OPINION| There’s a battle brewin’

Opinion crane

“Under Georgia’s wacky system a restaurant located beside a brewpub can sell that brewpub’s beer in a growler to go while the brewpub that made it cannot. What kind of sense does that make?” queries Terrapin Beer Company cofounder John Cochran. 

Within hours after F.D.R. signed the ratification of the 21st Amendment to our U.S. Constitution into law on Dec. 5, 1933, repealing the 18th Amendment and Prohibition, August Busch had a Clydesdale wagon deliver a case of beer to the president at the White House. The adult beverages industry has always appreciated the teamed needs of marketing and keeping their regulators happy campers.

Mass market brewers such as Anheuser-Busch/Imbev took note, several years ago, as consumption of their primary brands began an extended period of sales decline. Micro, craft and regional brewers, is where the majority of growth has moved to in the beer business. 

Yet state laws related to the manufacture, distribution and sale of alcoholic beverages vary greatly. Georgia maintains a convoluted three-tier system for beer and distilled spirits with the manufacturers, wholesalers/distributors and retailers/resellers all facing a vast array of taxes, license fees and regulations. While in 48 other states, craft brewers may also legally sell their product, fresh brewed, to consumers.

Athens, Ga., based Terrapin Beer Company, brews a wide array of products now sold primarily via distributors, in all or parts of 12 states, Washington, D.C. and Puerto Rico. Terrapin was founded in 2002 by Brian “Spike” Buckowski and John Cochran, and now has more than 100 full- and part-time employees. And, just as Terrapin has rapidly expanded, Georgia brewers are growing in number and clout, while assembling a healthy head of steam. 

Last year the Georgia General Assembly passed a watered-down brewery bill, allowing limited on-site brewery product sales, variable levels of tour pricing and a few other options to interact with their brewery tour customers. For Terrapin alone, that is roughly 30,000 visitors per year.

The wholesale distributors made their opposing views known on the front end, and then after the law passed, they in effect went around to the loading docks to chat more with the Georgia Department of Revenue (DOR), the state agency charged with regulating and controlling the spirits industries. This past fall, DOR issued a rule that in effect nullified most impacts of the new law. 

Later Georgia House Speaker David Ralston and other legislators cried foul that the DOR had, in effect, ignored the legislative intent of the bill…and that they could either fix it by rule, or the legislature would amend the law. But instead a compromise deal was reached, several weeks in the making, and largely foisted on the industry. If this holds, it basically has the same impacts as last year’s law, with a few improvements. 

The brewers may also now sell food onsite at their breweries, as one example. But the new deal does very little to actually alter the cumbersome three-tier distribution system, which perhaps by design is most lucrative for the middle men who deliver the product, versus those who make it or who actually sell it. 

Wholesalers by law, cannot sell directly to consumers, but they face limited competition, other than price point differences from manufacturers, in how they price their products to retailers and restaurateurs and bar owners.

The Georgia House has a resolution, HR 1345, with 91 co-sponsors, which calls for the appointment of a study committee on craft brewery and distillery competitiveness, authored by State Rep. Michael Caldwell (R-Woodstock). The resolution is not an act of law, it in effect expresses more the sense and sentiment of the chamber, and involvement is not required for the State Senate for the study committee to begin researching beer laws in other states. 

The beer purchasing public wants more craft beer product. Georgia wineries gained the ability to sell directly to consumers decades ago. Though brewers will still rely on distributors to ship, place and support the marketing of their products, they are making a reasonable request to expand a non-competitive offering of what they and only they directly brew to whomever takes the time and pays the price to visit their breweries. 

So before another full blown battle gets brewin’ next year, with public sentiment generally siding with the brewers, let’s hope that the wholesale distributors begin to open their minds to supporting this logical business expansion for one of their fastest-growing customers and business partners.  I’ll drink to that.

Bill Crane also serves as a political analyst and commentator for Channel 2’s Action News, WSB-AM News/Talk 750 and now 95.5 FM, as well as a columnist for The Champion, Champion Free Press and Georgia Trend. Crane is a DeKalb native and business owner, living in Scottdale. You can reach him or comment on a column at bill.csicrane@gmail.com. 

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