News: CJ Exclusives

Limits on craft beer distribution subject of planned documentary

Filmmaker raising money for movie to show local breweries' battle against N.C.'s cap on self-distribution

(CJ Photo by Kari Travis)
(CJ Photo by Kari Travis)

While some of North Carolina’s craft breweries are gearing up for a 2017 legislative fight related to the distribution of their beer, Raleigh’s Lucas Smith is developing a documentary to tell the story of how some of the state’s beers get from the brewery to the taproom.

Smith is using the crowdfunding website Indiegogo.com as a financial springboard to launch the project. He hopes to complete a feature length documentary on North Carolina’s 25,000-barrel-a-year cap on self-distribution by breweries and the cap’s effect on the state’s craft beer economy. (One barrel is 31 gallons of beer.)

State law requires breweries that produce more than 25,000 barrels of beer annually to hire an outside distributor to market all their beer to retail stores and restaurants, not just the amount they produce after the 25,000th barrel.

Several successful local breweries that are nearing the cap and want to surpass it — Red Oak Brewery in Whitsett and Charlotte-based NoDa and Old Meck — say they want to maintain full control over their product’s sales and don’t want to be forced to lay off employees who are distributing their beer.

Filmmaker Smith began taking photographs and making videos as a hobby while he was studying music and sociology at UNC-Greensboro.

“Eventually, when I was getting enough work, I decided to make it [photography] part of my career,” Smith said.

He said he’s done some shorter documentaries of the five- to 10-minute variety, and became interested in doing a brief documentary after taking a tour of the Red Oak Brewery in Whitsett. He created the website FreeBeerNC.com to promote the initial video.

“I realized that a 10-minute video wouldn’t do [the issue] justice,” Smith said.

Red Oak Brewery owner Bill Sherrill has fought for a number of years to get the 25,000-barrel cap lifted. (One barrel equals 31 gallons.) But he hasn’t found much success.

Sherrill said a documentary about the self-distribution cap “can’t hurt. We need all the help we can get. In America it’s that golden rule. Those that have the gold make the rules.” He called the state’s rules on beer distribution, dating from the end of Prohibition in the 1930s “a monopoly. And [distributors] have plenty of money.”

He compared the self-distribution cap on breweries to the billing practices of legal firms.

“Let’s pass a law that says small law firms can only bill so many hours, let’s say 250 hours a year, and then after that all you can do is research and turn it over to [a major law firm] like Parker Poe or Womble Carlisle,” Sherrill said. “How would they feel?”

Old Meck, NoDa, and several other North Carolina craft breweries have decided to push to get the law changed when the General Assembly returns for its regular session in 2017.

All three brewers say they are approaching the 25,000-barrel cap and don’t want to be forced either to distribute all their beer through a wholesale distributor or curb their growth once they reach the limit.

The N.C. Beer and Wine Wholesalers Association plans to push back. The wholesalers say the current arrangement works well, and that removing the cap would provide a competitive advantage to a small group of North Carolina breweries to the disadvantage of everyone else — including other small breweries that appreciate the convenience of having a larger company handle direct sales and marketing.

But the craft brewers fighting the cap say they should have the ability to decide who distributes their beer, and that decision shouldn’t be dictated by the government.

Todd Ford, co-owner of NoDa Brewery, said he’s glad Smith is making the documentary. It’s always good to get more opportunities to spread the word, he said.

Ford said that craft brewers have hired a couple of lobbyists and a political strategist as they gear up for next year’s effort.

“We’re kind of sitting back right now that the short legislative session is over with waiting for the election to come through,” Ford said. “Then we’ll pick up the pace again and start working to try to change a few people’s minds in Raleigh and hopefully get them to see it a little differently than they have in the past.”

Smith said he’s hoping to talk to all involved — brewery owners, taproom operators, beverage distributors, and legislators — as he goes about producing his documentary. He also wants to look at the distribution laws in other states.

Initially, he had planned to start filming in October, but instead he expects to begin filming in September.

After putting the final touches on the documentary, Smith said he hopes to place it at film festivals to draw a wider audience.

“We’re going to send it out to pretty much every North Carolina festival,” Smith said. He expects to send the documentary to about 30 film festivals in North Carolina and surrounding states, noting there are more than a dozen festivals in the Tar Heel State alone.