New law lifts distribution cap for breweries
Some of Charlotte’s favorite breweries could be expanding in the near future.
Gov. Roy Cooper signed HB 363, or the Craft Beer Distribution and Modernization Act, last week after a years-long battle between craft brewers and wholesale distributors.
The bill quadruples the number of barrels brewers can produce each year. It allows them to self-distribute up to 50,000 barrels as long as total sales, including in house and to retailers, don’t exceed 100,000 barrels. Previously, brewers could produce and self-distribute only up to 25,000.
The owners of Olde Mecklenburg and NoDa breweries have led an effort to increase the cap for years. They’ve faced opposition from the N.C. Beer and Wine Wholesalers Association, which argued that working through a distributor wouldn’t limit brewers’ production.
Several meetings with the groups led to an agreement that preserves the state’s three-tier system of producers, wholesalers and retailers while allowing independent craft breweries to expand their distribution areas.
“This is an excellent piece of legislation for wholesalers as well as brewers,” said Tim Kent, executive director of the N.C. Beer and Wine Wholesalers Association. “It significantly strengthens the state’s franchise law and it creates a new classification of brewers so that companies like OMB can grow, prosper and flourish.”
Todd Ford, co-owner of NoDa Brewery, said his business kept distribution close to the Charlotte area to avoid passing the 25,000 barrel cap. Now, he’s looking at selling to not only Raleigh, Durham and Greensboro, but also South Carolina.
“We’re strategically located on the state line,” Ford said. “We’re not represented in areas like Greenville, Spartanburg or Charleston, so those would be attractive to at least start exploring.”
Charlotte is home to 30 breweries. Although larger companies like NoDa are looking to partner with wholesalers, smaller breweries can remain successful through independent distribution.
“Small brewers can decide to distribute on their own or work with a distributor,” John Marrino, owner of Olde Mecklenburg Brewery, said. “It depends on what your goals are... Self distribution only makes sense if you’re going to distribute close to your brewery.”
Ford and his wife, Suzie, partnered with Marrino in 2017 on a bill that would have raised the annual production cap to 200,000 barrels. Although the current law allows for 100,000 barrels less than the original proposal, the brewers are happy with the compromise.
“This increase is pretty significant,” Marrino said. “100,000 barrels is a lot of beer. I think this law will be fine for a long time.”