Less control on tap
Published April 7, 2017
Editorial by Greensboro News-Record, April 7, 2017.
North Carolina’s ABC system is heavy on the C, as in Control.
Alcoholic Beverage Control laws run from Chapter 18B-100 through 18B-1309 in the General Statutes. There are more regulations than a bar has peanuts, and some seem, well, a little bit nutty.
For example, G.S. 18B-1104(8) says the holder of a brewery permit may “obtain a malt beverage wholesaler permit to sell, deliver, and ship at wholesale only malt beverages manufactured by the brewery” up to 25,000 barrels a year. If a brewery wants to distribute more than 25,000 barrels of beer, it has to hire an outside distributor.
That arbitrary number limits many of the emerging breweries in North Carolina. While some choose to hire distributors and stick to making beer, others would rather build on the distribution networks they’ve already created. Or they don’t want their products handled along with many other labels by big distributors. The ceiling of 25,000 barrels forces them to choose between expanding production or controlling their own distribution. They shouldn’t have to.
Raising that limit should be an easy sell to a pro-free enterprise legislature. In fact, it’s part of a larger bill reforming ABC laws introduced by several lawmakers of both parties, including Republican Jon Hardister and Democrat Pricey Harrison of Greensboro. One of the leading proponents of the move is Bill Sherrill, owner of Red Oak Brewery, which originated in Greensboro and now sits next to I-40 in eastern Guilford County.
House Bill 500 should draw plenty of support, but it could face opposition from legislators influenced by wholesale distributors, who like the role granted to them in current law.
The bill doesn’t seek to eliminate a limit but would raise it to a hefty 200,000 barrels. North Carolina’s largest craft brewery, Highland in Asheville, produces about 50,000 barrels. So the 200,000 number could be negotiated downward. But it shouldn’t drop too far. Beer is a booming business, but imposing artificial restrictions doesn’t encourage further growth.
Among its other provisions, HB 500 would allow the sale of growlers in retail establishments. These are defined as “cleaned and sanitized” containers that can be taken home and returned for reuse like a durable grocery bag. The practice cuts down on bottles and cans that might end up in landfills.
The bill would authorize tastings during brewery tours, ease rules for home wine-making for private consumption and, for good measure, direct a study by the Legislative Research Commission of all ABC laws to determine what other changes might be needed to “address and reflect the rapidly changing alcoholic beverage industry.”
A sober analysis likely would conclude that much less C is needed in regard to the AB industry. Discussion could cover the basic question of whether the state should continue to monopolize the sale and distribution of liquor. That system works well, but states that permit private retail sales don’t seem the worse for it.
While an orderly society must minimize the abuse and overuse of alcohol, and it’s true that breweries and wineries have done well in this state, too much regulation is detrimental to growth and innovation. It wasn’t until the state lifted restrictions on alcohol content in beer that craft breweries were able to become more creative and successful. Another rule that could be on the way out soon is one that bars alcohol sales before noon on Sunday. A bill introduced last month would allow restaurants to serve cocktails with Sunday brunch, with local government approval.
HB 500 offers a chance to make several needed updates, and it could lead to many more. The new C may be for Cheers!
