Breweries and wineries sue Alaska alcohol board, alleging that restrictions amount to unfair treatment

A small group of Alaska breweries and wineries filed a lawsuit on Tuesday against the Alaska Alcoholic Beverage Control Board, alleging that entertainment restrictions they face put them at an unconstitutional disadvantage against bars and other establishments.

The 21-page lawsuit filed in Anchorage Superior Court threatens to continue the conflict between businesses that an alcohol bill approved by the Legislature in 2022 was designed to end. That bill loosened some restrictions on Jan. 1 for taprooms at breweries and distilleries, including allowing them to hold a limited number of live events after previously being barred from doing so.

The case also names Joan Wilson, director of the Alaska Alcohol and Marijuana Control Office, as a defendant.

Wilson said she could not comment on the litigation. Alaska Department of Law spokeswoman Patty Sullivan said the department has not yet been served with the complaint. “Once we have, we will answer within the time set by the court rules,” Sullivan said.

Plaintiff Zip Kombucha, an Anchorage company, can’t offer live entertainment and games at its venue without first receiving a permit from the office’s director, and paying at least a $100 application fee and meeting other requirements, the lawsuit says.

Also, licensees are limited to four entertainment events annually in the tasting rooms where alcohol is served, the lawsuit says.

Zip Kombucha, located in South Anchorage, makes alcoholic and nonalcoholic kombucha — a beverage made from fermented tea that requires a brewery license — and cider, which requires a winery license.

“Bars, restaurants, and campus pubs need not alert — much less obtain permission from — defendants before they can host live music and other entertainment on their premises,” the lawsuit says.

“In fact, these three classes of alcohol retail licensees are not required to obtain a (Live Music or Entertainment) Permit,” the lawsuit says. “Nor do they face restrictions on the number of entertainment events they may provide for their customers.”

Zip Kombucha co-owner Jessie Janes said he can’t even hold weekly trivia events without the permit. He’d like to do that and offer other events without applying for permission from the government, to be on par with bars, he said in an interview Wednesday.

The other plaintiffs in the case are Grace Ridge Brewing Co. and Sweetgale Meadworks & Cider House, both based in Homer.

The lawsuit was filed by Pacific Legal Foundation, a national law firm that says it “defends Americans’ liberties when threatened by government overreach and abuse.” The law firm says on its website that it’s taking on the case at no charge.

“Alaska kneecaps breweries and wineries in order to protect bars from competition. Restricting them from providing entertainment — including live music, TV, games, karaoke, and contests — does nothing to advance public health, safety, or welfare,” the Pacific Legal Foundation says on its website.

The plaintiffs want to provide live music and entertainment “consistent with their free speech and equal protection rights under the federal and state constitutions,” the lawsuit says.

Wilson, with the Alcohol and Marijuana Control Office, said she’s issued three live music or entertainment permits in a timely manner since the allowance went into effect Jan. 1. She expects to see significantly more applications from companies as business and tourism increases in summer, she said.

[Previous coverage: Major changes to Alaska’s alcohol industry take effect in 2024]

Lee Ellis, board president for the Brewers Guild of Alaska and president of Midnight Sun Brewing, said the guild doesn’t see a lawsuit as the right approach to gaining more privileges.

“I won’t say I’m supportive of only having four live events. I don’t think the Brewers Guild is satisfied with that,” he said. “But trying to litigate this would not be the route we would generally like to take in order to see enhancement of our privileges. We’re more interested in continuing to work with the Legislature and administration to open our businesses to more opportunities.”

He said he’s looking forward to seeing how the arguments in the case play out.

“Under the 21st Amendment, states have the right to regulate alcohol as they see fit as long as it does not interfere with interstate commerce,” he said. “So that leaves states a lot of latitude for how they decide to do it.”

Janes, with Zip Kombucha, said the loosening of the rules Jan. 1 sounded like a great olive branch for breweries. But it only provides small advantages.

The benefits included new closing times of 9 p.m., one hour later than previously allowed. He said the lawsuit is focused only on the entertainment restrictions, and does not raise arguments about the closing limits.

“I liken it to, you know, you’ve been locked in the basement for years, but you can come out for one hour a week now,” he said.