Georgia needs to reform its laws and regulations governing our local craft beer industry, because the current system is an obstacle to economic development..
Everywhere in America including neighboring states such as North and South Carolina, Virginia and Florida, laws and policies have evolved to meet the needs of their growing craft beer industries. But Georgia stands out as slow to adapt, resistant to evolution and, frankly, antagonistic to the interests of consumers and our small craft brewing industry.
Georgia is radically different from other states in that consumers cannot purchase beer from a craft brewery. Instead, consumers have to buy a tchotchke or some other trinket, and then they can be given up to a six-pack of “Free Souvenir Beer” to take home with them. And then, the Georgia Department of Revenue taxes craft breweries on the imputed value of the free souvenir beer they are not allowed to sell. You couldn’t make this system more confusing or backwards if you tried.
Georgia has allowed our state to become a poster child for over-regulation and over-taxation. This system does not encourage or support the development of small business. Instead, it creates confusion and retards economic development — to the detriment of our communities, local entrepreneurs and consumers.
Even minor changes to existing laws can have a significant and meaningful impact. In 2013, South Carolina passed a law that allows breweries to sell to consumers up to four beers on site and up to a case of beer to go. In the six months after that law was passed, new brewery openings alone accounted for more than $13 million in capital investment and 138 new jobs. Those new breweries are projected to contribute more than $70 million in economic activity and over 600 jobs by 2019.
The list of states that have made meaningful reforms in the past few years is impressive but, unfortunately, Georgia isn’t on that list. Many states are encouraging growth in their local craft beer industries and enjoying higher levels of new capital investment at a faster pace than Georgia.
A valid question to ask is, why is Georgia so slow to make common-sense reforms? The answer lies in the simple fact of money in politics. The lobbyists for Big Beer and wholesalers have worked overtime behind the scenes to convince our state’s political leadership that craft beer reform is a grave threat to their own narrow interests.
Nobody reading this article would be surprised to hear a lot of money is flowing through wholesalers’ hands, and that they have been very generous to our ruling political class. Our career politicians have every incentive to protect Big Beer and maintain the fire-hose flow of money to our political leadership.
The sad irony is that our politicians regularly campaign on a platform of less regulation and tax reduction and claim to be the best friend of small business. But contrary to that rhetoric, we end up with a system that punishes small business with confusion and over-regulation. We also see less economic development and fewer jobs in our state, and local entrepreneurs are left to wonder whether Georgia is the right place to invest their capital and hard work.
I am not suggesting we have to get money out of politics to bring about meaningful reform. That’s a much bigger issue than simple, limited, craft beer reform. But we should all be vigilant to protect the free-market ideals that we cherish, notwithstanding the role of lobbyists and moneyed special interests. We have an obligation to continually pursue common-sense reforms in all areas of government regulation, despite the corrupting influence of money in politics.
We must re-establish and perpetually defend sensible free-market policies that support and encourage our entrepreneurs to start and grow new businesses. If we ignore this responsibility and leave the issue to the political class, we are all bound to wake up someday to find the economic freedoms we strive for are just an illusion.
Craft beer reform in Georgia is a small but important battle for free-market capitalism. We all have a responsibility to encourage and protect our developing small businesses.
Brooks W. Binder is an Atlanta lawyer who represents small and medium-sized businesses.
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