Yalobusha Brewery Company Still Fighting Prohibition Laws

Andy O’Bryan, owner of Yalobusha Brewery Company

Prohibition may have ended in 1933, but alcohol laws still prevent Mississippi breweries from selling beer directly from the brewery.

Yalobusha Brewery Co. owner Andy O’Bryan always dreamed of owning his own brewpub. In 2009, Andy O’Bryan wanted to open a brewpub in Oxford. He wrote a business plan and started talking to banks in order to make his life-long dream come true, but his dream would be crushed due to laws restricting brewpubs in Mississippi.

“I saw horrid, horrid laws on brewpubs in the state,” O’Bryan said.

Brewpubs, also known as microbreweries, are breweries that are usually independently owned and produce a much smaller amount of beer than large-scale corporate breweries. Many people refer to the beer that is produced in microbreweries as “craft beer,” which has become very popular among the South.

O’Bryan put his dream to rest and began reaching out to other microbreweries in the United States. He wanted feedback on how to run a factory since he would not be able to open his own brewpub in Mississippi.

“I had a set of about 20 questions that I would send these guys, and I would ask them ‘Hey, would you mind if I spent an afternoon, and I’ll work for free in your brewery so I can get a feel of the layout and interview employees?’” O’Bryan said. “I never asked that question and was turned down.”

Brewing is one of the most collaborative businesses in the United States. The breweries’ owners that O’Bryan reached out to were more than willing to help him understand how the business works.

“Every craft brewery in the United States combined is only 14 percent of the market,” O’Bryan said.

Microbreweries are not competing with each other. Instead, they are collectively competing with foreign owned breweries in the United States such as Miller Brewing Co. and Coors Brewing Co.

“We have a few very highly skilled people,” O’Bryan said. “Other than that, we can hire people right off the street in Water Valley and train them on everything they need to do right out of the gate. They don’t need to have any previous experience, and all they need to do is show up and work hard.”

However, the Mississippi Code of 1972 prohibits manufacturers of light wines or beer from acting as wholesalers or distributors.

“It’s still this way,” O’Bryan said. “You’re spending an incredible amount of money on the build out, but you can only sell it on location. Whereas if you open a factory, like we’ve done in Water Valley, you can’t sell direct, but you can sell at gas stations, grocery stores and restaurants.“

Mississippi, Alabama, Florida and Missouri are the only states that have restrictions with direct sales, also known as “on-premise consumptions sales” in the legal form. Most of the states that allow direct sales require a license or permit to allow breweries to sell directly to consumers and avoid selling through distributors. O’Bryan and many other Mississippi brewery owners believe that Mississippi needs a provision that allows a certain percentage of sales to be direct at a brewery and a certain percentage of sales through distributors.

“You go to any state where breweries have direct sale provisions, even Louisiana where it’s only 10 percent of their volume, and they’re growing four to six times faster than breweries in Mississippi, including us,” O’Bryan said. “We sell to a distributor; they make a margin on it. Then they sale to a retailer, and they make a margin on it. So, if we were to sell 10 percent of our volume direct, we would make more money on it.”

Mississippi brewery owners took action by creating the Microbrewery Modernization Act of 2015. It stated that a permitted beer manufacturer who operates a brewery may sell limited amounts of beer on the brewery’s premise. However, the bill died in committee in February, leaving Mississippi breweries the runt in the South’s brewery litter.

“Every state around us has a direct sale provision,” O’Bryan said. “So, they’re able to sell it to a distributor, sell it direct and in their own state. Then they’re able to ship it over to Mississippi and compete directly with us for the limited number of tap handles and placements in our state.”

Operations manager of Yalobusha Brewery Co., John Cofer, believes that changing the law would not have affected distributers nearly as bad as it hurts their brewery.

“The effect it will have on the distributors is very small because two percent of the beer consumed in Mississippi is made in Mississippi,” Cofer said. “So, we’re talking very small effect,” Cofer said. “If anything (distributers are) going to grow.”

Yalobusha Brewery Co. is located at 102 Main St., Water Valley, MS 38965. Tours are $10 a person with a tasting included on Fridays from 4 -8 p.m. No reservations are required to take a tour of the factory.

Merrill Robinson is a senior print journalism major at the Meek School of Journalism and New Media. She can be reached at marobins@go.olemiss.edu.

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