In July, Atlanta Brewing Co. President Robert Budd attended Nashville's Music City Brewers Fest, where he and other company workers chatted up customers while serving samples of their beer along with bratwursts.

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Dave Weil, operations manager for Atlanta Brewing Co., gets ready for a tasting at the company.

BY THE NUMBERS Craft beer is the fastest-growing segment of the beer industry. Sales rose nearly 12 percent in 2006, the latest available data. The craft beer segment has four distinct markets: brewpubs, microbreweries, regional craft breweries and contract brewing companies. A look at the craft beer market: • Annual sales: $5 billion • Production: More than 6.7 million barrels • Southeastern supermarkets selling craft beer: 263 • More business news

"It's a great way to promote," Budd said of the festival. which drew 8,000 beer lovers and 39 breweries from around the South. "They welcomed us to pour the beer. It was a tremendous business generator."

No such luck back home.

At the Decatur Beer Festival in October, Atlanta Brewing's beer was served by festival volunteers who didn't have the background to effectively explain the product. In Georgia, brewers aren't allowed to pour their products at events such as festivals.

It's a simple act, but one of the state's rules that small beer makers in Georgia say has limited their opportunities in the $94 billion American beer market.

Demand for microbrewed beer has grown in the last few years — and the South is one of the hottest areas for the craft beer market. But Georgia microbrewers say they're basically blocked from taking full advantage of the potential market here.

In the last few years, Georgia has lost three microbrewers: Dogwood Brewing Co., Zuma Brewing and Old Savannah Brewing Co. Its three remaining microbreweries produce about 45,000 barrels a year, or roughly $10 million in revenue. That's a pittance compared with microbrewers like California's Sierra Nevada Brewing Co., which does nearly 700,000 barrels a year.

"It's tough to be in this business," said Freddy Bensch, the big kahuna at Sweetwater Brewing Co., another Atlanta area microbrewer.

The big guys have their Clydesdale horses and multimillion-dollar TV spots with catchy phrases.

The state's three remaining microbrewers (the third is Athens' Terrapin Beer Co.) rely mostly on tasting tours at their facilities to create a buzz for their specialty beers.

"It's just about the only way we can afford to promote our beer in the state," Budd said.

Tasting tours are coming under scrutiny as state regulators revamp rules governing the production, distribution and sale of alcohol products. Under a new set of proposed rules being unveiled this week, visitors to Georgia's microbreweries may soon be limited to 24 ounces of beer, roughly half of the self-imposed amount brewers poured.

But the state's chief regulator recently defended the stepped-up scrutiny.

"I understand that word-of-mouth on the part of their products is a lot less expensive than television or print advertising," said Bart Graham, commissioner of the Department of Revenue, which regulates alcohol and tobacco. "What we're trying to do is provide them a reasonable opportunity to operate as freely as possible but maintain our statutory obligation."

Graham met with the heads of the three microbreweries in the summer to discuss a series of concerns, one of which is tasting tour limits. Both sides said the meeting was fruitful.

"I feel like they better understood what issues we have to deal with that goes beyond their view of the world," Graham said. "They seem more amenable to working with us in trying to find some common ground."

While the brewers try to persuade state regulators to ease restrictions, their products are gaining national attention.

Atlanta Brewing's Red Brick Blonde — a light, smooth-tasting elixir Budd pushed to get made — earned a gold medal in the prestigious Great American Beer Festival. The festival featured more than 400 breweries and 2,800 beers. It was Atlanta Brewing's first gold as it became the only Southern microbrewery to win first prize.

"I've got a soft spot for my baby, the blonde," Budd said.

Sweetwater scored a similar coup a few years ago at the same festival: the Best Small Brewer award.

"The business is changing rapidly," Budd said at the microbrewery's new home in a business park on Defoors Hill Road in Atlanta. "The majors are scrambling to keep ahold of their business. The real growth is in the craft and specialty brands. One of our biggest focuses is to promote the South as a region for great beer."

On a recent weekday tour, Budd drew parallels between the gourmet food and beer industries while pouring several rounds of beer samples.

"There's 60 specialty food companies in Georgia, yet we can't sustain three breweries," he said.

This year has been a bit challenging, given the drought.

The water shortage hasn't been a problem for Atlanta Brewing because "we don't use too much waste water," said brewmaster Dave McClure. The drought, however, has caused a spike in the price of hops, malted barley and other ingredients.

"Hops have gone up almost 10-fold," Budd said. Atlanta Brewing locked in its supply at about $6 a pound, but other breweries are paying close to $20 a pound for hops, if they can get it, Budd said.

The industry also is one of the more environmentally friendly businesses.

"Everything that goes out is biodegradable."

As for the meeting with Graham, the revenue commissioner?

There haves been no follow-ups since the summer meeting.

"We're actually delighted that the relationship with the government has gotten better in the last few months," Budd said. "And we're hoping this will lead to a better environment for craft beer."

DID YOU KNOW?
• 1.4 percent of the U.S. gross domestic product comes from beer making.
• Southern folks prefer a smoother, lighter beer that's slightly sweeter, while West Coast residents like their beer with more of a hop flavor.
• You can get a smoother, less-bitter-tasting beer if you add your hops near the end of the brewing process.

U.S. BREWERIES AT A GLANCE
The nation's 1,390 beer makers, big and small, produce more than 210 million barrels amounting to $94 billion in annual sales. A look at the industry:
Regional craft breweries: 48
Microbreweries: 375
Brewpubs: 967
Total craft breweries: 1,390
Large breweries: 20
Regional breweries: 25
Other non-craft breweries: 7
Total U.S. breweries: 1,442

CRAFT BEER SALES*
• Southeast: Up 33.9 percent
• Northeast: Up 18.9 percent
• Plains: Up 16.3 percent
• West: Up 8.1 percent
*Annual growth from July 2006 to July 2007

DO THE MATH
• 1 barrel = 31 U.S. gallons
• 2 half-barrel kegs = 13.78 cases (of 24, 12-ounce bottles)
• 50 barrels = 1 batch or 500 to 600 cases of beer
Sources: Atlanta Brewing Co., Beer Marketers Insight; Brewers Association; Information Resources Inc.