Tag Archives: beer law

One Beer Article You Need To Read And Why, 3/4/17

The One Beer Article You Need To Read And Why, is a cheat.  It is a quick way for me to come up with a topic to write about daily without having to do too much brainstorming.  So, when I can’t find an article I want to write about, it makes it kind of hard.

Anyway, here is an article about…wait for it…the NC distribution cap fight.  At least this one finally puts a number on all the money the N.C. Beer and Wine Wholesalers Association and individual distributors have given to NC legislators.  The total is almost $1.5 million.  That should explain all you need to know as to why progress has been slow.

I’ve been following this story since it started gaining steam 3 years ago, and I’m tired of talking about it.  However, I think the distributors are more afraid of the big beer companies pulling out of their contracts and distributing themselves.  That is a more realistic fear than the one of all these small brewers distributing their own wares.  It isn’t that much more realistic, but more realistic.

I just get tired of political fights whose conclusion is inevitable.  If the Supreme Court hadn’t stepped in, we would still be in a 40-year battle to finally get to marriage equality.  This is a much smaller and less important issue, but the conclusion is inevitable.  The politicians want to vote to raise the cap, but they get a lot of money from its opponents.  Eventually, the politician’s beliefs will win out and they will vote to raise the cap.  Wholesalers should spend less time worrying about how to stop the cap and more time trying to build good relationships with brewers.

Last thing, the distributors who treat brewers as if they are doing them a favor by distributing their beer are the ones who should worry.  I think the biggest change raising the cap will initiate is making distribution contracts fairer and forcing some distributors to treat brewers more as partners.

One Beer Article You Need To Read And Why, 2/3/17

Being able to sell the beer you make out of your own store front, what a novel concept.  The three-tier system is the way alcohol is made, distributed, and sold in the United States.  Under the 22nd Amendment and the federal laws that govern the sale of alcohol in this country, we have suppliers, distributors, and retailers.

Except, each state is empowered to create the details of this system as it sees fit for itself.  That means states can create exceptions to this rule.  Craft beer has grown in many states because those individual states have created rules that allow brewers to own and operate their own taprooms without having to go through a distributor or retailer and self-distribute their beer to bars and bottle shops.

North Carolina and Georgia are states that are very similar in demographics and economics.  They are mirror images of each other in many ways.  In 2015, North Carolina had 161 operating breweries producing 675.469 barrels. Georgia had 45 operating breweries producing 365,015 barrels. Per Brewers Association numbers.

The reason is very simple.  North Carolina’s laws, while still antiquated in many ways, allow breweries more flexibility in selling their own beer.  North Carolina allows for taprooms and limited self-distribution.  Currently in Georgia, if you go to a brewery, they can sell you a tour of the brewery that allows you free samples of their beer, but they cannot sell you beer.

For a couple of glorious months last year Georgia brewers could sell growlers to go from their breweries, but the Department of Revenue changed their interpretation of the law that was passed allowing those sales ending that glorious experiment.

Why is it so hard for states to pass laws that allow breweries to sell directly to customers particularly across the South?  The easy answer would be, “This is the Bible Belt and conservative legislators don’t want people being able to buy alcohol all willy-nilly.”

Many of the distribution laws currently governing some states were written in the 1970s or 1980s when there were only 5 breweries in the US.  Two of those breweries (Miller and Anheuser-Busch) were so big and powerful they didn’t (and still don’t) need distributors.  So, to keep them from purchasing distributors and selling their beer themselves, legislators passed laws to make it harder for brewers to self-distribute and leave distribution contracts.

Fast-forward to 2017 and those distributors who are now in bed with those same two large brewing companies use their power in state legislatures (many of the owners are in the legislature) to protect their businesses.  In North Carolina, for instance, craft brewers can’t get the self-distribution cap raised because they can’t get the legislation out of committee because the owner of one of the largest distributors in the state sits on the committee.

