Beer fight brewing at the Georgia Legislature

Georgia’s small but growing number of craft brewers already welcome thousands of visitors to their breweries each year for tours and small, hand-drawn “samples” of their beer — given away for free after purchase of a souvenir glass.

But what if you could sit in a tasting room and order a full pint? Or buy your favorite brew in a six-pack “to go” over the counter?

The state has banned such transactions since Prohibition. A number of craft brewers say it’s now time to uncap the bottle.

It’s the latest in a continuing ground war between local brewers and the powerful network of beer wholesalers, with the next battle headed to the state Legislature when the session starts Jan. 12.

Social media and crowd-sourcing campaigns have already begun, with supporters looking no farther than South Carolina — which just this year significantly loosened its restrictions on similar sales by its own craft breweries.

Now, only four other states — Hawaii, Mississippi, North Dakota and West Virginia — have laws similar to Georgia’s, barring craft brewers from either type of direct sale of their beer at the place that they make it.

“I’m a Georgia native, a guy who’s started a couple of businesses and now owns an American manufacturing business. We strongly support the three-tier system, but if someone walks through that door, I can’t sell them the very thing that I make,” said Nick Purdy, a co-owner of Wild Heaven Craft Beers at the border of Decatur and Avondale Estates. “This is a pro-business state, at least reputed to be.”

Georgia uses a “three-tier” system to separate the beer brewer, the wholesaler or distributor who delivers the beer, and then the retail shop, restaurant or bar that sells the beer to customers.

The system came into play as Georgia and the nation emerged from Prohibition, and it aimed to prevent monopolies by national beer manufacturers — the rules, in essence, prevented them from doing it all: making the beer, selling it and delivering it themselves to anyone who wanted.

Wholesalers essentially play the role of middlemen in the state’s regulatory system. They paint a bleak picture of what could happen if the state loosens the rules.

“What (craft brewers) aren’t telling you is that any changes to the current system could negatively impact the state economy, result in higher-priced beer at fewer outlets across the state and create less regulation for what is considered a controlled substance,” said Martin Smith, the director of the Georgia Beer Wholesalers Association.

It’s a message that so far has won the day at the Capitol, where the state’s alcohol distribution system has been under discussion for at least a dozen years. Changes have been made, including relaxing state regulations on wine sales (which supporters promote as an agricultural initiative, since grapes are grown at local vineyards) and allowing Sunday alcohol sales.

Beer laws, however, have largely remained more restrictive. A report issued by the Georgia Senate late last year only suggested that brew pubs — which, unlike breweries, sell food and beer to be consumed on-site — be able to sell beer “to go” in reusable growlers (usually large glass bottles) as long as some of it had been consumed during a meal.

Al Zachry of the LaGrange Grocery Co., a family-owned beer distributor in Troup County, was among a number of people who testified about the issue. He said the three-tier system gave him a chance to compete. He also lauded the system as a stable means for tax collection, including the $372 million in alcohol excise taxes that the distributors are responsible for collecting and paying to the government. Wholesalers say this “single collector system” makes it easy for the state to track revenue.

No one questions the increasing popularity of craft beer. While overall beer sales including nationally manufactured brands are down slightly, craft beer sales alone are up about 18 percent nationwide, according to the national Brewers Association. Georgia is experiencing that trend in full swing, although with what craft brewers say is a rub: Only about 2.2 million of the 6.2 million cases of craft beer Georgians drink each year are actually made by the Peach State’s 34 craft brewers.

The rest is “imported” from out of state. While no one believes being able to sell a six-pack or case will make up the difference, local craft brewers want the ability to make extra money — which they say they can then reinvest in their business and in the local economy. Purdy, for example, said he could hire at least three new employees if he could sell beer at his small brewery.

The brewers say they value the relationships with wholesale and retail partners, a relationship that is mutually beneficial for all sides. They also say they welcome the idea of limiting the amount of beer sold or that could be served in a day. For the first time for this upcoming session, they have hired a lobbying firm to help them get their message across. They’ve also started an online petition at gabeerjobs.com.

Wholesalers say craft brewers can grow and prosper within the current system. They also have deeper pockets.

As of Nov. 1, a lobbyist for the Georgia Beer Wholesalers Association had spent almost $21,000 on lawmakers this year, almost four times what he spent in 2013. Included was a $5,000 reception for lawmakers in January, $1,500 to sponsor the Georgia Legislative Black Caucus in February, $321 to take the House Regulated Industries Committee (which regulates the liquor industry) out to dinner in March, and $12,000 to house and feed nine top lawmakers speaking at the group’s annual meeting in June.

The brewers, however, aren’t going away.

“If you don’t have a million bucks, maybe a million people will help make things change,” said Nancy Palmer, who recently came on as the first executive director of the Georgia Craft Brewers Guild.

Support real journalism. Support local journalism. Subscribe to The Atlanta Journal-Constitution today. See offers.

Your subscription to the Atlanta Journal-Constitution funds in-depth reporting and investigations that keep you informed. Thank you for supporting real journalism.

X