Sandhills Brewing, a Hutchinson microbrewery, could lose its liquor license because of a state law requiring 30% of profits to be from food. (Getty Images)
A Hutchinson microbrewery sold more than $16,000 worth of hot dogs and other food Tuesday night in defiance of antiquated Kansas liquor laws.
With another $13,000 worth of food sales by the end of the month, the business can stay open.
Sandhills Brewing, a microbrewery with two taprooms, is in danger of losing its liquor license for the Hutchinson taproom because of Reno County requirements that at least 30% in annual profit comes from food sales. Without the liquor license, the taproom would be forced to close.
Pippin Williamson, who founded Sandhills Brewing with his brother and manages the Hutchinson location, said he submitted the liquor license renewal request in early September. The license expires on Oct. 18, and the renewal process usually takes a month.
For microbreweries like his, there are few good licensing options available. Opting to get licensed as a drinking establishment, which comes with the 30% food sale rule, was Williamson’s best option, he said.
The other choices were to license as a private club, which would require the business to operate on a membership basis and track customer information, or to get a cereal malt beverage license, which would only allow the business to sell beer containing less than 4% alcohol.
“It’s just incompatible with us as a business,” he said about the private club license. “If we were going to lose our liquor license, we would have opted to not not go that route, even if it was our only option.”
The Kansas Department of Alcohol and Beverage Control responded to the license renewal by asking the business to submit a plan for increasing food sales, which the brewery complied with. But the state agency informed Williamson on Monday that the plan was denied and the license wouldn’t be renewed.
Williamson said he was blindsided by the news, especially since the license was renewed two years ago with no issues, despite having only 20% in food sales profits at the time.
“The biggest thing that happened that caused this to be such a shock: It’s not so much that they decided to enforce the rule which they had previously chosen to not enforce; it’s that they enforced it and gave absolutely no recourse whatsoever,” Williamson said.
But on Tuesday, half an hour before the taproom opened for the night, he and other staff members realized there was one way they could still manage to get their license renewed.
If the brewery managed to boost its food sales before the end of September, enough to meet the 30% requirement, Williamson could resubmit the license renewal request in October with the new food sale numbers and meet all requirements.
The taproom sells items like personal pizzas, beef jerky, chips and other snacks. In the past 12 months, the business had sold about $22,500 in food items. He initially figured he would have to sell around $14,700 in little more than a week.
“That seemed a little bit like a Hail Mary, but theoretically doable,” Williamson said.
After sending out an email about the taproom’s plight, brewery staff bought hundreds of hot dogs and prepared to bake as many pizzas as possible. When they opened their doors for the night, Williamson said, the community turnout was unbelievable. In five hours, the brewery sold $16,710 in food.
“I’m a little tired,” Williamson said. “I haven’t slept very much but I feel great. The outpouring of support and generosity from our community and our customers was overwhelming. Not only did we have people come out and vote with their wallets and their presence and their support, we had people that came out and volunteered hours of their time.”
“We sold basically every single food item that we had in the building,” he added.
He thought the taproom had met its food sales requirements for the year, but he calculated incorrectly. The 30% figure is for food and alcohol sales combined. On Wednesday, he informed supporters that he is still $12,952.46 short of the amount required to stay in business.
While Williamson is happy with local support, he believes local licensing laws are overly restrictive.
Sixty-three counties in the state operate with the 30% food sales rule, according to Kansas Department of Revenue 2021 data. The restriction was put into place by a Kansas law and voted on by individual counties. For bigger drinking establishments, the 30% rule isn’t an issue, as most have full kitchens and dedicated kitchen staff.
For smaller places like Sandhills Brewing — which only has three full-time employees and three part-time employees, not counting Williamson — the rule can be destructive.
Microbreweries also face additional licensing requirements — they have to have a license to produce and sell beer to go, along with a drinking establishment license to sell the beer on premises. In 30% rule areas, microbreweries also have to have a food sales license to meet the requirements of the drinking establishment license.
Williamson said he spoke with his local state legislator, Democratic Rep. Jason Probst, about efforts to change current laws. Probst plans on addressing the issue with the Legislature.
“To me the structure and licensing and the regulatory environment for microbreweries is particularly onerous,” Probst said. “Especially when that’s a growing industry. We’re seeing microbreweries pop up all over the state. And I think it’s an industry that we should probably look at how to knock down some of those barriers so that they don’t have those restrictions in place that are standing in the way of their growth.”
Correction: An earlier version of this story said the microbrewery had sold enough food to stay open. The story was updated after Williamson learned he had miscalculated.
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