Currently, I’m reading the book “Bootleggers and Baptists” about how politician use the cover of morality to hide the amoral reasons they vote the way they do.  It has been very instructive and has illuminated many of the things I’ve seen in the past couple of years as I’ve worked on this blog.

One Beer Article You Need To Read And Why, 11/23/16

In the coming weeks, I have planned to write a piece or two comparing and contrasting the alcohol laws between North Carolina, South Carolina, and Virginia.  I want to see if it is possible to discern how those laws have affected the craft beer industries in each of those states.  I am currently in research mode meaning I’m reading and taking notes on the laws of each state.  Let me tell you that is a ton of uninteresting reading.  Here is a piece from the John Locke Foundation that studies this very thing.

If you are in North Carolina and are into craft beer you may know that there is a battle going on over how much a brewer should be allowed to distribute before legally having to go with a distributor.  Currently, that number is at 25,000 barrels.  That is a lot of beer and until recently no brewers in NC came close to that amount.  However, there are around 3 brewers who could sell that amount this year if they wanted to or in their eyes allowed to.  They are all independent breweries who self-distribute.

This law is silly and is propped up by the wholesaler/distributor lobby in NC that seeks to protect itself at the expense of common sense.  This paper argues successfully that this is one of many in the laws that regulate the manufacture, sale, and use of alcohol in North Carolina that are silly and against all common sense.

When you look at these laws, the only people they protect are the people who distribute alcohol in this state and that includes the state-run monopoly on liquor, which makes it one of eight states with this peculiar law.

Back to the self-distribution fight in North Carolina.  It doesn’t matter what the wholesalers say (including making specious health and safety claims) they don’t want brewers to be able to distribute more of their beer because the wholesalers don’t want to lose the money they get from distribution.  I think they would lose contracts and money if brewers could distribute more of their own beer.  However, it wouldn’t be as much as they seem to fear.

Why, distributing beer is hard and expensive.  Small brewers and brewers who only want to distribute in a finite area put up with it because it is easier and cheaper to DIY it then to pay a distributor.  However, at a certain point, a brewer is running two companies: a brewery and a distributorship.  Most breweries won’t want that.

As a quick aside, another battle brewers should fight is to change the nature of the distribution contracts. The way the contracts work is all in favor of the distributor, particularly when the brewer is small.  One tactic brewers in North Carolina could take is to make a deal on the distribution cap while getting concessions to equalize the power in distribution contracts.

I will say breweries also make specious arguments in calling for more freedom to self-distribute.  One that makes me laugh is a certain brewery swears that going with a distributor would ruin their ability to create wonderful season beers.  That is a load of crap because there are other factors that currently keep this brewery from doing more seasonal beers and none of those have to do with who is distributing their beer.

Look for more from on this subject in the next month or so.

One Beer Article You Need To Read And Why, 11/14/16

As populated and crowded as this country can seem at times, there are still parts of it that are bereft of humans.  There are large swaths of this country in the Midwest and southwest with counties of huge areas and few people.  People, particularly from the northeast of this country, don’t get the vastness of this country.  Being from large cities or suburbs where everything is close by, it can seem like anything over a 2-hour drive away is the other side of the moon.

This is all started because one state senator in Oklahoma just wanted to drink a good beer at a restaurant.  Oklahoma just passed a law to modernize all it alcohol regulations.  One of the main portions of the new law is the elimination of the 3.2 beer.  In short, 3.2% ABV beer is the beer sold in grocery stores and convenience stores and bars and restaurants.  To buy real beer you must go to a liquor store.

The new law makes it legal for everyone to sell normal beer.  However, bars and restaurants can only sell beer over 3.2 if the county has liquor by the drink.  The law will be phased in over the next two years so counties that do not allow liquor by the drink currently will have the chance to approve it via referendum during that time.

Now, the beer distributors in Oklahoma and the breweries in Oklahoma have all pretty much said they will stop carrying 3.2 beer because it is an extra cost and hassle to deal with. There is a very real possibility that the remaining 18 dry counties in Oklahoma will have no beer at any restaurants in 2 years.

