A measure brought about by a lawsuit against the state from craft brewers easily cleared another legislative hurdle Wednesday, May 15.
House Bill 363 and its companion, Senate Bill 246, would maintain the state alcohol regulation system’s current three-tier system — producers, wholesalers, and retailers — but add a new, mid-level classification of brewers to state law. Brewers, under the proposal, could self-distribute 50,000 barrels of their products, as opposed to the current 25,000, which has been a point of contention.
The Senate Committee on Commerce and Insurance spent fewer than 10 minutes Wednesday discussing the bill before sending it to the Rules Committee. Rep. David Lewis, R-Harnett, a primary sponsor, said all affected parties have weighed in on the bill, and he encouraged senators to support it.
Under the Craft Beer Distribution and Modernization Act, breweries that exceed 50,000 barrels would not lose the ability to self-distribute, although the new law would affect only those breweries that sell fewer than 100,000 barrels of beer per year. Now, if a brewer sells 25,001 barrels per year, by state law, every barrel produced — including the first — must go through a third-party wholesaler/distributor.
A lawsuit filed in 2017 by Craft Freedom LLC, The Olde Mecklenburg Brewery LLC, and NoDa Brewing Co. said the distribution cap and franchise laws injure and threaten to impose additional damage on the brewers.
Superior Court Judge Allen Baddour in May 2018 ruled the lawsuit could proceed to trial, but the pending legislation effectively puts the lawsuit on hold.