The explosion of the craft beer and beverages movement in the United States has continued to build momentum for thirty years, showing no signs of slowing down. Nevertheless, in North Carolina, with our rich craft beer culture, there is legislation on the books that hurts the ability of craft breweries to grow.
An attempt to change this legislation made its way into the latest session of the state’s General Assembly. In this article, we will discuss the proposed legislation, the results, and how it will affect current and future craft beer brewery owners.
How the Current Law Hurts Craft Beer Breweries
According the News and Observer, the law as it is currently written is a holdover from Prohibition, limiting breweries from self-distributing over 25,000 barrels of beer. Once breweries seek to distribute between 25,000 barrels, they must sign an agreement with wholesalers who collect fees and taxes to distribute beer to restaurants and retail stores.
Though few breweries distribute so many barrels, and many sign with a distributor before they reach 25,000, local brewery businesses argue that it should be their choice whether they use a wholesaler. Todd Ford of NoDA Brewing in Charlotte reported told the House ABC Committee:
““Why do state laws penalize the breweries who have invested the most? It should be our choice, but not be a state mandate…”
The Proposed Craft Beer Legislation
HB 500 was originally written to allow breweries to self-distribute beyond 25,000 barrels, and allow breweries to break wholesaler agreements once the cap was raised. This was the part of the legislation that found the greatest opposition from distributors and politicians; therefore, it was stripped from the wording of the bill.
What Passed? What Didn’t?
With the self-distribution provision removed from HB 500, the measure that did pass in the house was related to craft brewers growing their own hops in dry counties. The vote in the house allows breweries that grow hops and brew on their farms to sell their products on site, even in dry counties.
How the Law Affects Existing and New Craft Beer Breweries
Most craft breweries in North Carolina are not distributing 25,000 barrels per year. The law was originally intended to keep mega-brewers in check. Red Oak, NoDa, and the other craft beer brewing companies who have been outspoken about the need for change contend that it should be the right of the business owners to choose who their products are distributed.
The good news for current and future craft beer brewers is that the movement has grown so rapidly that distributing 25,000 barrels per year is an attainable goal. North Carolina remains friendly for starting business and breweries and the movement will continue to flourish as new laws free microbreweries further. For more information about starting your own craft brewery business, contact us.