Opinion: Georgia’s a great place to be in the beer business

State’s 3-tier system works for brewers, distributors, retailers and the public.

Credit: TNS

Credit: TNS

Georgia has consistently won national and international acclaim for its business environment over the past decade. Many leaders – including Gov. Brian Kemp and our business and legislative leaders – deserve credit for this accomplishment, which has helped Georgia move to the head of the class when it comes to economic development.

It turns out that Georgia’s economic development prowess goes beyond the boardroom or factory floor. Evidence shows that the Peach State is rapidly turning into one of the nation’s best states to brew beer. Georgia is the nation’s 8th largest state in terms of population, but is ranked 6th in terms of beer production. Georgia ranks 13th in craft beer production, and has seen a dramatic expansion of craft brewers, from fewer than 10 in 2011 to more than 170 today. Three Georgia-rooted craft beer brands – Sweetwater, Creature Comforts and Scofflaw – are among the nation’s top 50 craft brewers. As you would expect in a start-up environment, some brewers have succeeded and others have failed. But for a majority of Georgians, locally brewed beer is now available nearby.

Credit: contributed

Credit: contributed

A secret to that success has been a consistent approach by the state legislature to our state’s regulated industries, which often involve complex businesses vital to our state’s economic fabric or impacting public health.

One of those industries is alcohol, which requires a different regulatory approach than the average consumer product. Different states approach alcohol regulation in various ways. In Georgia, common sense has prevailed. Brewers can sell the equivalent of nearly two million 12-ounce bottles of beer per year to consumers directly from their breweries, sample new products for consumers and offer food for sale, all of which creates a meaningful secondary revenue stream. Brewers then leverage a strong network of local, family-owned distributors to get their product to the broader market.

This approach, where independent distributors bridge the gap between brewers and retailers, is commonly called the 3-tier system. While the role of the brewer and seller is typically clear, many do not understand the vital role of distributors, who market, warehouse, track and deliver alcohol safely to more than 17,000 destinations in Georgia.

Distributors invest hundreds of thousands of dollars to market individual craft beers. They fight for shelf space on behalf of new breweries and provide an immediate network for safe delivery across our state. Because they are independently owned and deliver multiple brands at once, distributors ensure a variety of brand choices for Georgia’s consumers while saving hours of labor time for retail and restaurant partners. All while ensuring various alcohol taxes are paid to state and local licensing authorities.

Georgia did not become a top state for brewers by accident. It is the result of more than eight years of careful, incremental changes to Georgia’s laws governing alcohol distribution by the General Assembly – changes designed to support the state’s craft beer industry while thoughtfully engaging all stakeholders to protect and benefit Georgia’s consumers.

  • In 2015, the Georgia legislature responded to brewers asking to sample their products on premise to promote tourism and passed Senate Bill 63, allowing tasting in taprooms.
  • In 2017, Senate Bill 85 passed, allowing brewers to serve beer in a bar-style setting and sell 1 million bottles of beer per year directly to the public.
  • In 2021, further changes were made to: 1.) allow greater availability of brewery selections for tasting; 2.) permit beer not brewed on site to be sold directly to consumers; and 3.) double the volume of beer permitted for sale directly to consumers to 2 million bottles per year.

Most of these changes were made at the request of craft brewers, who claimed they were supporting all tiers of the system. But last year, craft brewers continued to push for even more legislation, seeking to expand delivery zones, remove limits on the amount of beer they could sell directly to consumers and to self-distribute to retailers, a shift that is in direct opposition to the framework that has preserved jobs, promoted public health and provided public revenues for decades in Georgia. We expect similar attempts this year.

Distributors define success differently than some in the brewing business. Success to us is a thriving and safe ecosystem for production, delivery, sale and consumption of alcohol in Georgia, not maximizing bars, breweries or package stores per capita.

The reality is that Georgia’s beer drinkers (and producers) have it really good. We enjoy an efficient marketing and distribution system with safeguards to protect our youth, a consistent revenue stream to state and local government and, most importantly, thousands of choices of good beer on store shelves, at bars and in local breweries. So let’s all raise a glass together – and keep Georgia as one of the nation’s best places not just to do business, but to brew and drink good beer.

Martin Smith is executive director, Georgia Beer Wholesalers Association.