This section clarifies the language for contract production
found in RCW 66.24.244. For the purposes of
this section, contract production is when one microbrewer, referred to as the
"contractor," produces and packages beer for another microbrewer, referred to
as the "contractee." This beer is referred to as the "product."
(1) The contractee is the product owner. As
such, the contractee may distribute and retail the product.
(2) The contractor is required to physically
transport all contracted product to the contractee. The contractor is not
allowed to distribute or retail the product.
(3) The contractor must submit a copy of the
contract to the board prior to production. Any changes in the contract must
also be submitted to the board prior to subsequent production. The board may
require additional information.
(4)
The contractor is required to obtain federal label approval, and the contractee
is required to obtain state label approval.
(5) State taxes listed under
RCW
66.24.290.
(a) The contractor is not responsible for the
taxes.
(b) The contractee is
responsible for the taxes when the contractee is acting as its own distributor
or retailer for the product.
(c)
When the contractee uses a distributor to distribute the product, then the
distributor is responsible for the taxes.
(6) Maintaining qualification as a
microbrewery. Each microbrewery, whether in the capacity of a contractor or
contractee, is allowed to produce under sixty thousand barrels of total product
per year. Total product, in this instance, includes product (a) owned and
produced by the microbrewery; (b) owned by the microbrewery but produced by
another microbrewery; and (c) produced by the microbrewery on behalf of another
microbrewery.
(7) Reporting and
recordkeeping.
(a) The contractor must include
the product produced when it reports its monthly production to the
board.
(b) The contractee must
include the sale of the product when it submits its monthly sales report to the
board. The board may also require the contractee to include the product when
the contractee reports its monthly production to the board.
(c) The contractor's and the contractee's
recordkeeping documents must include the product information for each contract.
The information must show the quantities produced.