07 April 2010

Garage Wine and Beer

Starting a winery or brewery can be quite capital intensive. Yet, the last few years have seen nearly 1,000 new wineries and breweries per year. Some of these wineries and breweries are using custom crush or contract arrangements, or even alternating winemaking or brewing arrangements. Some are adding restaurants alongside their production for another income stream. And, some are choosing to go “pico,” with hopeful expansion plans.

The first problem most home winemakers and brewers aspiring to sell their wine and beer usually encounter is where to start production. People first consider their garages or basements to start production, as 15 to 20 years ago this was how many aspiring winemakers and brewers started. It’s not so easy these days.

The federal rules prohibit a winery or brewery in a dwelling house. So, you cannot make wine or beer out of your home for sale. Wine making and brewing out of a garage or basement is a grey area. Depending on what the state allows, the TTB may, or may not, approve garage or basement production for sale. In order for a garage winery or brewery to be approved, several steps must first be met.

First, the basement or garage must be zoned for the winery or brewery use. This usually means that the area must be zoned for industrial, light industrial, or agricultural uses (depending on the municipality). In some cases it is possible to get a variance from the zoning restrictions. In most cases, however, if an area is zoned as residential, it is highly unlikely that a variance for a winery or brewery will be granted.

Second, the basement or garage must typically be detached from the house, or at least have a separate entrance. Wineries and breweries need to submit a diagram of the property and production premises along with their applications. The diagram would need to show where the winery or brewery is located on the property and its relation to the house. Of course, simply providing all of the necessary information does not mean that your garage/basement production facility will be approved. If the garage is attached to the home, the TTB has stated that it is unlikely that it will approve the use.

When looking at locations for production operations, it is important to consider local zoning issues. First, be familiar with what kind of use a winery or brewery is considered. In some localities it might be considered an industrial use, in others, merely an agricultural or a commercial use. Second, be familiar with the approved zoning for the location you are interested in. If necessary, obtain a variance before even beginning the application process. The TTB and state alcohol control division are unlikely to approve any application if the location is not properly zoned.
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