House Speaker David Ralston wants the Department of Revenue to reverse a controversial regulatory decision that Georgia’s craft beer industry says will strangle their industry.
Ralston, a Blue Ridge Republican, told The Atlanta Journal-Constitution that the department exceeded the authority the General Assembly granted and that lawmakers will act if the agency doesn’t.
“I was disappointed in what the Department of Revenue did, because I think that thwarted the legislative intent of that legislation,” Ralston said. “And I would like to see them eliminate the need for legislative action, if they would go back and revisit that, because if they don’t, we may have to.”
Officials with the Department of Revenue were not immediately available for comment.
Legislation adopted earlier this year gave craft brewers the ability to sell facility tours and give away their product afterward — a kind of backdoor way to actually sell their beer directly to customers, something brewers have long sought. After Gov. Nathan Deal signed the bill into the law, the state Revenue Department enacted rules governing the tours. Those regulations allowed brewers to create different tour packages at different price levels.
But months later, on Sept. 25, the department issued a "bulletin" saying while brewers can offer different levels of tours, the price differences cannot be based on the value of the beer. Many breweries, however, had already begun doing just that, based on the original rules the department issued in late June and on their understanding of lawmakers' intentions.
Brewers applauded Ralston’s comments.
“Speaker Ralston is a tremendous asset to both Blue Ridge and the state of Georgia.” Tom Fennel, owner of Fanning Brewing Co. in Ralston’s hometown, said. “He heard my story as a small business entrepreneur in his town and took to heart that I needed help from the state legislature.”
The AJC reported last month that Department of Revenue records show the agency met and spoke repeatedly with representatives of Georgia's beer and liquor wholesalers, who wanted to block the brewers from selling tours based on the beer offered. At the same time, agency officials refused to meet with the brewers or their representatives.
The wholesalers and the craft brewers have been at odds for years as the distributors seek to protect the long-standing prohibition that bars alcohol manufacturers from selling directly to consumers. With the Sept. 25 rule change, the Revenue Department came down squarely on the side of the wholesalers
Craft beer brewing is a booming part of the U.S. alcohol industry and had a $55.7 billion impact on the national economy in 2014, according to the Brewers Association, a national trade group. Georgia has 40 craft breweries, ranking 24th in the nation. But, thanks to laws that make it illegal for breweries to sell directly to consumers, Georgia ranks 41st nationally in economic impact per capita.
Georgia is one of the few states in the nation where it is still illegal for drinkers to buy beer at the brewery, either for on-site consumption or to take home.
Now, the Georgia Craft Brewers Guild says it’s time for Georgia to join the majority of the country.
“It’s become clear to the brewers of Georgia that we can’t leave these changes in the subjective hands of regulators who can change policy on a whim, the only answer is legislation allowing for common sense direct sales like 48 other states have allowed their small brewers to do,” Nancy Palmer, the Guild’s executive director, said. “Georgia’s community of small brewers, entrepreneurs, and their employees and families couldn’t agree more with Speaker Ralston.”
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