Craft beer advocate mostly right about Georgia brewery restrictions

As the popularity of craft beer continues to grow, so do the legislative fights over how to regulate the industry.

In Georgia, craft beer brewers say they are at a competitive disadvantage both regionally and nationally because state law prohibits them from selling directly to consumers. They’ve been trying for about a decade to change state law. They are back lobbying the Georgia General Assembly this year.

In the meantime, craft beer, generally defined as beer brewed by relatively small regional breweries, continues to become more popular and profitable. The national Brewers Association, based in Colorado, estimates that 207,000 barrels of craft beer were produced in Georgia in 2013, contributing $671 million to the state’s economy, taking into account its impact on breweries, wholesalers, retailers, jobs, even brew pub restaurants and taprooms. Nationally, the industry contributed $33.9 billion, the association says.

Legislatures across the country in recent years have wrestled with changing their alcohol and tax laws while weighing the competing interests of the craft beer brewers, the powerful big beer manufacturers and wholesalers. Part of the argument for the law change in Georgia is the relatively rare restrictions that exist here on beer brewers.

Georgia “is one of only five states that do not allow beer factories or ‘production breweries’ to sell beer for neither on-premise consumption (pints) nor off-premise consumption (packaged beer),” Nancy Palmer, executive director of the Georgia Craft Brewers Guild, said Monday.

Politifact decided to check the claim.

We reached out to Palmer, who warned us that “this issue is a little complicated.”

“Section 2 of the 21st Amendment provides a huge amount of leeway to the states to regulate alcohol, and each has come up with as many laws about it as there are stars in the sky,” she said. “The laws on alcohol vary from state to state significantly more than gun control or the control of illicit drugs.”

She said her research showed that only four states, besides Georgia, have laws prohibiting direct sales by breweries to consumers. They are Hawaii, Mississippi, North Dakota and West Virginia.

We contacted Palmer’s counterpart with the brewers’ associations in Mississippi, Mark Henderson of Lazy Magnolia Brewing Co., who confirmed that Mississippi does not allow its breweries to sell beer for on-site or off-site consumption.

Todd Sattler, with the brewers association in North Dakota, said, however, that restrictions are not as tight there.

“We have on-premise sales and growler sales,” he told PolitiFact.

In West Virginia, a brewer or resident brewer “cannot even sample or sell a pint for on- or off-premise consumption,” said Brian Arnett with Mountain State Brewing Co.

But there’s a loophole in West Virginia: “You can buy a brew pub license that allows sampling and pint sales,” Arnett said.

Hawaii has essentially broadened the definition of brew pubs so that craft beer can be brewed and sold at the same location, Palmer said.

Direct sales are believed to be critical to a brewery’s success in much the same way wine sales contribute to a winery’s bottom line, she said

Palmer said Hawaii has already addressed the issue by incorporating brew pubs with its breweries so direct sales can take place, similar to what Arnett mentioned is happening in West Virginia.

Craft brewers have been pushing Senate Bill 63, which initially would have allowed breweries to sell pints of beer to the public in an amount not to exceed 72 ounces per person per day and to sell no more than 144 ounces of packaged beer to-go per person, per day.

A substitute passed out of committee on Friday, however, that prohibits direct sales by breweries. It alters the current tour structure so that brewers can give away 36 ounces on-premises during the tour (compared with the current 32 ounces) as well as a “souvenir” malt beverage container of no more than 64 ounces to-go.

Our ruling

The Georgia Craft Brewers Guild is lobbying for breweries to have the right to sell directly to “consumers.” The group says craft beer breweries in the state are at a disadvantage because “Georgia is one of only five states where breweries can’t sell you a pint of beer to drink or sell you any to go.”

They were identified as Hawaii, Mississippi, North Dakota and West Virginia.

We found that at least North Dakota doesn’t belong on the list with Georgia.

But it’s clear that most states have already cleared the path for these sales. Others are working in that direction. That’s the Georgia guild’s overarching point.

We rate the statement as Mostly True.