Raleigh, N.C. — A push to let breweries self-distribute more beer and give them more power in distribution contracts has gone flat after organized opposition from wholesalers and distributors.
Before the bill's scheduled House ABC Committee hearing Wednesday, primary sponsor Rep. Chuck McGrady, R-Henderson, stripped out provisions that would have raised the self-distribution limit for craft breweries from 25,000 barrels to 200,000 barrels a year and would have made it easier for a craft brewery to break off a franchise agreement with a distributor.
While McGrady and other supporters said the changes would encourage growth and job development in the state's small breweries, they faced stiff opposition from beer wholesalers that form the distribution arm of the state's three-tiered Alcoholic Beverage Control system. They lined up at a public comment hearing last week to speak against the provisions.
North Carolina Beer and Wine Wholesalers Association chairman Tim Efird is president of Standard Distributors in Gastonia, which he described as one of the smaller distributors in the state.
“House Bill 500 would put my business at serious risk, along with the businesses of my fellow wholesalers," Efird warned the committee last week, talking about the investment wholesalers make in branded trucks and refrigerated warehouse space. "What wholesaler would be willing to take on and invest in new craft brewers? The risk would far outweigh the reward in this scenario."
At Wednesday's meeting, McGrady described the updated bill as "a shadow of its former self," noting that raising the production cap "was a major point with the beer and wine wholesalers." He asked his colleagues to support the "trimmed back" version.
Craft Breweries Guild executive director Margo Metzger told the committee that her group is "indeed disappointed that the marquee provisions of the bill have been removed" but said brewers support the remaining "extremely important incremental changes" in the measure, including allowing tap rooms to sell beers brewed at other facilities and allowing farm breweries to serve beer on site.
Even trimmed back, however, the bill appeared to be in trouble. Committee Chairman Rep. Jamie Boles, R-Moore, adjourned the meeting without taking a vote on it, although he promised the committee, "You will see it again."