An effort to raise the number of barrels North Carolina’s craft brewers can produce before they have to procure a distributor has failed.
Brewers are looking at their legal options and will likely file a lawsuit over House Bill, which sought to raise the barrel limit to 200,000.
Although House Bill 500 continues to slowly creep toward the House floor, the current proposed committee substitute hardly resembles the original filing and can best be categorized as legislative backwash.
Distributors won’t relent to the increased limits.
Rep. Chuck McGrady, R-Henderson, is a primary sponsor of H.B. 500. McGrady, in a meeting of the Alcohol Beverage Control committee Tuesday, presented the compromise.
“The two primary warring parties have come together on the bill,” he said.
Tim Kent, executive director of the N.C. Beer & Wine Wholesalers, which vehemently opposed an increase to the barrel provision, flashed a thumbs up.
The brewers, who gathered on an opposite side of the room, made no such gesture.
Nor did Rev. Mark Creech, executive director of the Christian Action League. He railed against the measure, in particular a provision that allows farm breweries to their products on site, contingent on local approval.
Rep. Pat B. Hurley, R-Randolph, went as far as to propose an amendment that eliminates such tastings in dry counties to include, presumably, wineries. Her motion failed soundly.
Jon Guze, director of Legal Studies for the John Locke Foundation, wrote that the fight over barrel limits is far from over.
“The law serves no legitimate purpose and exists for two reasons only: to protect the national and international beverage conglomerates from local competition, and to enrich the members of the wholesale distribution oligopoly to whom the craft brewers are forced to turn over their distribution operations. … The wholesalers and their friends in the legislature shouldn’t be too complacent … . In recent years, litigators in other states have successfully defended economic freedom on the basis of those states’ constitutions. Because it’s such a blatant example of cronyism, the beer distribution cap is vulnerable to challenge based on several provisions in the North Carolina Constitution.”
John Marrino, owner of Olde Meck, is one of the brewers — along with NoDa, Red Oak and Raleigh Brewing Co. — who have led the effort toward increasing the barrel cap.
“Last week we were shocked by what happened, and we have met with legal counsel,” he said Monday. “That’s the last resort, but if it comes to that we have to protect our businesses and the families that work for them.”