- Associated Press - Wednesday, March 11, 2015

PHOENIX (AP) - The Arizona Senate on Wednesday voted for a compromise bill that allows large microbreweries to keep running their restaurants even as they grow into large beer producers.

The legislation by Sen. Kelli Ward, R-Lake Havasu City, passed on a 28-1 vote and now heads to the House.

A floor amendment simplified Ward’s earlier proposal by removing a provision that forced microbreweries that exceeded the old production cap of 1.2 million gallons of beer to get a producer’s license. The new version allows them to keep their microbrewery licenses until they produce 6.2 million gallons of beer a year and have up to seven retail locations.

The bill was one of the more contentious this session, pitting powerful business interests against each other.

Ward’s amendment was offered by Republican Sen. Steve Smith of Maricopa, who had been pushing a competing bill.

The bill is designed to allow growing breweries retain their restaurants even as they distribute beer to other locations. Just one microbrewery, Four Peaks Brewing Company in Tempe, is nearing the old limit. Four Peaks has gotten the cap changed twice previously to allow it to keep its microbrewery license and still own and run its restaurants.

A hearing last month was packed with small brewery owners who hope to eventually meet Four Peaks’ success.

“It also has given incentive for all these small guys to know that they can grow without being punished,” Ward said in an interview. “They can become super-successful. They can compete with out-of-state breweries.”

The revised bill keeps in place the current three-tier system of alcohol regulation, where producers, distributors and retailers are separated. Four Peaks will be required to distribute beer it sells outside its restaurants through normal beer distributors.

Smith said the compromise “truly is a meeting of very collective minds, and this agreement reflects unanimous agreement.”

“It more or less maintains the three-tiered system but nonetheless allows growth,” Smith said. “Folks, I think it’s safe to say the beer battle has subsided.”

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