NC craft brewers, distributors toast bills ending long-running battle

Companion bills filed in the House and the Senate this week would end a long-brewing battle between North Carolina's growing craft beer industry and the state's wholesale distributors.

Posted 6:54 p.m. Mar 14, 2019 — Updated 11:33 p.m. Mar 14, 2019

Matthew Burns

, WRAL.com senior producer/politics editor, & Laura Leslie, WRAL Capitol Bureau chief

RALEIGH, N.C. — Companion bills filed in the House and the Senate this week would end a long-brewing battle between North Carolina's growing craft beer industry and the state's wholesale distributors.

"This is great news for consumers, craft brewers and wholesalers alike," Tim Kent, executive director of the North Carolina Beer & Wine Wholesalers Association, said at a news conference to announce the deal. "It's a win-win-win-win proposition."

State law allows brewers to sell and ship their beers wholesale up to 25,000 barrels a year. After that, they must hand over distribution, including pricing, to a wholesaler as part of North Carolina's three-tier system of alcohol distribution – producers, wholesalers and retailers.

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The two sides have fought in the legislature for years over the self-distribution cap, and two years ago, Craft Freedom, which represented small brewers, filed suit to pop the cap, arguing that it stifled growth in the industry.

Passage of either of the bills – both have the backing of leaders from both parties – would end the lawsuit, Drew Erteschik, an attorney for Craft Freedom, said at the news conference.

"There are a couple of times a year which we're able to stand forward and say we think we've really and truly solved a brewing problem – another pun," Rep. David Lewis, R-Harnett, said at the news conference as others giggled. "And I think this is one of those."

The companion bills, both labeled the Craft Beer Distribution & Modernization Act, would allow craft breweries to sell up to 50,000 barrels a year to retailers at wholesale prices as long as their total sales volume, including what they sell in their taprooms and to affiliated retailers, doesn't exceed 100,000 barrels.

"We have never been anti-distributor," said Suzie Ford, founder of NoDa Brewing in Charlotte, noting that wholesalers have the necessary infrastructure to help her company and other brewers expand their footprints and sell regionally.

"We couldn't expand until we really got this resolved. This is exciting for us that we can now look into markets that have wanted us," Ford said.

The beer industry has an $11 billion annual impact on the state economy, Kent said, noting North Carolina is home to 300 breweries and that distributors employ about 5,000 people.

"What we're doing here is validating and expanding a very important industry for this state," he said. "It has made us a destination in places like Asheville, Charlotte, Raleigh and others. ... This is a big deal, and it gives us more credibility, increased credibility, as the leader in the beer industry in the entire Southeast."

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