While that seems to be a problem on its surface, these are counties of large areas with small populations. They are filled with small towns with little money.  For many of these towns, while alcohol and drugs are illegal there, they still pose a major problem.

Alcohol laws in this country are fascinating for a very simple three-step reason.  Step 1, alcohol is legal to sell in the United States. Step 2, each state regulates the manufacturing and sale of alcohol.  Step 3, each county (or equivalent) in each state decides where alcohol can be manufactured and sold.  To sum up, you have 50 different ways alcohol is regulated for sale and then you have somewhere around 3100 different localized implementations of those regulations.

I know and understand that the counties in each state interpret the state laws the same with the only difference being dry or being wet because otherwise, distribution would be a nightmare.  However, that simple difference is huge because a county can be wet, but individual cities and towns in the county can be dry.  Also, individual cities can be wet, but not have liquor by the drink or Sunday sales.

At some point, I’m going to jump in the rabbit hole and go through each state’s alcohol laws.  I have become fascinated how each state regulates alcohol sales and how they are different and how they are interpreted differently by different parts of the country, different states, and even different counties in each state.

One Beer Article You Need To Read And Why, 10/27/16

Somewhere around two years ago, the North Carolina craft beer community got a shock to its system.  The Alcohol Law Enforcement (ALE) arm of the Department of Public Safety closed a few beer festivals.  Why?  Servers at the beer festival were taking the opportunity to go around and taste other beers.  You see in North Carolina it is illegal for someone who is serving beer to drink while on duty or while wearing their uniform.  Bars and restaurants followed this rule with no problems.  However, most craft beer people didn’t know this new interpretation of the rule now included festivals.  Tasting beer is one of the incentives for volunteering for to pour at a beer festival for brewery and distribution reps.  That is one of the main draws to get volunteers for the Great American Beer Festival.

Under the ALE interpretation, that is now verboten.  So is having a post-shift beer at the place you work even if the establishment has closed for the day.  Bartenders can no longer pour themselves a beer to sip as they sweep and mop.  Again, under ALE interpretation, you are still on duty.

Now, as this Free-Times article highlights, South Carolina’s craft beer community is coming under the same scrutiny from the South Carolina Law Enforcement Division (SLED).  Basically, SLED contacted the SC Department of Revenue to get a ruling on whether nonprofits are retailers for these types of events because in SC brewers can’t have any direct dealing with retailers.  Not only is it illegal for brewers to donate beer directly to a nonprofit retailer, they cannot pour their own beer at a festival sponsored by the nonprofit retailer.  In this case, the SC Brewer’s Guild was considered a nonprofit retailer so brewers (members of the guild) couldn’t pour their own beers.

Without getting into the weeds of the absurdity of this particular situation, the larger point is somehow craft beer is succeeding in this country when the laws that govern it change from state to state.  They can also change from year to year depending upon who is interpreting and how they are interpreting the laws that govern beer and alcohol.

Here are my problems with alcohol laws in this country:

  1. Most of the laws affecting craft beer culture were written years before the idea of craft beer was even conceived.
  2. The hodge-podge nature of alcohol laws vary from state to state is more than just an annoyance for brewers.
  3. Alcohol law enforcement is poorly funded and staffed. Plus, staff, like the rest of general population, is just learning about craft beer and how its culture is different from a traditional beer and alcohol culture. Also, that culture is often imported from other states where craft beer is better established and the laws are different creating somewhat of a culture clash.

The people I feel worst for are the government officials and agents tasked with interpreting and enforcing these laws.  They are hamstrung by the 3 problems I just listed.  I think each state should create a commission to study how to modernize its alcohol laws and change them to fit our times and culture.  Of course, that could just make things worse.

One Beer Article You Need To Read And Why, 10/18/16

Today is a short one. I had trouble finding something that fascinated me enough to write about, so I went with an old favorite.

Ever since I started this blog and started reading beer related stores every morning to comment on them, I’ve been fascinated by stories like this one out of Johnson County, NC.  I’m not fascinated by these stories because they are about beer or alcohol.  They aren’t.  I fascinated by them because they are about revenue both business revenue and tax revenue.

