Alternating Proprietorship: Washington brewer looks to Full Sail for canning capacity

Once full permits are approved, the license could allow Mac & Jack’s to brew beer at Full Sail under what is known as an Alternating Proprietorship.

“We’re really excited about the arrangement, given the quality of Full Sail and its capacity, which we just don’t have, and its high level of sustainability both in the brewing system and laboratory,” said Mac Rankin, co-founder of Mac & Jack’s, who spoke last week to the Hood River News.

Full Sail officials declined to comment on the permit or to confirm that an Alternating Proprietorship deal is in the works, or to provide a timeline for the agreement, citing the company’s non-disclosure agreement with Mac & Jack’s.

If city and Oregon Liquor Control Commission (OLCC) permits go through, along with the agrreement with Full Sail Brewery, Mac & Jack’s will brew and can two IPAs and a pale ale at Full Sail Brewery.

The OLCC permit approved last week makes no mention of Alternating Proprietorship, and does not mention Full Sail by name. Mac & Jack’s is listed under “Trade Name customers will see” and the business address listed on the next line is 506 Columbia, the street address of Full Sail pub and brewery. (Its business offices are located at 408 Columbia.)

Both parties must also gain Alcohol and Tobacco Trade and Tax Bureau (TTB) approval, following local approval.

Under an alternative proprietorship, one brewery provides all its facilities to another, with the second brewery essentially owning the brewery for the established time period, according to Rankin, who in 1993 founded the Washington brewery and its tap room in Redmond with Jack Schropp.

A “bugaboo,” as Rankin termed it — that the two breweries have existing pub facilities, in Redmond and Hood River — is something the parties need to work out with OLCC.

In the past, Full Sail has done contract brewing with Miller Brewing at the Hood River facility.

However, an Alternating Properietorship is a more comprehensive business agreement.

(See sidebar, below, for definitions.)

Rankin put it this way: “We take over the brewery during that specified time, we own all the material for brewing during that time within the brewery, and are responsible for taxes and raw materials.”

The alternating proprietorship will enable Mac & Jack’s to expand production of its IPA and pale ale from 5,000 cases a year to 100,000 or more, according to Rankin.

Mac & Jack’s began as a home brewery in the early 1990s by Rankin and Schropp. The two brewed in Schropp’s garage until 1997, when the operation was moved to a former transmission shop in a Redmond business park.

In 2001, the brewery produced 24,000 barrels for sale in Washington, Oregon, and Idaho. By 2010, the Brewers Association ranked Mac & Jack’s the 39th largest craft brewery in the country by volume sold.

Mac & Jack’s is not a total newcomer to the area: The brewerys’ flagship ale, African Amber, is a mainstay at many local establishments.

The county is home to six breweries with production and pub facilities including five within the city limits: Big Horse, Double Mountain, Ferment, Full Sail, and pFriem in Hood River, Thunder Island in Cascade Locks, Solera in Parkdale, and Logsdon Farmhouse (production only) near Odell.