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Preserve N.C.’s craft beer industry

Paul T. O’Connor

Contributing Columnist
Posted 3/14/17

RALEIGH — I love beer, especially craft beer, and from the look of things about 5 p.m. most days, so do many other North Carolinians.

But as I enjoy my IPAs, I’m concerned that the big beer companies will someday crush small …

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Preserve N.C.’s craft beer industry

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Posted
RALEIGH — I love beer, especially craft beer, and from the look of things about 5 p.m. most days, so do many other North Carolinians.

But as I enjoy my IPAs, I’m concerned that the big beer companies will someday crush small breweries, just as they did almost 50 years ago.

Craft drinkers want beer with taste, beer made locally in small batches, not swill corporately designed by the Brazilian company that sells one-third of the world’s beer and can afford Super Bowl ads.

It wasn’t long ago that only the swill was available. Craft beer availability here accelerated only after passage in 2006 of a bill allowing the brewing and sale of strong beer. There are now 190 craft breweries in the state, generating $1.2 billion of business and 10,000 jobs. There probably weren’t 20 craft breweries in 2001.

Today, the craft beer industry is involved in a major legislative battle.

State law in place since the repeal of Prohibition mandates a three-tiered system for beer sales: producer, distributor and retailer, all required to remain separate as a guard against pre-Prohibition abuses.

The law has two important exceptions. A brewery can sell its own beer at its brewery, or “brewpub.” And, a brewery can self-distribute, not being required to use an independent distributor, until it brews 25,000 barrels.

Several craft brewers want the 25,000-barrel limit raised so they can expand but continue self-distribution. The politically powerful beer distributors, the second of the three tiers, are opposed.

I don’t know where I stand.

In my heart, I’m with the little guys. I know the history of beer in this country and how every city in the country had its own brewery until Big Beer muscled them out of business. When I think of beer distributors, I think of Big Beer.

That may not be fair, however. The distributors make the bulk of their money from Big Beer but they also distribute the little beers, finding them space on our grocery store shelves. And the viability of the distributors is essential to the future of the crafts.

Once the state raises the limit above 25,000 barrels, I fear it will go away altogether and that Big Beer will buy distributorships. When that happens, the monopoly corruption of the pre-Prohibition era starts again.

Big Beer, in a move reminiscent of its 1970s monopolization, is also buying up small, good breweries and adding their corporate power to those brands. So, enjoy a Joe IPA from 10 Barrel Brewing, a good beer. But that sale goes to Big Beer, not to locally owned Wicked Weed or Foothills.

The legislative battle is being cast as the craft industry, with small businesses in many legislative districts, versus the distributors with big contributions to the Republican Party. I see it as a struggle between those of us who want the small craft breweries to thrive, independent of the king, and those who want big business to once again tell us we can have only one style of beer, the swill they call “beer.”

Maybe the challenge for legislators, then, is to find ways to protect fair competition in the beer market, assuring that mega-corporations can’t crush locally owned businesses. And that challenge may have little to do with the 25,000-barrel limit.

Paul T. O’Connor writes for the Capitol Press Association and has covered state government for 39 years.

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