Inside the Campaign to Modernize Illinois Beer

Image courtesy of Sketchbook Brewing

Estimated reading time: 5 minutes (1049 words)

For anyone stepping into an Illinois brewery it’s not obvious that the laws and regulations that govern the industry are almost a century old and ill-suited to the times. After all, if the beer is cold and flowing, how do off-site brewing regulations and transfer caps affect the pint in your hand?

But it is precisely these behind-the-scenes regulations that the Illinois Craft Brewers Guild are targeting in a legislative push they have termed “Modernize Illinois Craft.” The campaign has six planks: legalizing mug clubs and reward programs, legalizing craft beer donations to nonprofit organizations, eliminating burdensome reporting requirements, expanding the beer showcase permit, increasing self-distribution for Class 3 breweries, and increasing the transfer cap for Class 2 breweries. 

“We're dealing with laws written in the 1930s and then revised again in the 1980s,” said Ray Stout, executive director of the Brewers Guild. “They are regulating a system that is growing and changing and evolving. That's where we came up with the modernization language.”

To take one issue, mug clubs and other rewards programs are widespread at breweries around the state. In general, customers can buy a mug (i.e., a membership) and receive perks in return, such as discounts, early releases, merchandise, and more. As basic as this system is, it operates in a legal gray zone in Illinois. 

“There's nothing that says you can do them, but there's also nothing that says you can't do them,” says Stout. “We want to incentivize people to become return customers and come back to these breweries and spend their money there, so we are pushing for the legalization of rewards programs and clubs for alcohol.”

Stout tied the urgency of the modernization campaign to a worrying development in the Illinois brewing industry: the closure of 10 percent of the state’s breweries since 2022. 

Of the 300 or so breweries in the state, 31 have closed or are planning to close in the past 24 months. The biggest loss has sent chills through the beer world: Metropolitan Brewing in Chicago announced that it will be shuttering for good in December. 

Metropolitan’s struggles are indicative of issues within the larger industry. In a post on Facebook, the brewery said it was “unable to resolve our differences with our landlord” and was forced to close. 

The Chicago Tribune clarified that the brewery was struggling with “tepid retail sales, unsustainable debt and a yearslong rent dispute” and filed for Chapter 11 bankruptcy in October 2023. The bankruptcy filing followed an eviction attempt in early 2021. 

“We have no current plans to rebuild or revive Metropolitan Brewing in a different location,” ownership wrote on Facebook. 

Stout from the Brewers Guild emphasized that the post-pandemic business environment has not been kind to breweries. 

“The brewing industry made it out of the pandemic as one of the few industries that actually grew during Covid. But breweries took on a lot of debt during the pandemic to stay open, so we're really seeing the reckoning of that,” he said. “Brewery sales and on-premise consumption have stabilized somewhat, but below pre-pandemic levels.”

Sketchbook Brewing’s managing partner Shawn Decker (left) and head brewer and managing partner Cesar Marron (right) in front of Sketchbook’s first taproom in Evanston

Cesar Marron, head brewer and managing partner of Sketchbook Brewing in Evanston, as well as a member of the Brewers Guild board of directors, also credited the pandemic with producing the challenging environment that his brewery and others are now operating within. 

“I hate to keep bringing that back when I talk to people but the reality is the pandemic threw a huge wrench in Sketchbook and other breweries,” he said.

Sketchbook opened its Evanston taproom in 2014 and had planned to open a new location in Skokie in 2020, right as public health officials forced businesses to close. “Our business plan was very solid and boom, the pandemic came in right as we had equipment rolling into the new brewery in Skokie,” Marron said. “We held our doors open with much lower income coming in. A lot of [breweries], including Sketchbook, had to take additional loans for cash flow and other expenses.”

Given these headwinds, the Brewers Guild hopes that their legislative push will help breweries shore up their operations. “Some of the laws kind of put breweries into a mold rather that you have to follow, leaving less room for a business to be creative and say, ‘oh, you know, I'm gonna start doing XYZ tomorrow to attract more customers,’” Marron said. 

Two of the Guild’s priorities directly target a brewery’s bottom line through self-distribution and transfer caps. 

Currently, Class 3 breweries (breweries with the largest production caps) may only self-distribute up to 200 barrels of beer annually within a defined geography. The Brewers Guild wants to increase this limit to 2,500 barrels annually (one barrel is about two kegs of beer). 

Relatedly, for Class 2 breweries, which produce less beer than Class 3 breweries, the state also limits the amount of beer that can be brewed off-premise and transferred to the taproom to 1,000 barrels per year. More beer can be transferred through a distributor, which increases costs. The Brewers Guild is targeting a self-transfer cap of 4,500 barrels. 

To advance this initiative legislatively, the Brewers Guild is turning to grassroots organizing — as well as some sponsors in the statehouse. 

“We had a paper and digital petition and got 2,000 signatures on it. We've been using those in meetings to support and modernize craft beer,” Stout said. “We have thousands of advocates that love craft beer in this state and want to see it succeed and see it grow.”

Stout also cited Illinois State Representative Will Guzzardi (39th) and State Senator Cristina Castro (22nd) as taking the lead in Springfield. 

Guzzardi was the lead sponsor on HB3610, the “beer omnibus bill” that was enacted in 2019 and contained numerous provisions updating the Liquor Control Act of 1934. In the current session, Castro has introduced SB2216, which contains most of the positions staked out by the Brewers Guild. Castro’s bill has been held in the Subcommittee on Liquor since March. 

A successful campaign would see substantive changes in the law. “The mug clubs would be our number one priority, as well as the self-distribution limits for Class 3 brewers,” Stout said. 

“Things change a lot,” Marron said. “Most breweries are no longer gigantic factories. They're small, neighborhood businesses like ours.”