Although North Carolina has the most breweries in the South, the region still lags behind other parts of the United States in the number of craft breweries per capita.
Stephan Gohmann, a professor of free enterprise and economics at the University of Louisville, recently published a report about the lack of breweries in the South. Gohmann said the work was prompted when he went on beer rating sites and saw that Southern states were rarely ranked in the top.
It prompted a research question: why does the South have fewer entrepreneurial brewers?
“The answer is simple economics," Gohmann said in an email. "The costs are higher because there are more regulations that make it difficult for microbreweries to succeed."
Bart Watson, chief economist of the Brewer’s Association, said regulation such as excise taxes plays a role in preventing new breweries from entering the market in Southern states.
“A lot of this goes back to path dependency — that because other states changed their regulatory structures earlier, they got more breweries," he said.
Watson said the availability of craft beer fuels demand for more investment as people try new beer.
“People were introduced to local beer, that created new demand, and the South hasn’t seen quite as much of that virtuous cycle yet,” said Watson. “I do think it is coming but it’s just going to take more time.”
Scott Maitland, owner of Top of the Hill, said his brewery has felt some of the effects of North Carolina regulations.