Politics & Government

Here’s why NC craft brewers could expand under a new House bill

The bottle line at The Olde Mecklenburg Brewery on Yancey Road in Charlotte. Owner John Marrino and Todd Ford are fighting to overturn a law that limits how much they produce before having to contract with a wholesaler.
The bottle line at The Olde Mecklenburg Brewery on Yancey Road in Charlotte. Owner John Marrino and Todd Ford are fighting to overturn a law that limits how much they produce before having to contract with a wholesaler. dhinshaw@charlotteobserver.com

Craft breweries in Charlotte and across North Carolina say they could expand under a bill introduced Monday by a bipartisan group of lawmakers.

House Bill 500, whose primary sponsors include GOP Reps. Chuck McGrady of Hendersonville and Bill Brawley of Matthews, would raise from 25,000 to 200,000 the number of barrels a brewer could produce before entering into a contract with a wholesale distributor.

“To me it’s become a free market issue,” said McGrady, who called the current limit “nonsensical regulation.”

Charlotte’s Olde Mecklenburg and NoDa breweries already are close to the cap. They’re among nearly 200 craft breweries in the state with what the industry says is a $1.2 billion economic impact. Since Olde Mecklenburg opened in 2009, another three dozen more have opened in the Charlotte area, with more in the pipeline.

Tim Kent, executive director of the N.C. Beer and Wine Wholesalers Association, called Tuesday’s bill “a pretty big overreach.”

“Tell me why they need a 200,000-barrel limit,” he said. “Pushing the envelope like this will have long-term implications, many of them negative, for the craft beer industry.”

Kent said the bill could open the door for large national and international brewers to set up their own distribution networks, crowding out local craft brewers while putting existing wholesalers out of business.

But craft brewers and their allies say it’s about creating jobs.

John Marrino, owner of Olde Mecklenburg Brewery, has said without a rise in the cap he would have to forgo plans for a new $7 million brewing facility in Cornelius. Once he hits the 25,000-barrel production limit – or 8.26 million bottles of beer – he would have to contract with a distributor, who would then take over the brewery’s sales, delivery and distribution.

“We’d become an also-ran,” Marrino told reporters Tuesday. “we absolutely need the dedicated sales and distribution effort to be successful in the marketplace.”

Brewers say their industry accounts for more than $300 million in wages and 10,000 new jobs a year in North Carolina. Brawley said Mecklenburg County needs the jobs breweries bring.

“Production jobs, not just bank vice presidents, are the kind of jobs we need,” he said.

In wholesale distributors, the brewers are going up against an established industry. Distributors have reinforced their clout with nearly $1.5 million in political contributions in the last four years, according to Democracy North Carolina.

McGrady’s bill is one of three introduced to address the production cap. Asked if distributors would settle for a cap below 200,000 barrels, Kent suggested they might.

“We are very reasonable, and we are willing to talk,” he said. “But we have not been approached.”

Jim Morrill: 704-358-5059, @jimmorrill

  Comments