News: Quick Takes

Efforts To Ease Alabama Alcohol Distribution Rules Mirror N.C.’s

Small producers cannot sell at same location they offer tastings; N.C. craft brewers are working to lift cap on beer production

North Carolina is not the only state in which mom-and-pop alcohol producers are seeking a break from restrictions on their ability to market their products. Alabama wineries and distilleries may soon see state lawmakers ease regulations that now prevent smaller operations from competing against alcohol industry giants.

One Alabama rule allows local wineries and distilleries to offer tastings of their product at fairs and festivals, but forbids them from selling bottles at those events.

Conversely, those wineries and distilleries can sell bottles at their places of business, but are not free to offer onsite tastings.

Jahn Coppey, owner of Wills Creek Winery in the Appalachian Mountains of northern Alabama, says the rule stunts business growth and makes little sense to small winery owners who are trying to compete with well-known brands.

“Most people who taste want to buy,” Coppey told The Associated Press, referencing the fact that he must refuse to sell wine to a customer following a tasting. “They don’t want to have to be sent to a store.”

Alabama’s liquor laws — which share some similarities with North Carolina’s alcohol regulations — are undergoing scrutiny by state’s lawmakers. One bill under consideration would lift the prohibition on tasting and selling alcohol in the same location, an action that opponents say is the wrong step for the state.

“Alcohol is an addictive and mind-altering drug,” said Joe Godfrey, executive director of the Alabama Citizens Action Program, a group that is fighting reform of liquor regulations. “It destroys homes, it destroys families.”

Others, however, believe that small wineries — and other local alcohol producers — should have the right to compete in a market that is dominated by large commercial producers.

“The state of Alabama keeps the market at arm’s length for small instate wineries,” reads a statement on the Alabama Wine Trail’s website. “Compare Alabama winery law to that of other states. Small wineries can only sell from a tasting room.”

In a move that reflects Alabama’s alcohol regulation reform efforts, last year North Carolina passed legislation allowing local distilleries to sell one bottle of spirits (per person, per year) directly to customers.

While that legislation was hailed as positive first step, small business owners say it’s not sufficient.

North Carolina’s craft breweries next year will ask the General Assembly to lift the annual limit on the amount of beer they are allowed to make and sell without being required to distribute through a wholesaler. The cap is 25,000 barrels, a limit that craft brewers say is unreasonable.

“The brewer loses almost 30 percent of its revenue and margin to the distributor, a devastating financial blow to any company,” reads a public statement from Craft Freedom, an organization sponsored by North Carolina’s craft breweries. “Finally, regardless of performance, North Carolina law makes it virtually impossible to fire a distributor and regain control of the brand. The brewery is locked in forever. Brewery owners have no choice, and no say in what happens to their business. This is currently the law. And it needs to change.”

To learn more about the effort to reform alcohol regulations in North Carolina, click here.