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Craft breweries try again to raise cap on self-distribution

RALEIGH — State Rep. Michael Speciale, R-Craven, has filed a bill that would increase the amount of beer smaller craft breweries could brew and sell without having to contract with a wholesale distributor.

House Bill 67 would increase the cap from 25,000 barrels per year to 100,000 barrels per year. A barrel of beer is 31 gallons.

At least three North Carolina craft breweries — Red Oak in Whitsett, and Olde Meck and NoDa in Charlotte — say they are already approaching the 25,000-barrel threshold. They say they want to continue control over their distribution and plan to halt growth if the law isn’t changed.

Previous attempts to increase the distribution cap were unsuccessful, but craft brewers have ramped up their lobbying efforts and plan to make a big push for a change this year.

Ryan Self is director of sales for Olde Mecklenburg Brewery in Charlotte. The brewery opened in 2009 and now, according to the N.C. Craft Brewers Guild, has some 180 cohorts across the state.

Self, who spoke at the John Locke Foundation last year, said the choices before customers are unprecedented and so, as a result, is the market.

“So the idea of a handful of monolithic providers who control the market really has been undone by the consumer. Their demand for more options, local options, fresher craft options have really undone that monopoly.”

The monolith has arisen, he said, within the distributional channel.

Distributors are certainly important and necessary, but, he said, distributors who represent multiple brands serve many masters. Inevitably, customer choice, depending on the market and circumstances — the number of bars, taprooms, shelf space — becomes limited.

Craft brewing is evolving and expanding, yet just 4 percent of the beer sold in North Carolina is made in North Carolina, and that, Self told us, includes breweries such as Sierra Nevada and Oskar Blues, which started someplace else but expanded into the Tar Heel State. As far as the other 96 percent, local distributors keep a percentage of the money, but the remainder leaves North Carolina.

“It takes all those dollars out of our communities and ensures, instead of us having strong local breweries, we have a strong beer scene, but not one that is really home grown.”