (1) a defense against private and public nuisance suits, such as claims that the farm’s smell, noise or environmental effects interfere with a neighbor’s enjoyment of property; and (2) protection from local ordinances prohibiting conduct in compliance with GAAMPs. The RTFA only applies to “commercial” farms; however, courts have held that backyard farms selling a small amount of farm products to friends and neighbors qualify.

What changes were made? The GAAMPs for site selection and odor control for livestock facilities provide suggested setbacks and manure/odor management practices based on the size of a livestock facility and its proximity to non-farm residences. Under changes made in May, a site can no longer comply with the GAAMPs if agriculture is not permitted by right under local zoning and the site is located within 250 feet of a non-farm residence or within 1⁄4 mile of more than 13 residences (for new operations) or 20 residences (for expanding operations).

How important are the changes? Notably, the change does not prohibit or limit backyard livestock. GAAMPs are safe harbors that cannot make conduct unlawful.

Instead, the change means that –like most other land uses – backyard livestock facilities located in residential areas are now subject to local zoning and nuisance suits. However, if a local community wants to provide protection for backyard livestock, it can still choose to do so through local zoning and other ordinances.

LIQUOR LAW AND REGULATION

Changes are also afoot in Michigan liquor laws. The production, transfer, sale, and consumption of liquor, beer, and wine in Michigan are subject to a complicated matrix of rules and licenses that commentators have noted often defy logic and serve to inhibit business growth.

For example, the volume of beer a brewer can make and sell at a brewery is strictly regulated based to whom they sell their beer; whether the beer is consumed on- or off-site; and whether other alcohol is also sold there.

However, the state is buzzing with several minor but significant changes made to Michigan’s liquor laws to encourage growth of Michigan businesses, including the following:

Wine BYOB – To encourage availability of Michigan wine, establishments holding certain liquor licenses can now choose to allow customers to carry in a corked bottle of wine for consumption on-site, so long as the establishment could have legally sold the wine there. The establishment can charge an uncorking fee, and a partially consumed bottle must be “recorked” by an employee before it can be removed.

Conditional Licenses – Businesses sometimes wait months or even years to obtain approval of their liquor license by the Michigan Liquor Control Commission. Now, for $300, a business can obtain a temporary “conditional” license pending review of its application if it is applying for a transfer of an existing liquor license to sell liquor for consumption on or off premises or for a new Specialty Designated Merchant license.

Relaxed Limits for Microbreweries, Brewers, and Brewpubs – The volume limits for “microbreweries,” meaning a business selling beer from the brewery to retailers or to consumers for on- or off-site consumption, were doubled from 30,000 to 60,000 barrels per year; and microbreweries can now sell beer for on-premises consumption at multiple locations. “Brewpubs,” meaning a brewery also licensed to sell retail liquor for consumption on the premises, were previously limited to operating at two locations and producing 5,000 barrels of beer per year; now a brewpub can own an interest in up to five other brewpubs, so long as the combined production of all locations does not exceed 18,000 barrels. Finally, a “brewer,” meaning a business that manufactures and sells beer to wholesalers but does not have a microbrew license, can sell beer for on-premises consumption at two locations instead of one.

Startup Brewery Self-Distribution – A microbrewery producing less than 1,000 barrels per year can now deliver directly to a retailer for sale.

Branded Barware – Businesses can use certain promotional merchandise from alcohol producers, such as coasters, napkins and trays, but remain limited from using other more expensive merchandise unless it is purchased from the alcohol producer.

Transfer of Specialty Designated Distributor (SDD) Licenses – Licenses that allow a business to sell spirits for off-site consumption are issued based on quotas for municipalities and previously could not be transferred out of the municipality. Now, SDD licenses may be transferred anywhere within the same county. Despite these changes, not all liquor regulations are so fluid and businesses remain subject to stringent rules. For example, the Michigan Liquor Control Commission is investigating “DrinkDrivers,” a web and mobile service that allows customers to order delivery of alcohol to their homes, based on concerns that state law only allows for beer and wine deliveries. Nonetheless, spirits remain high with regard to the new laws and the future of Michigan’s burgeoning liquor industry.

Kate Redman is an attorney with Olson, Bzdok & Howard, P.C. in Traverse City.

Comments

comments