Hate local craft beer law? Cideries are even more complicated

Two Georgia cideries operate under vastly different rules

Photograph courtesy of Urban Tree Cidery

Before last September, not a single hard apple cidery operated in metro Atlanta. Now, there are two, Treehorn Cider and Urban Tree Cidery, both of which hope to sell everything from traditional English dry ciders to potions spiced with ginger or chiles or even aged in rum barrels. Their owners see each other as competitors. So does the federal government, which subjects them to the same laws. But in the eyes of the state, they’re as different as porters and pinot noir.

Treehorn, based out of Marietta, is considered under state law to be a craft brewery, an industry subject to one of the nation’s most restrictive distribution laws. Like other local breweries, Treehorn can’t directly sell a glass of cider to its customers. It also can’t produce any cider greater than 6% ABV, which would go beyond the state’s definition of cider as a ‘malt beverage’ (more on that bizarreness in a minute).

Twelve miles away on Howell Mill Road near Atlanta’s Westside, however, the recently-opened Urban Tree Cidery is subject to an entirely different set of state regulations. In their taproom, they can sell pints of hard cider to their visitors. They can sell 750 ml. bottles to go, priced at up to $15 each. If they wanted, they could even brew cider that has an ABV higher than 7 percent, known as “apple wine,” without restriction. They can also sell local craft beer and Georgian-produced whiskey, rum, vodka and gin. With a full liquor license, Urban Tree Cidery can essentially act like a full bar, mixing $11 cider cocktails for the Midtown after-work crowd.

In a state with such restrictive alcohol law, the differences are unusually stark. The legal groundwork behind those differences is even more surprising. Treehorn has the same license as a brewery, thanks to how the Georgia Department of Revenue defines cider: “‘Hard cider’ means an alcoholic beverage obtained by the fermentation of the juice of apples, containing not more than 6 percent alcohol by volume, including, but not limited to flavored or carbonated cider. For purposes of this title, hard cider shall be deemed a malt beverage.” If the word “malt” seems odd or out of place, it’s because it is. Malt isn’t used to make cider.

Ciderists Mallory Law and Andrew Wheeler
Ciderists Mallory Law and Andrew Wheeler

Photograph courtesy of Treehorn Cider

On the other hand, Urban Tree operates under a “Georgia Farm Winery” license. Owners Tim and Maria Resuta qualified for the license because Tim manages a North Georgian orchard that could provide in-state apples. As a Farm Winery, the cidery can effectively bypass the restrictions Treehorn must face if it gets more than 40 percent of its juice from its orchard. In doing so, the cidery capitalizes on laws that have been in place for decades to support the state’s wine industry. “Hard cider is simply complicated all the way up to the federal level,” says attorney Kevin Leff of Sard & Leff LLC, who represents Urban Tree with a specialty in winery and cidery law. “That one sentence, that hard cider ‘shall be deemed a malt beverage,’ has a huge effect.”

Leff has long known that cideries could potentially exploit the Farm Winery loophole. Now that the cider business has ripened—cider market volume sales rose from 4.5 million cases sold in 2010 to 23.2 million in 2014—it seems Urban Tree simply picked the right time to get into business. By the end of the year, a new federal law, the CIDER Act, will raise the maximum ABV of “hard cider” to 8.5%. Combined with the ability to sell directly to consumers, Urban Tree has a built-in competitive advantage over its only local competitor. “The fact that most of the cideries are seen as breweries in the eyes of state law is just a fiction created by the regulation,” Leff said. “But if you can meet the higher-level test of being engaged in the agricultural produce of apples, you can fit into this Farm Winery definition that was perhaps never intended for a cidery, because Georgia never contemplated it that way.”

Treehorn could seek a Georgia Farm Winery license to level the playing field, but it’s not a financial reality. “We would love to do that, but at the moment it’s just beyond what we could do financially,” says Treehorn co-founder Andrew Wheeler. “There are a lot of limitations to how feasible it would be for us, because a certain percentage of juice has to come from that farm. And with our planned production expansion over the next couple of years, we would have to buy a pretty large orchard to be able to sustain that long-term.”

Wheeler doesn’t begrudge the Howell Mill Road cidery for playing by more beneficial rules. Rather, he calls for the same reforms to state law currently sought by the Georgia Craft Brewer’s Guild, the lobbying organization for the state’s small brewers. He believes that reforms for craft beer brewers will minimize the difference in how the law treats Urban Tree and Treehorn. “Good for them for finding a way around the difficult regulations on cider,” Wheeler says. “But at the same time, we’re really hamstrung by the state because we’re capped at 6% ABV and can’t even make high-gravity ciders. The restrictions on us are significantly more stringent, even compared to the local breweries.”

With other potential cideries looking to open—Atlanta Cider Co. applied for a trademark at the end of last year—the question now is whether the state intends on clarifying its position for an industry that’s just getting started.