CRAFTY SETTLEMENT CHEEPS BEER INDUSTRY: A 14-YEAR FIGHT OVER SMALL BREWERS' ABILITY TO DISTRIBUTE THEIR PRODUCT ENDS PEACEFULLY.

Author:Martin, Edward
Position:NC TREND: Craft beer
 
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After 14 years of legislative jockeying and debate, North Carolina's craft brewers and wholesale distributors finally forged a compromise that will provide the beermakers greater freedom to grow. Unfortunately, the move will take effect just as the public's taste for suds appears to have peaked. It's the marketplace, not regulation, that's likely to govern craft brewing's future, industry experts say.

"Overall, beer sales have been down in the last couple of years, but craft brewers have enjoyed a larger slice of the shrinking pie," says Todd Ford who, with his wife, Suzie, founded Charlotte-based NoDa Brewing Co. in 2011. "We recognize the pie is getting smaller. We're just dividing it up among ourselves."

Signed into law in May by Gov. Roy Cooper, the Craft Beer Distribution & Modernization Act enables brewers such as NoDa to distribute as many as 50,000 barrels of beer a year on their own. After that, they're required to sell through wholesale distributors. Previously, the limit was 25,000.

Under the new law, breweries that produce 50,000 to 100,000 barrels can distribute 50,000 before having to contract with one of the state's roughly 25 distributors, says Tim Kent, executive director of the N.C. Beer &. Wine Wholesalers Association. He calls it a "classic win-win situation for brewers and wholesalers."

Despite the long-standing 25,000-barrel cap, the Tar Heel craft-brewing industry has exploded from 45 brewers in 2010 to 310 in 2019, says Richard Greene, executive director of the N.C. Craft Brewers Guild. About 12,000 people work in the industry, which has helped revive the downtown areas of several cities across the state.

The dispute that led to the new law has been brewing since 2005. That's when the first of nine unsuccessful bills was introduced in the N.C. General Assembly, proposing to boost the amount of beer that smaller brewers would distribute on their own. Each bill met strong opposition from wholesalers, who historically have been big campaign contributors to state lawmakers.

While the new law applies to those 310 small brewers, it was largely driven by two concerns that argued the 25,000-barrel cap stunted their growth. NoDa and Olde Mecklenburg Brewery, also in Charlotte, in 2017 formed Craft Freedom, an ad hoc organization to challenge the law's constitutionally. Olde Mecklenburg founder John Marrino argued the cap left him with "a business with no growth potential."

Under pressure from state lawmakers to devise a...

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