Opinion: Daily Journal

Beer money and changing markets

Campaign spending cannot override the power of markets and changing consumer tastes.

Beer taps at Raleigh Brewing Co. (CJ photo by Kari Travis)
Beer taps at Raleigh Brewing Co. (CJ photo by Kari Travis)

News that beer distributors through political action committees poured nearly $100,000 toward defeating a bill to lift a production cap on North Carolina brewers should surprise no one.

Tuesday, The Charlotte Observer, citing campaign finance reports, said from January through June the distributors gave Senate Republican leader Phil Berger $33,300 and House Speaker Tim Moore $21,700. The distributors also gave to members of the House Alcoholic Beverage Control Committee at least $22,000, among other donations given to lawmakers who consistently oppose any legislation having to do with alcohol.

As Tim Kent, executive director of the N.C. Beer and Wine Wholesalers, told the paper, “We’ve had a political action committee for decades. … Nothing has changed.”

He’s right of course. Nothing has changed and, on the wholesalers’ end, nothing probably will.

“So far it looks as though the dollars win,” says Todd Ford, founder of NoDa Brewing Co. in Charlotte and a leader in the Craft Freedom movement. “Eventually people tire of the corruption stories, and everybody moves on with little change.”

But things may change, because markets change, and tastes change. Lawmakers, removed by voters, change, too.

The state has well more than 200 craft brewers, and the list is growing. Breweries, in fact, are as ubiquitous in North Carolina as Starbucks coffee shops are in Manhattan.

As it stands, North Carolina’s brewers can produce no more than 25,000 barrels of beer before they must procure a distributor, a move brewers close to that threshold say unfairly inhibits growth, compromises their brand, and runs counter to the core tenets of a free market.

A provision to raise that cap to 200,000 barrels highlighted a bill to help craft brewers, but that morphed into omnibus legislation — Senate Bill 155, the so-called brunch bill — that included rules to help restaurants and distilleries. Lawmakers nixed the provision to raise the distribution threshold.

The brunch bill greatly benefits distilleries and restaurants that get local approval to sell liquor on Sunday, but it did little for the brewers who simply want to keep control of their product.

The craft brewers are adamant North Carolina law suppresses growth and have filed a lawsuit saying two state laws are unconstitutional and nothing more than economic protectionism for the distributors.

The case, pending in Wake County Superior Court, seeks a permanent injunction against enforcement of the state’s distribution cap and franchise laws. It says the distribution cap and franchise laws are inflicting injury and threaten to impose additional damage to the brewers.

Again, things change.

“The struggle the craft brewers face with the distribution mandate is a good example of how government regulations should be regularly reviewed and amended to ensure barriers for entrepreneurs, investors and job creators don’t get in the way of allowing markets to work,” says Becki Gray, senior vice president of the John Locke Foundation.

“Their slogan of ‘craft freedom’ could apply to any business in North Carolina. In the end, it’s all about freedom.”