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    Passage of Craft Beer Bill Eases Production, Distribution Limits in NC
    The Vault

    Passage of Craft Beer Bill Eases Production, Distribution Limits in NC

    June 2019

    Craft Beer Distribution and Modernization ActNorth Carolina beer lovers, rejoice. The passage of a bill late last month, the Craft Beer Distribution and Modernization Act, allows your favorite NC brewer to make (and sell) a lot more beer.

    Signed into law on May 30th, the revised law allows North Carolina breweries to sell and self-distribute as much as 50,000 barrels of beer annually, twice as much as the previous limit. The law also allows for an additional 50,000 barrels to be sold by distributors, meaning the cap for NC brewers is now 100,000 barrels per year. For reference, a barrel of beer is 31 gallons.

    Beer is a big business across the south, and especially in North Carolina. According to the North Carolina Craft Brewers Guild, there are more than 300 breweries and brewpubs across the state. National advocacy group The Brewers Association ranks North Carolina 10th in the nation for craft-beer economic impact at more than $2B.

    Previously, North Carolina allowed self-distribution by small, local breweries, but it limited distribution amounts to up to 25,000 barrels. If brewers exceeded 25,000 barrels, they had to then transfer all distribution (down to barrel one) to third-party distributors.

    The passage of the law is expected to give the local brewing industry much more flexibility and room for expansion. The Charlotte-based Olde Mecklenburg Brewery (OMB), for example, plans to finally proceed with a new location, a Lake Norman (Cornelius) brauhaus and biergarten, a plan that was on hold due to the previous barrel cap. Bottle distribution beyond the Charlotte region is also on the table for OMB and other local brewers, so we expect distributors to see an uptick in business, too.

    OMB’s CEO John Marrino was instrumental in this cooperative endeavor for legislative change, and we salute his efforts.

    So, great news for the beer in NC, but what about distillers beginning to dot the region? What’s their fate?

    As it turns out, several alcohol-reform bills are working their way through the General Assembly, including House Bill 536, ABC Omnibus Regulatory Reform, which has cleared the House ABC Committee and awaits in Finance. The bill would allow, among other things, liquor tastings at ABC stores, allow online sales on a reciprocal basis, and allow distillers to sell an unlimited number of bottles from their distilleries.

    Are we entering an era of reform where NC alcohol laws are concerned? Perhaps, especially when you consider the passage of the 2017 “Brunch Bill” that allowed bars, restaurants, and retail locations to sell alcohol earlier on Sundays.

    Keep your eyes on the state legislature if this is your industry, and be sure to have a team in your corner that can help your business navigate the financial impact of any changes. We’re here to help.

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