NORMAL — Even for a brewer/lawyer, understanding Illinois' brewery regulations can be a struggle.

"Now you're trying to get me to explain the logic behind a lot of the liquor laws in Illinois, which can be a rather challenging and mind-bending thing," said Matt Potts, a former attorney and now CEO of Destihl Brewery in Normal, with a laugh.

"Obviously a few things have changed since 1934, and liquor laws haven't evolved with the pace," he continued. "That's what I'm trying to change."

After founding Destihl in 2007, Potts found himself struggling against state laws on how much beer he could brew, how it was distributed and where it could be stored — roadblocks he and the Illinois Craft Brewers Guild have taken down statewide, paving the way for a craft brewery industry that's thrived even as other local businesses have struggled.

"I don't practice anymore, but I definitely utilize my legal background directly by being chair of the government affairs committee, actively negotiating language in the bills," said Potts. "It feels pretty cool to get things drafted in a careful way that I know protects the members of our guild."

On the surface, the changes are often basic, like giving brewers the ability to distribute their own products — Potts said that's critical to a start-up and helped Illinois go from fewer than 50 breweries in 2009 to more than 220 today — and increasing production caps from 15,000 barrels per year to 120,000, which has helped successful small breweries continue to grow.

But they all required lobbying and negotiation, he said.

"Nothing we've asked for would ever cause the sky to fall. It's about helping small business and unleashing the creative spirit of craft breweries. ... But a lot of what we've tried to do has not been loved by Illinois distributors," said Potts. "That relationship has vastly improved over the years."

Potts said the growing economic impact of craft breweries has helped them push regulations that may be unpopular with Associated Beer Distributors of Illinois (ABDI), an advocacy group for beer wholesalers, especially as more and more state legislators have seen small breweries pop up in their districts.

"I don't know if I'd call it power (shifting). People are seeing that a lot of what the craft brewery industry has been seeking over the last 10 years has not hurt the state, hurt consumers or even really hurt distributors," said Potts. "I could say we're doing them a favor, whether they view it that way or not."

ABDI could not be reached for comment. Its website notes the organization protects the "three-tier system" that funnels products from brewery to distributor to bar; that bumps up against operations like Destihl that both make and serve products directly to the public.

The regulatory changes have borne fruit in a big way in Bloomington-Normal, where Destihl has expanded from a tiny operation in a garage to a large brewery and taproom off Interstate 55 in northeast Normal. Potts said that facility would not have been possible without removing production limits.

They've also contributed to the establishment of three other local breweries: White Oak Brewing in Normal, which opened in 2015; Lil Beaver Brewery in Bloomington, which opened in January; and Keg Grove Brewery in Bloomington, which opened in June.

Brewers' latest win is a bill that lets them distribute their own products between facilities they own, cutting out a distributor and a costly, unnecessary travel process. It also frees up breweries to sell "guest" products from other breweries and to store finished products off-site.

Each of the Twin Cities' breweries said they're thrilled with the changes, including letting small breweries stock others' cider as a gluten-free option. They also free brewers to collaborate more; now when two breweries work together on a beer, they can both sell it, no matter where it was made.

"The Illinois craft beer community is more collaborative than any other industry I’ve ever experienced. This law embraces the camaraderie," said Bryan Ballard, co-owner of White Oak Brewing. "The ability to showcase each other’s talents is truly special."

Potts said he's unsure what the guild will tackle next, but he has his sights set on a previous compromise: when production caps last increased, distributors added a requirement that a single brewing business hold no more than three retail licenses, meaning Destihl — which has a brewery and two brewpubs, in Normal and Champaign — can't expand in Illinois.

"We canceled one of our projects in this state because of that law. It's hard to have a better direct proof of an adverse economic impact of a regulation," said Potts.

"I just don't like being told we can't."

Contact Derek Beigh at (309) 820-3234. Follow him on Twitter: @pg_beigh


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