Tag Archives: nc beer legislation

One Beer Article You Need To Read And Why, 3/8/17

I thought this would be shorter since I got home late from closing the bar.  I was wrong.

This article is interesting not because the information is surprising. It isn’t and it has been out in the public for a week now.  What interests me is how the Craft Freedom group has changed its approach over the last two years.

When the group first started, it was a lot like Mr. Smith Goes To Washington.  There seemed to be a naïve belief that if they brought their case to the state legislator they would win hearts and minds with the power of their argument.  What they found was, yes, many legislators agree with them.  However, many of those same legislators get donations from the distributor/wholesale lobby and individual distributors.  Those legislators could not make the leap to pissing off major contributors.

What Craft Freedom has done this time is continue to lobby to the legislators, but they have also taken a more proactive media approach. They are attempting to go around the money to the people and appealing to them with a fairness argument.  They are arguing that breweries should have this freedom and to deny them that goes against our basic principles.  Of course, people vote against the principles and best interests every day. I think they can win enough votes to raise the cap to 100,000 barrels.

The unspoken part of this is what interests me most.  If and when this bill passes, how does that change the contract negotiations between breweries and distributors?  For breweries with large ambitions, this artificial cap at 25,000 makes it imperative that they sign with a distributor.  Unless you come into the negotiations with the buzz of a Wicked Weed, you are at a disadvantage.  You must sign with a distributor.  By raising the cap, you give breweries a little more leverage to make the distribution deals a little fairer.

NC beer distributors are not equal.  I suspect the opposition by the wholesaler’s lobby group is driven by a small number of large distributors and not the majority of their sales force or the smaller distributors that dot the state.  That is why I think their real opposition to the law isn’t the possibility of losing potential breweries, but to losing that contract leverage and opening the door for their big national beer companies to strike out on their own and open their own distributorships.

In the end, I don’t think the big distributors give much of a damn about whether Olde Mecklenburg, Red Oak, or any of the big self-distributing breweries who have shown no inclination to ever sign with them do once they hit 25,000 barrels. It is about keeping hold of that unfettered 20%-40% they can milk from every brewery that signs with them and keeping the “incentives” from the big beer companies flowing.

Now, I’m going to go read some of this.  I’m in heaven already.

 

Five Beer Articles You Need To Read And Why, 4/29/16

Today will be a quick and dirty Five Articles.

  • The Reinheitsgebot is an interesting thing. First, it is a tax law created to protect the use of bread making grains.  Second, I believe it is a good guide in how to make beer.  It reminds you to use simple ingredients and use them well.  Third, I think the strict adherence to any law or rule in a creative endeavor eventually stultifies any potential growth to that endeavor.  While I think German brewers need to move past the law, I also think they should remember it and use it as a guiding force going forward.
  • For some reason, I thought this case was already adjudicated. It is an interesting look at the Canadian constitution through a beer lens.  There are similar laws in the United States (including North Carolina and South Carolina), however, I don’t remember ever hearing anyone getting arrested for smuggling alcohol from one state to another.
  • There are not going to stop this pub from being built. Maybe all the noise they make will make it harder for the pub to gain traction, but it will be built and lots of people will drink there.  The San Diego craft beer community needs to move and beat AB by making better beer and being cooler people.  Provide a better and more organic atmosphere then you will get at a big corporate pub.  You can tell the difference when going into a locally owned bar and a corporate franchise.  Make that and a much better beer selection your selling points.
  • Here is how a few simple changes in state laws can goose an industry into profitability. New York has done a lot to change its alcohol laws in the past few years and they are starting to see the fruits of those changes.  It is a model many states should emulate.
  • This is something happening in small towns all across the state of North Carolina. Many of these towns are trying to attract tourists from in and outside of the state.  They are attempting to make themselves destinations for people to spend long weekends relaxing in the clean country air.  That is why it is interesting to watch the clash of these small towns with the people they are trying to attract. Again, this is why I don’t think the people who passed HB2 though past the immediate bump from their voters about what they were doing.  Not all the tourists you are trying to attract fit into your traditional definition of a couple or a family.

Five Beer Articles You Need To Read And Why, 3/23/16

Back to work. Thank god.