These ballot measures are almost always spurred by one of two groups realizing they are leaving money on the table:  business owners and politicians.

This holds to my theory that all laws involving alcohol are primarily enacted to decide who gets to economically benefit from the sale of alcohol even when they are wrapped in a cloak of morality or purity.

The most famous beer law, the Reinheitsgebot, was created to stop competition between bakers and brewers over grains they both wanted to use for their respective business.  By restricting brewers to barley, bakers would use the cheaper grain keep bread affordable for the masses.  It was also a way to protect drinkers from beers using potentially dangerous adjuncts.

Here is a bit of rampant mostly uninformed speculation: Prohibition lasted as long as it did, even in the face of obvious failure, because politicians played teetotalers off bootleggers to rake in power from one side and money from the other, all the while drinking as much Canadian whiskey as they could get.

That is a thing that happens a lot, particularly in this country.  Politicians using the sincerity and ferocity of the religious as their foot soldiers to pass laws while taking money from the craven who are benefiting most from the laws they pass.

Five Beer Articles You Need To Read And Why, 6/17/16

A short vacation starts for me today.  I’m heading to Richmond for a couple of days of beer drinking.  The Five Articles should not be affected, but it just depends on how drunk I get.

Five Beer Articles You Need To Read And Why, 6/16/16

Today is Bloomsday.  It is June 16, the day Leopold Bloom walked through Dublin in James Joyce novel Ulysses.  Once again, I will begin my quest to start and finish the book. I’ve made it pretty much half way through on my last attempt.  Anyway, on to the Five Articles.

Five Beer Articles You Need To Read And Why, 6/15/16

There was a bounty of good articles today.  Here are the five that I like best.

Five Beer Articles You Need To Read And Why, 6/14/16

Tuesday has arrived.  Today’s articles have a lot of food.  Also, there is a new beer review coming up in the next couple of days.

  • This is a short article that tries to delve into craft beer and food. The article does the same thing many in the craft community and certainly those outside the community do.  It treats craft beer like a hobby or fad instead of the business it is by diminishing it with the phrase “craft beer craze” to describe its subject matter.  We in the craft beer business have to get over apologizing for what we do and the success that has come with it.  Yes, brewers do what they do for the love of beer, however, what they do is also how they pay rent and put food on their families’ table.  Thinking about beer as a business should not be left to the province of ABInbev and their ilk.
  • This is a celebration of beer and cheese from England. It is a bit of paid content in the Lifestyle section of the Telegraph from the Britain Beer Alliance.  It breaks down why beer and cheese work so well together and gives a few suggestions for pairings.  I’ve read many pieces on the Brewers Association website craftbeer.com that are very similar.  There seems to be more of a distaste and distrust of paid content in the US than in Britain.  However, is that worse than a newspaper/news website just reprinting a press release as a news article? I’ve read a lot of those also.  At least with paid content the news organization gets some money out of it.
  • Along with some pretty good nutritional information about beer, this article taught me that Duluth is known for its craft beer. This article does point out that beer has nutritional value, however like any alcoholic beverage it should be used in moderation.  If you’re drinking beer for its health benefits, you’re doing it wrong.
  • I still don’t understand why they are dragging this out over 20 years. Most of the Colorado liquor stores that will fail will do so because they offer no added value for consumers. If you provide consumers with a knowledgeable staff (sommeliers and/or Cicerones) or just a cool place to hang out, you will probably survive.  Those that don’t do that will not survive.  That’s how a free market economy works.
  • Every couple of years a story like this pops up. Some rich guy with too much time on his hands goes out and finds a shipwreck. He salvages as much as he can to sell so he can make more money and finds a sealed bottle at the bottom that is pretty well preserved.  He brings in a scientist and/or a brewer who pull out the contents and try to create a reasonable facsimile of what was in the bottle.  This particular version of the story comes from Australia.