# Buying a Brewery What breweries trade for, why the federal notice has to be earned again by the buyer, and how less beer is being split across more brewers. Source: https://searchspheresource.com/guides/buying-a-brewery Last checked: 2026-10-03 ## The Notice Does Not Come With the Building A brewery is permitted to a person, not to a place. 27 CFR 25.63 is blunt about it: a person may not operate a brewery until the notice required by that subpart has been approved. On a change of proprietorship, 25.72(a) makes the outgoing brewer close out under 25.85 and requires the successor, before beginning operations, to qualify in the same manner as the proprietor of a new brewery. An [asset purchase](https://searchspheresource.com/glossary/asset-vs-stock-sale) therefore starts the qualification from the beginning, and the tanks sit idle until it clears. Buying the entity instead collapses the problem: 25.74 treats a stock sale that changes control or management as a 30-day notification. That structural choice is worth more to the timeline than anything else in the deal. ## What Breweries Trade For Breweries trade inside the marketplace's own brewery class, where sold-business quartiles ran 2.06x to 4.32x [SDE](https://searchspheresource.com/glossary/sde) from 2021 through 2025, with a median near 2.77 and an average of 3.34. The publisher describes that population as primarily locally owned small craft breweries, usually including a restaurant, taproom or pub component, so the figures cover the hybrid the trade actually is, not a pure production brewery. Anchor at the SDE end, because a [searcher](https://searchspheresource.com/glossary/searcher) buys the earnings the owner takes out. The band also hides a fall: the average multiple dropped to 1.98 in 2025 from 3.48 the year before, which the publisher puts down to an influx of very small businesses selling at much lower multiples. ## More Brewers Splitting Less Beer The federal series tells one story twice. TTB's own annual report counted 2,782 industry members in 2012 and 8,223 at the 2023 peak, then 7,343 in 2025. Production over the same period went from 196.2 million to 149.4 million, down 23.9 percent, and taxable removals fell with it. So the number of brewers is up more than one hundred and sixty percent since 2012 while the volume they divide is down nearly a quarter, and the brewer count itself has fallen nearly eleven percent in two years. The Brewers Association counted 9,724 breweries in 2025, down 2.9 percent, with craft retail dollars of 28.0 billion, or 24.8 percent of a 113 billion dollar beer market. ## Two Counts of the Same Trade, and They Disagree The trade association counts 9,724 breweries and the Census counts 5,093, a gap of nearly two to one, and the difference is definitional; neither count is wrong. The Census index puts microbreweries without a restaurant or bar in the brewery class, and sends brew pubs primarily serving alcoholic beverages, and brew pub restaurants primarily serving meals, into the food service classes instead. The sold-listing population sits closer to the association's count, because it explicitly includes the pub component. Read any per-brewery figure with that in mind: a receipts-per-establishment number from the federal file is describing a narrower business than the one on the market. ## What to Verify in Diligence A brewery's value sits in a permission you do not yet hold and stock you cannot count from the doorway. Verify: ## Financeability Notes Breweries finance under [SBA 7(a)](https://searchspheresource.com/glossary/sba-7a), and the qualification sequence is the part underwriting cares about: an asset purchase cannot operate until the successor's notice is approved, so the lender is funding a business that will be dark for a period nobody controls. Expect questions about the tanks as collateral, since brewing equipment is specialized and its resale market is thin and public. Model debt service against a [market wage](https://searchspheresource.com/glossary/market-wage) for a head brewer and a taproom manager if the seller works both, and against a volume line that the federal series says has fallen four years running, not a plan that assumes it recovers. ## Terms in This Industry - **Brewer's notice**: The federal approval a brewery operates under, issued to a person and not to a site. It is the document that decides whether a deal is an asset purchase or a stock purchase, because the two are not the same wait. On a change of proprietorship the outgoing brewer closes out and the successor has to qualify in the same manner as the proprietor of a brand new brewery, which means the tanks stand idle until the approval issues. A stock sale that changes control instead becomes a thirty-day notification. Ask when the seller's notice was last amended and what is on it, because the approved premises and the approved operations are both described in it. - **Reduced-rate barrels**: The first sixty thousand barrels a year taxed at the low rate, shared across commonly controlled brewers. The federal excise rate on the first sixty thousand barrels is a fraction of the standard one for a brewer producing under two million, which is most of the trade. The clause that catches buyers is the controlled group rule: where brewers are commonly controlled, that quantity is apportioned among them and is not granted to each. A searcher who buys a second brewery therefore splits one allowance across two breweries and finds the effective tax rate on both has moved. Model the excise line for the group you will own, not the business you are looking at. - **Taxable removals**: Beer removed from the brewery for sale or consumption, which is what the excise is paid on. Production and removals are different numbers and sellers quote whichever is larger. Beer sitting in tanks has been produced and not removed; beer poured in the taproom has been removed even though it never left the building. The federal series tracks both, and the gap between them is a working capital story: a brewery carrying a large finished inventory has already paid to make it and has not yet been paid for it. Ask for removals by month for two years, and read the taproom share against them. - **Taproom share**: The portion of revenue