The government has tightened the rules for restaurants operating microbreweries.

The Department of Industry amended the standards to establish microbreweries by restaurants last Thursday. The amended rule includes a new condition that restaurants should have a seating capacity of at least 200 people to operate microbreweries.

In September 2015, the Industrial Promotion Board under the Industry Ministry allowed restaurants to establish microbreweries for the first time. It allowed restaurants with a seating capacity of at least 20 people to operate microbreweries.

The new policy, however, has allowed such microbreweries to produce up to 3 million litres of beer annually, from an earlier limit of 2.5 million litres.

A microbrewery is a small unit that produces beer in limited quantities for captive consumption and is found mostly in establishments such as hotels and restaurants located in tourist hotspots.

In 2015, the government had for the first time decided to issue licences for operating microbreweries demanded by tourism entrepreneurs.

The amended policy has set a slew of conditions for establishing microbreweries in restaurants.

According to the standards, restaurants intending to open a microbrewery should have an area of 2,400 square feet, with a brew house area of 1,200 square feet, and an additional 900 square feet designated for utilities.

All types of waste produced by such microbreweries should be managed in an environmentally friendly manner.

Beer produced by microbreweries should have a maximum of 6 percent alcohol. In 2015, the permissible alcohol limit for beer produced by microbreweries was 7 percent.

A microbrewery should be set up within a brick-and mortar house.

The storage of raw materials, production area and storage of produced goods needs to be managed separately.

The microbrewery needs to use certified malt. In Nepali malt is to be used, microbreweries should source the malt from certified companies, the new policy said.

According to the standards, tanks and pipelines used in the microbrewery need to be of stainless steel and its boiler should be powered by electricity.

“With this development, customers will get fresh beer at low cost,” said Uddhav Dhakal, secretary at the Restaurant and Bar Association Nepal.

He said that despite the issuance of licences, restaurants have yet to produce beer on a commercial scale.

According to the new policy, water used by microbreweries needs to meet the quality standards determined by the Department of Food Technology and Quality Control, the country’s quality watchdog.

Sugar should not be mixed as an adjunct.

While producing beer, microbreweries need to get quality assurance certificates from alcohol technologists or food technologists.

Before establishing a microbrewery, restaurants need to complete the initial environmental examination and such examination needs to be approved by the related agency as per the existing law.

The effluent (liquid waste) produced by microbrewers needs to be disposed of only after proper treatment.

The solid waste produced by the microbrewery needs to be disposed of by following appropriate mechanisms and should follow environmental standards determined by the government time and again, according to the new policy.

Before applying to register microbreweries, investors need to submit an environmental mitigation plan adequately and effectively to the Department of Industry.

The tax will be determined by the Finance Ministry.

According to the standards, the Industrial Promotion Board will permit restaurants to operate microbreweries by assessing the population density, presence of tourists and the commercial importance of the places.

While applying for permission to establish a microbrewery, the applicants should deposit Rs1 million as security deposit.

The deposit will be returned if the applicants do not get approval to produce beer.

In 2015, microbreweries were provisioned to submit Rs200,000 as security deposit.

The licensed individual or the firm needs to maintain a minimum of 50 percent ownership stake for the first two years of commercial production.

In 2015, the licence holders were needed to maintain just 20 percent ownership stake.

Microbreweries need to start commercial production within 2 years after obtaining a licence.

Microbreweries are not allowed to produce beer for commercial purposes and restaurants are barred from bottling it.

The existing law imposed for the brewery industry will apply to microbreweries as well.

The government has barred foreign direct investment in microbreweries.

Microbreweries will be subjected to periodic inspection, according to the new policy.