Local Brewers Look to Raleigh to Lift Cap on Distribution…

Excerpt From: News & Record. Written By: Jonnelle Davis.

“We just want to have the ability to run our business here locally, and our business model is not the same as Sam Adams or Sierra Nevada or Budweiser.” John Marrino, founder of Olde Mecklenburg Brewery

While guiding a recent tour of Red Oak Brewery, brewmaster Chris Buckley told visitors about the unlimited distribution rights he said 22 states enjoy.

North Carolina is not one of them.

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He hopes that will change this year.

Red Oak is part of a grass-roots effort to change a state law that requires brewers to use a distributor when they produce 25,000 barrels of beer a year. That effort has attracted attention from the North Carolina General Assembly. Rep. Michael Speciale, a New Bern Republican, filed House Bill 67 last month to increase the production cap to 100,000 barrels. Rep. Chuck McGrady, a Hendersonville Republican, has said that he plans to file a similar bill, according to news reports.

As breweries such as Red Oak grow, they say they’d like to have more freedom to choose whether to distribute their own product in the retail market or use a third-party distributor.

John Marrino, founder of Olde Mecklenburg Brewery in Charlotte, called the current system a “politically connected cartel,” where distributors have “absolute control” over the state’s beer market, and they don’t want to relinquish it.

“It’s really an issue of fairness,” Marrino said. “In no other industry are you forced to transfer ownership and control of your business to another private company at an arbitrary volume level like this.”

It’s not the first time craft brewers have tried to get the cap lifted. A bill filed in the General Assembly two years ago to raise the cap to 100,000 never gained steam.

Things are different now, Buckley said.

There are more than 185 breweries and brew pubs in North Carolina, according to the N.C. Craft Brewers Guild. That’s up from about 26 a decade ago. Buckley said the increase in breweries has led to more support for lifting the cap.

Marrino said North Carolina brewers have spent the last year educating legislators and the public about the issue through the Craft Freedom campaign, which has a website dedicated to the effort. He said the campaign hired a political strategist and also has lobbyists working on its behalf.

Still, Buckley said he is not against the current three-tier system that consists of production, distribution and retail. He just thinks brewers should have more say in the matter.

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