Georgia’s craft beer brewers still waiting for compromise to pay off

Nearly two months after all sides celebrated a compromise to provide the state's craft beer brewers an easier way to offer their wares to consumers, the Department of Revenue has yet to issue new rules detailing the process.

Now, with lawmakers adjourned for the year, beer brewers and their supporters in the General Assembly are increasingly anxious they’ve lost hard-earned momentum after legislators refused to approve a special committee to study beer regulations over the summer. The burgeoning industry instead must wait and hope the Department of Revenue, an agency they blame for bowing to the wishes of powerful alcohol wholesalers, does what all sides agreed to in January.

“We are anxiously awaiting the new regulations promised to us 10 weeks ago, addressing a bill that was passed a year ago,” said Nancy Palmer, the executive director of the Georgia Craft Brewers Guild. “There are 40 businesses in Georgia that are waiting to make plans, open tasting rooms and schedule events across the state because they hope that change is just around the corner.”

For its part, the Department of Revenue said the promised regulations are coming. In addition to the beer rules, the agency must also analyze and react to dozens of bills passed this year.

“The department anticipates the release of the proposed regulations for the 30-day public comment period before the end of the month,” Revenue Department spokesman William Gaston said.

Lawmakers in 2015 passed legislation that allowed Georgians to pay for a tour of a brewery and receive free beer afterward. Once the law took effect, breweries began offering different tours at different costs based on the kind and price of beer offered. Two months later, however, in September, the Revenue Department issued new rules that said the tour price cannot vary based on the beer given away. The brewers were furious and said the agency had succumbed to the wishes of the wholesalers.

The wine, beer and liquor lobby spends thousands of dollars each year to host lawmakers at its annual convention, and wholesalers and individual companies and their employees contributed hundreds of thousands of dollars to state and federal campaigns in Georgia in 2014 alone.

Soon after the release of the Revenue Department’s rules, The Atlanta Journal-Constitution reported, Speaker David Ralston, R-Blue Ridge, and Senate President Pro Tem David Shafer, R-Duluth, urged the department to reverse course and said lawmakers would act if the agency didn’t.

Sensing momentum, the brewers drafted legislation that would grant them what they wanted. Instead, however, the brewers and the wholesalers, with the blessing of the governor’s office, reached a compromise.

The agreement said:

  • Brewers again would be allowed to sell brewery tours at variable prices based on the kind of beer offered.
  • They could host special events at breweries and distilleries.
  • Brewers, distilleries and wholesalers would be allowed to use social media to alert the public about where to buy their products or advertise special events.
  • Brewers could allow third parties to sell tour tickets.
  • And breweries and distilleries would be allowed to sell food on site.

While the agreement required all sides to agree not to pursue legislation this year, the industry still moved forward with a request that lawmakers approve a study committee to recommend broader legislative changes for 2017. But the resolution to create the committee failed to move in the session’s final days.

Taylor Lamm, the master brewer at Lake Country Brewing Co. in Greensboro, said that was one last slap in the face.

“After the failed attempt to generate new legislation and a regressive compromise, HR 1345 gave Georgia craft breweries a glimmer of hope that progress could still be made in 2016,” Lamm said. “We are astounded that a sound step to this debate — a study committee — is dead without a vote by the committee that was charged with the task. At this point, the only solution seems to be to continue to raise awareness on a grass-roots level and push for real change in 2017.”

Georgia’s beer wholesalers say, however, that they respected the decision not to move forward with a study committee and said they’re committed to working with all parties to grow the industry.

But state Rep. Michael Caldwell, R-Woodstock, who sponsored the resolution, said its failure is mind-boggling. More than half of the 180 members of the House co-sponsored it, he said.

“The fact that we never received a vote on the measure is very disappointing and only prolongs Georgia’s time as one of the worst states in the nation for this industry,” Caldwell said.

Yet, there is plenty of reason for craft brewers to be optimistic, said Martin Smith, a spokesman for the Georgia Beer Wholesalers Association.

“Since 1995, the number of breweries in Georgia has increased 800 percent, while the national average is just 524 percent,” he said. “And I think we’re only getting started, as there are nearly 20 breweries scheduled to open this year.”

The industry’s supporters, however, say Georgia is still far behind other states. Georgia is one of only eight states that bans breweries from selling beer to customers to take home and one of eight that doesn’t allow customers to buy and drink a brewery’s beer on-site.

“Georgia can’t remain No. 1 for business and last for this specific industry for long,” Caldwell said. “I hope to see us become No. 1 for every business, and this could have been a strong step in that direction.”

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