Daugaard looks to let breweries self-distribute

RAPID CITY, S.D. (KOTA TV) - Governor Dennis Daugaard said Tuesday in his State of the State address that he supports legislation to allow breweries to self-distribute.

For breweries like Hay Camp, it's good news.

"So with South Dakota giving us the ability to sell straight to a retailer, it's going open the door for us and improve growth," said Sam Papendick, Owner of Hay Camp.

15 craft breweries are located in South Dakota and those businesses mean $209 million in economic impact, according the the Brewers Association. That sounds like a lot, but it ranks 48th in the country.
When we look closer, per capita South Dakota breweries ranks 18th with economic impact.

"So we have a lot of breweries per people, with a lot of room to grow," said Papendick.

But the state also ranks dead last in the number of barrels produced per year, with a cap of 5,000 per brewery, something Daugaard wants to increase. In Montana, breweries can produce 60,000 barrels a year.

"If we are behind on that, now you have Nebraska, North Dakota, Colorado breweries pushing into our state and there may not be room for South Dakota breweries to grow into that," said Papendick.

Papendick says for every 1% the brewery industry grows in South Dakota, that's at least $500,000 that stays in the state. Independent Ale House, a retailer, says it will keep money local.

"All of that money will be coming back to the brewery and give them more money to hire more people, more people live here, so it's really going to bring more money locally," said Justin Henrichsen, Owner of Independent Ale House.

For distributors, it could be another story. They could potentially lose draft lines. We did reach out to distributors in the area, but they didn't want to comment on the topic. One said it's too early to tell how it could impact their business.