  • Of course, the rate of growth slowed. It is idiotic to think a 22% increase every year was sustainable in any business.  Many in the industry scoff at the idea of saturation, but it is real and it will happen.  To think that level of growth was sustainable for a long period and/or that saturation in certain markets will not happen is a fundamental misunderstanding of business.  No matter how in demand your product is, eventually, it will stop being the next big thing. I’ve been saying this for two years, there will be a moment soon when many of the breweries that opened in the last three years will close.  Many of them will be brewers that make great beer, but have horrible business plans and many of them will have great business plans but horrible beer.
  • Here is one of the OGs of craft beer writing asking the question, “Why do I drink craft beer?” There are many facets to that answer. It is one I have been thinking about lately.  I plan on answering (or attempt to answer) that and why critics are/are not necessary for a blog post next week.
  • Distributors worrying that increasing the self-distribution cap is somehow going to cut into their business is understandable but overstated. Most breweries don’t want to self-distribute at a certain point because self-distribution becomes a second business they didn’t sign up for when they started making beer.  Many of the brewers I’ve met and talked to that do self-distribution, want a distributor so that they can expand their footprint without having to worry about trucks, drivers, and sales reps.  That is why I think along with increasing the distribution cap, the laws governing the contracts between brewers and distributors should also be changed to make it easier for brewers to get out of contracts with bad distributors.
  • Brewers have been adding fruit, lemonade, and other things to beer for hundreds of years. Sours are as traditional to beer culture as pilsners.  The idea that beer that doesn’t taste like beer is some new trend is absurd.  Maybe the addition of watermelon or habanero peppers is new, but not by much.  Coco Chanel once said something like, “Fashion is temporary, but style is forever.”  Use trends to augment your business, not define it.
  • Never go into a craft beer bar and ask a bartender to just give you their favorite. That can really badly for you.  Trust me, I’ve seen it.  Everyone’s palate and predilections are different.  Don’t assume your favorite flavor is the same as anyone’s.  Now, there is scientific research that tells us why.

Five Beer Articles You Need To Read And Why, 1/13/16

Laws and legislation.  Growing pains and adolescence.  One of the things that fascinate me about Major League Soccer is that we sports fans, specifically soccer fans, get to watch a top flight league grow and develop in real time.  It is a messy and confounding thing to watch.  There are 10 steps forward, two backwards, and three sideways at every phase of growth.  Craft beer is kind of in the same position.  Actually, a better analogy might be a band.  Bands form and they play any show they can get and they sell music directly to potential fans and develop a loyal and strong following if they are good.  Then, at some point, they go from being the little band that could to headlining their first tour.  Then, they stop being just a band and become a business and they have business worries. That is where craft beer is now.

  • Should the state of North Carolina be in the alcohol business? First, the state is tasked by the US Constitution to regulate alcohol in its borders, so the state will be involved in some capacity always. Second, if you want to change thegovernment’s level of involvement, good luck.  That is a decades-long fight that no one has the stomach for right now.  Politicians do things for two reasons.  The first, to get their name associated with a bill that will create jobs and/or increase tax revenue.  The second, to keep from being embarrassed.  Unless and until, OMB, NoDa, and Red Oak can prove that allowing them to self-distribute more than 25000 barrels a year the legislation will languish in committee. In this case, embarrassment isn’t working because the distributors and big beer give enough money to make it not work.
  • The point in your life when you realize you are at least partially a grown us is when you are faced with a decision between doing what you need to do to be responsible and doing what you want to do. When you start choosing the need to do direction you’re a grown up.  Breweries suing smaller breweries over potential intellectual property issues is a need to do situation.  This is my second prediction of what will happen this year in craft beer, craft beer will grow up and increasingly think of itself as a business.
  • At no point in this article is there any mention about how any “beer” that they make tastes and that is why they will never win. They don’t care about the beer as beer.  It is only a product to be sold.
  • This is one case where embarrassment is working. The Georgia legislature passed a law that was written in part by big distributors.  It has a Rube Goldberg feel to it that got exposed by the Department of Revenue.  Now they are trying to fix it.
  • Alabama steps into the 21st century as far as its beer laws are concerned. The craft beer people in Alabama did exactly what I said you have to do.  They appealed to the legislators with more revenue and jobs.  Politicians work to get reelected.  Doing things that make them look good and/or raise tax revenues without raising taxes and provide jobs is how they get reelected.  Either that or carrying the water for a lobbyist that gives them lots of money to go their reelection.

Five Beer Articles You Need To Read And Why, 4/27/15

Welcome to the business edition of the Five Articles

“Every time I call it a game, you call it a business. And every time I call it a business, you call it a game.” – North Dallas Forty

I think of that quote whenever I think of the things we love and how they inevitably get mired in business issues.  Most people get involved in sports, art, and brewing because they love some aspect of it, not solely to make money.  With that, here are today’s links.  A bevy of business and law articles.

The next two articles show you this isn’t just a growing issue and priority in North Carolina.  I posted a link yesterday about the three year fight to make the Florida growlers laws sensible.  Here are two more articles showing how the fight is going elsewhere.