Staff was approached by a small brewer with a tap room asking about the established liquor license fees. Upon review, it appears as though Shakopee's fees for small brewer's with tap rooms are out of alignment with the market in the Twin Cities. See attachment Metro Small Brewer/Taproom Comparison for a sampling of current fees for such establishments.

Other communities with lower fees were contacted to understand why they charge a lower fee for small breweries/tap rooms, since they serve alcohol the same as any other bar or restaurant. The primary reasons for having a lower fee for these establishments are:

1. Small breweries have limited options. Small breweries/taprooms are only allowed to sell beer that they manufacture and are not allowed to bring in other beers, intoxicating liquors or wines from other manufacturers.

2. Market comparisons.Other communities established their fees to be competitive in the metro area. Chaska recently amended their fee schedule based on market comparison when a new small brewer/taproom was opened in their community.

3. Economic Development. Small breweries are a economic development on both the manufacturing and retail side.

This amendment would be retroactive to January 1, 2019 and effective for licenses issued in 2019.