Under current state law, North Carolina brewers can only dream so big when it comes to business success. Despite the fact that the state’s craft beer scene has grown tremendously in recent years, brewing businesses must adhere to a 25,000-barrel production cap that prevents the industry from reaching its full potential.
Here’s how the system works currently: Before meeting the production cap, brewers can distribute their beer themselves. Once a brewer hits the production cap, it’s forced to turn over product distribution to a third-party distributor. In doing so, the brewers lose full control over their own businesses, including issues of branding, quality control, revenue, margins, and sales. To make matters worse, it’s nearly impossible for brewers to end contracts with their distributor, even if performance is terrible. Therefore, brewers either have to stay under the production cap, even if there is high demand and opportunity to grow the business, or grow beyond the barrel limit, but forfeit full control and ownership.
However, a coalition of small and mid-size brewers is pushing for a change to this rule. The group is Craft Freedom, which was formed in October 2015 to build momentum toward the 2017 legislative session. Now that the election is over, Craft Freedom is ramping up its efforts.
Todd Ford, co-owner of NoDa Brewing Company, one of the founding brewers of Craft Freedom, told Thrillist, “We are speaking directly to lawmakers on both sides of the aisle. We’re explaining how local breweries have been adding valuable well-paying jobs to the state’s economy, and how supporting their right to choose their own business path only makes political and business sense.”
Distributors, of course, will put up a fight, and it’s unclear how the Legislature will lean on this issue. The Asheville Citizen-Times listed it as one of the issues expected for debate this session.