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Honolulu Craft Breweries Feel Impacts Of Bar Shutdown

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Many local businesses have been impacted by the COVID-19 pandemic. In Honolulu, bars and restaurants are among the hardest hit, and that is having a domino effect on local craft breweries.

Honolulu bars have been closed for two weeks. Mayor Kirk Caldwell shut them down to help curb the city's rising COVID-19 cases. At the same time, liquor inspectors were given more time to develop a better enforcement plan, and ensure every bar is complying with the city's safety mandates.

The latest shutdown is impacting local establishments that survived the initial lockdown in March. But it's also having a ripple effect on local craft breweries, which had a nearly $300 million economic impact on the state in 2018.

"We distribute to a bunch of hotels and a bunch of restaurants and a bunch of bars," said Steve Haumschild, owner of Lanikai Brewing Company.

He said many of his customers have been impacted in the pandemic, including from the tourism downturn. "So our overall distribution is a fraction of what it was before."

During the height of the pandemic, Haumschild says his business continued to brew and bottle beer. But 95% of his business relies on sales at his restaurant in Kailua, which includes food and beer carryout sales.

While most craft breweries rely on their own locations for the bulk of their profits, distributing to bars and restaurants are still an important revenue stream in the COVID-era.

"Feast or famine. You'll take anything you can get," said Haumschild. "So even if that's one-tenth of what that bar would normally order, you're thankful to be able to get that business."

Haumschild says his business is nowhere close to making what it used to before the pandemic, and every penny has gone to keeping his employees working, and keeping the business alive.

But when an island-wide shutdown of bars took effect in late July after COVID clusters were tied to two establishments, it shocked Haumschild.

He says he knows the bars that carry his beer invested time and money to ensure they met the city's rules. And he said he also took extensive measures to keep his customers and staff safe. Athough Haumschild's business is different, the shutdown impacted all of their businesses.

"Breweries, in general, don't necessarily have issues with people getting too inebriated and managing their social distancing effectively," he said. "It was just devastating that they started lumping breweries into bars, and started the brewery shutdown as of last weekend."

The city further implemented a 10 p.m. cutoff time for alcohol sales at restaurants, with the aim to prevent bars from skirting the three-week shutdown by selling food. But Haumschild says he doesn't understand what drove Caldwell's decision to close brewery tap rooms and brewpubs.

Haumschild says under state law, his business is classified as a restaurant, because more than 30% of its revenues come from food. And because he's an alcohol producer and distributor, that limits him to certain classes of liquor licenses, which more closely classified his business as a restaurant than a bar.

"It's interesting that when the mayor's proclamations come out, it's not license-based on who does what, or this and that based on the liquor license," he said. "But it's being enforced somewhat that way."

That still didn't stop the city from shutting him down, along with other breweries. Haumschild says he was one of the first breweries to be told to close when the shutdown went into effect. 

"When I specifically asked, 'Okay, well, what component are we not compliant with -- so we can be compliant if you're shutting us down?' They're not answering any questions specifically. They're just saying, 'No, you're shut down. That's it.'"

Haumschild says his peers at other breweries were not given explanations either.

Earlier this week, Caldwell said liquor inspectors should tell breweries why they are being shut down. And he advises the breweries to reach out to the city through its COVID-19 hotline at 808-768-2489.

Until the shutdown is resolved, Haumschild says he is still brewing beer. His Kailua storefront is open twice a week to help sell local produce and fish.

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