North Carolina’s craft beer brewers would be able to self-distribute more than four times as many barrels a year under a bill introduced last week in the state Senate.
Sens. Jeff Tarte, a Cornelius Republican, and Jeff Jackson, a Charlotte Democrat, are among the prime sponsors of the bill that would raise the production cap for small brewers before they have to go with a big distributor. Craft brewers are now limited to 25,000 barrels. Anything over that, they have to enter into a potentially costly contract with one of the state’s big beer distributors.
SB313 would set the production limit at 103,091 barrels. Why the odd number?
“We came to the proposed production cap number the same way the previous legislature came to the previous production limit: We picked a number,” Tarte said Friday. “The benefit of raising the number to this amount is that it gives our breweries a runway to expand and grow to help them compete, but still continues the three tier system.”
The “three-tier” system consists of producers, wholesalers and retailers. It’s designed to avoid monopolies.
The Senate bill is the second introduced this session to raise the cap. Still another is expected later this month in the House.
The efforts pit the fast-growing craft beer industry against wholesale distributors, a group that has reinforced its clout with nearly $1.5 million in political contributions in the last four years, according to Democracy North Carolina.
Distributors say they can help small breweries by expanding their markets. They say craft brewers aren’t limited in their production if they’re willing to work with a distributor.
But craft brewers are marketing their campaign to lift the cap as “craft freedom.” In a letter to lawmakers last month, Grover Norquist, president of Americans for Tax Reform, called the cap a “glaring example of harmful regulation that inflicts economic harm while serving no purpose other than pure protectionism.”
A leader of the push to raise the limit praised the Senate bill.
“I’m happy to see that we have more support,” said John Marrino, owner of Charlotte’s Olde Mecklenburg Brewery.