by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
What would it mean if the craft beer distribution compromise bill were to pass? This is the bill that would end the state’s arbitrary cap on breweries that forces them to stay small, producing 25,000 barrels or less, if they want to self-distribute some of their product.
Currently, North Carolina ranks 25th out of the 36 states that allow breweries at least some ability to self-distribute.
My research brief takes a look at how that ranking would change if the bill became law:
Breweries could self-distribute up to 50,000 barrels, and if they wanted to brew more to sell to consumers, wholesalers, and exporters, they could produce up to 100,000 barrels. Breweries producing over 100,000 barrels would still be required to contract with a third-party wholesaler.
Such a change would give North Carolina breweries more room to grow and expand and still maintain control over their product as they wish. It would be an overall boon to the state’s craft breweries, but it would still maintain the three-tier system.
If it passed, how would North Carolina rank among the 36 states that allow breweries to self-distribute? The state would move up in the rankings to 20th.
The problem with ranking, of course, is that there’s a 16-way tie for first place. The instance a state placed any limit on breweries’ ability to self-distribute, the best ranking you could hope for is 17th.
That spot is currently held by Wisconsin. Its distribution cap for brewers is 300,000 barrels.