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Sun King to put limits on distribution to avoid state cap

December 12, 2014

Sun King Brewing Co. said it plans to quit distributing beer outside of the Indianapolis metropolitan area because it is close to hitting the state’s 30,000-barrel-a-year production limit at its downtown brewery.

“Sun King is in the unfortunate position of being forced to terminate our distribution agreements, which currently allow individuals outside of the greater Indianapolis area and Bloomington to enjoy Sun King beer,” owner Clay Robinson said Friday in an email to IBJ. “At our current rate of production, we cannot possibly sustain our shipments to distributors in 2015 without compromising our ability to operate our Tasting Room and self-distribute our beer in central Indiana.”

Sun King told IBJ in August that it was on pace to produce 28,500 barrels of beer this year at its facility at 135 N. College Avenue, up from 5,000 in 2009, the year the company was founded. A barrel is equal to two 15.5-gallon kegs.

Small breweries are allowed to produce more than 30,000 barrels, but only as long as any amount over 30,000 barrels is distributed out of state. Sun King does not distribute its products beyond Indiana’s borders.

Sun King uses three distributors in outlying areas of Indiana: Monarch/World Class Beverages distributes Sun King in 18 counties to the north of metro Indianapolis; Indiana Beverages covers 24 counties farther north; and North Vernon Beverages distributes in 11 counties on the Interstate 65 corridor down to Clarksville.

There are 28 counties out of 92 in Indiana where Sun King beer isn't sold.

The decision to limit distribution will not affect Sun King’s decision to open an $8.8 million brewery and tasting room along Interstate 69 in Fishers because it will be considered a separate facility with its own 30-barrel limit.

The Fishers facility, however, isn’t expected to open until late 2015 and Sun King's owners aren't counting on it to provide large volumes of beer, Robinson said.

The latest plan calls for a brewery and tap room with a 10-barrel brewing system that can produce about 5,000 barrels per year.

"It will allow us the opportunity to make small-batch beers and experiment in a way we can't do as much downtown due to the growing demand for our house and seasonal beers," Robinson said in the email.

Robinson said Sun King would prefer to raise production downtown because there is room to grow in the current brewery.

Sun King is considering selling across state borders. It’s also gearing up to lobby lawmakers during their upcoming session to raise the 30,000-barrel limit. The federal government defines small breweries as producing fewer than 60,000 barrels annually, or double what Indiana allows.

“We are hopeful that Indiana laws will be updated to increase the current limit and allow us to produce and distribute more beer in Indiana,” Robinson wrote. “The Brewers of Indiana Guild will be lobbying for this increase at the next legislative session, and this change will help not only Sun King, but 3 Floyds, Upland and eventually many other Indiana breweries as local craft beer sales continue to grow throughout Indiana.”


 

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