Craft beer and small breweries have grown well beyond niche markets. What was once a novelty is now ingrained in a culture that prefers local products emphasizing quality over quantity.
Yet North Carolina brewers — and to a larger extent the state’s distillers — are entangled in a mess of rules and regulations, including government limits that hinder a seamless union of production and distribution.
North Carolina residents surveyed in a recent Civitas Institute poll overwhelmingly support the Craft Freedom movement, which seeks to even the proverbial playing field with wholesalers and eliminate a state law requiring brewers to procure a distributor once their beer output reaches 25,000 barrels.
Lawmakers have filed a pair of bills toward that end, each measure seeking to raise the production limit to 100,000 barrels.
At least three North Carolina craft breweries — Red Oak in Whitsett, and Olde Meck and NoDa in Charlotte — are approaching the 25,000-barrel threshold. The brewers, Carolina Journal reported, want to continue control over their distribution and plan to halt growth if the law isn’t changed.
“Being in complete control is a huge benefit,” said Scott Craddock, brewing manager at Raleigh Brewing Co.
Raleigh Brewing has for the past two years produced 4,000 barrels annually, but he projects the brewery this year will produce and distribute 7,500. That growth will continue, Craddock said.
“When you’re with a distributor you basically just give the beer to them and then you don’t know how your product, your life’s work, is treated. When we’re in complete control, we see the beer from start to finish. From an empty keg to a full keg and an empty keg again. So we’re able to control our product and ensure that it is treated absolutely right throughout its life.”
The state has some 200 breweries, more than any other Southern state, and carry an economic impact of about $1.2 billion, the N.C. Craft Brewers Guild says. In 2015, craft brewers produced 675,469 barrels.
This isn’t a trend. It’s a booming industry, and just 4 percent of beer consumed in North Carolina is made locally, craftfreedom.org says.
Yet the restrictive laws remain and, according to the Civitas poll, residents want rid of them.
A vast majority of North Carolina voters are “more likely” to support lawmakers who encourage that growth — more than 60 percent across the board, including Republicans, Democrats, unaffiliated voters, and churchgoers. Similarly, voters are less likely — to the tune of 80 percent — to support lawmakers who favor production limits on state brewers to the benefit of large, foreign-owned brewers, i.e. AB InBev — which makes Budweiser — and MillerCoors.
The Civitas poll, taken March 18-19, surveyed 600 likely voters — 30 percent on cell phones — with a margin of error of plus or minus 4 percent. It also encompassed questions about the Trump presidency as well as state economic and legislative issues.
Republican political consultant Paul Shumaker presented the results during a lunchtime gathering Thursday at the Holiday Inn Raleigh Downtown.
“This is not an issue about alcohol,” Shumaker said. “This is ultimately going to become an issue about industries, free-enterprise markets and fairness … and jobs.”
The powerful N.C. Beer and Wine Wholesalers Association continues to say the current arrangement works well, and 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.
Turning toward the political, Shumaker talked about the idea of landmines and opportunities. The issue, he said, is more problematic for Republicans, even more so than House Bill 2.
It comes down to economics.
An opportunity exists to build a coalition, including Republicans — who are stronger on the self-distribution side — and independent voters. But the landmine comes if Democrats co-opt the issue, in effect becoming free-market conservatives and thus reeling in unaffiliated voters.
Just 2.5 percent of voters, says the poll, still supported the distribution cap after learning microbreweries make up only 4 percent of all beer sales in the state; the other 96 percent is sold through wholesale distributors who represent the mass-market — and typically foreign-owned — brewers.
A survey of 800 likely voters prepared for Craft Freedom by Strategic Partners Solutions and overseen by Shumaker finds the more voters learn about the impact of the production cap on North Carolina breweries, support for the production cap just about disappears.
“When the voters who favor the production cap learn that producers lose their brand and marketing rights,” says that survey, “support for the cap diminishes to 1.6 percent” — two Republicans, three unaffiliated voters and eight Democrats.
Who captures that “coalition” is key, Shumaker says, and which route the General Assembly will take remains unclear. The poll numbers, though, leave no room for doubt.
Kari Travis contributed to this story.