New bill proposes to expand craft-brewer production

The N.C. General Assembly proposed a new bill that would allow the craft beer industry to increase its production by more than double without going through a wholesale distributor.

House Bill 67, presented Feb. 9, would increase the number of barrels North Carolina brewers can make from 25,000 to 100,000 before requiring interaction with wholesale distributors.

N.C. Rep. Pricey Harrison, D-Guilford, who co-sponsored the bill, said the current cap infringes upon a brewer’s right to free enterprise.

“You can’t even keep the first 25,000 that you had been distributing with your own drivers and salesmen,” Harrison said. “You have to turn over your whole distribution to another party whether you want to or not, and it just seems very unfair.”

Harrison said while some brewers like wholesale distributors because it can be more convenient, others prefer self-distribution in order to more closely maintain quality control.

“I think it’s more about self-determination about where your beer is going to be sold and consumed and the quality of it when it gets there,” Harrison said.

Some distribution laws date back to prohibition, she said.

“The way our current laws read, they’re very antiquated,” she said.

David Larsen, the owner of YesterYears Brewery in Carrboro, said the brewery is not currently producing 25,000 barrels — but that House Bill 67 would allow his business to grow.

“It won’t affect us now, but down the road it will,” Larsen said. “It’s a good thing because it allows people to self-distribute longer.”

The N.C. Beer and Wine Wholesalers Association opposes raising the cap.

“They have got a lot of money, and they write a lot of campaign checks, and that’s the main reason why we can’t get this bill moving,” Harrison said.

Franchise laws work in favor of small craft breweries because the limits on self-distribution prevent big brewers from being their own distributors, according to the N.C. Beer and Wine Wholesalers Association website.

While Harrison said she agrees there is a need for a cap on production, she maintains that the current law must be adjusted. Removing the cap entirely would create a competitive disadvantage.

“Lifting the cap is letting the brewers who want to expand, expand, — and gives them the freedom to do it,” she said.

According to the N.C. Craft Brewers Guild, the state has the most craft breweries in the South, with over 200 breweries and brewpubs.

And Larsen said many of the state’s craft-brewers would benefit from the legislation becoming law.

“The fundamental thing is it just seems undemocratic to force brewers to turn over their beers to be distributed by somebody else and stick you into that lifetime contract even if they don’t do right by you,” Harrison said.

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