sold over the brewery's own bar instead of through distribution. It is the single number that decides which business is being bought. A pint poured in the taproom earns retail margin and needs no distributor; the same beer sold through a wholesaler earns a fraction of it and arrives with franchise-law obligations attached. A brewery at seventy percent taproom is a bar with a brewery behind it, and it should be underwritten on foot traffic and location. One at seventy percent distribution is a manufacturer, and its risk is a distributor agreement it may not be able to end. - **Keg float**: The brewery's kegs out in the trade, which are its property and rarely counted. Kegs cost real money and live in other people's coolers. A brewery selling through distribution has hundreds of them in the field at any moment. The float is an asset on the buyer's books that nobody can see from the doorway, and it is one of the few places in a brewery deal where a physical count is genuinely impossible. Ask for the keg purchase history, the deposit balance, and what the seller believes the annual loss rate is. - **Self-distribution allowance**: A second permit letting a brewery wholesale its own beer, capped, and lost when the owner changes. The shape is not an allowance a brewery enjoys under a line; it is a permit it goes and obtains. North Carolina states it cleanly. A brewery may obtain a malt beverage wholesaler permit to sell, deliver and ship up to fifty thousand barrels of its own beer a year to unaffiliated retailers. That authorization applies only to a brewery selling fewer than a hundred thousand barrels a year in total. Two numbers doing different jobs, and the second one removes the permit instead of capping it. What matters at closing is severe: all permits for an establishment automatically expire and are surrendered when ownership changes, and a twenty-five percent stake moving does the same thing, which is what a staged buyout walks into. A successor with use and control of the premises may operate on the predecessor's permits after giving notice before it starts, and must apply within sixty days. - **Unaccounted-for beer**: Beer gone from the brewery with no removal behind it, and the tax stands until the loss is proved. Taxable removals names what the excise is paid on and treats the gap between production and removals as working capital. Beer that leaves inventory without being a removal is taxed anyway unless the brewer proves the loss, in writing, on learning of it. Theft is the worst case, because the tax is collected unless the brewer shows the theft happened before removal and without negligence by anyone in the chain. A claim filed more than six months after the loss is not allowed at all. So a brewery with loose tank-to-package reconciliation carries an excise liability nobody has invoiced. Read two years of federal brewer's reports against the production records, and ask which losses were written to the bureau and which claims were filed, with dates. - **Distributor franchise**: In some states, a brewery's tie to its distributor, which it cannot end without cause or a statutory price. Taproom share warns of a distributor agreement the brewery may not be able to end. In Ohio the reason is a franchise act covering any contract or other legal device between brewer and distributor, and ninety days of distributing without a written contract creates one. Without the distributor's consent, no brewer may cancel or refuse to renew except for just cause and on sixty days' written notice. Handing a brand to an affiliate the brewer controls is not just cause. A successor that acquires all or substantially all of the brewery's stock or assets gets one opening: ninety days to end a distributor's franchise for the acquired brand. It must then buy back that distributor's inventory at laid-in cost and pay the diminished value of its business, goodwill included, before the territory can go to anyone else. Miss the window and the franchise binds the buyer. Washington leaves breweries under two hundred thousand barrels a year outside its act altogether. Map every distributor to its state before pricing any change of channel. ## What the Data Says - TTB's annual beer report counts 7,343 industry members in 2025, down from a peak of 8,223 in 2023 and up from 2,782 in 2012, while production fell from 196.2 million in 2012 to 149.4 million in 2025. (TTB Beer National Report, annual series: https://www.ttb.gov/system/files/2025-05/Beer_National_Report_Annual_csv.csv) - The Brewers Association counted 9,724 US breweries in 2025, down 2.9 percent, and reports that craft retail dollar sales fell 2.8 percent to 28.0 billion, 24.8 percent of a 113 billion dollar beer market. (Brewers Association national beer statistics: https://www.brewersassociation.org/statistics-and-data/national-beer-stats/) - The 2022 Economic Census counts 5,093 brewery establishments across 4,857 firms, averaging 5.8 million dollars of receipts and about eighteen employees each, a narrower class than the association's because brew pubs are counted under food service. (2022 Economic Census, NAICS 312120 Breweries: https://data.census.gov/table/ECNBASIC2022.EC2231BASIC?n=312120) ## Who Else Is Buying in This Industry No consolidator is confirmed in this trade from a primary source. Silence means unverified, not uncontested: check the current list before assuming a quiet market. ## What It Costs to Replace the Owner The multiples are quoted on SDE, which adds the owner's pay back into earnings, so they hold only if you do the owner's job. For this trade the replacement is usually the plant supervisor over the machines and the crew, paid a median of $74,450 a year nationally; at a 3x multiple that wage takes about $223,350 off what the business is worth to you. First-line supervisors of production and operating workers, BLS Occupational Employment and Wage Statistics (2025), national, all industries, before payroll taxes and benefits (https://searchspheresource.com/data/manager-wages). ## The Numbers That Run This Business - Taproom revenue share - Taxable removals by month - Barrels against tank capacity - Keg float in the field - Distributor depletions Site index for machines: https://searchspheresource.com/llms.txt