Distributors Win NC Beer Battle, But Victory May Be Short Lived

Apr 25, 2017

North Carolina Legislature.
Credit NC Legislature

Craft brewers lost an important political fight Tuesday. A committee in the North Carolina House voted to strip provisions from a bill which would allow local brewers to sell more of their own product without going through a middle man.

If you haven’t been following the beer battle, here's a quick recap: current state law requires breweries to sign with a distributor if they want to produce more than 25,000 barrels of beer a year. Some breweries, like Olde Mecklenburg and NODA, don’t want that restriction since they would lose the ability to directly sell their own products and they would have to lay off their own sales staff.

A bill introduced earlier this year would raise that arbitrary 25,000 barrel cap to 200,000 barrels a year. Distributors didn't like that since it cuts them out of the sales.

In the end, the distributors won.

Lawmakers removed the provision and the barrel cap will stay the same for the immediate future.

But this victory could be a temporary one.

For some time, breweries have been considering legal action if their legislative actions failed. And they could challenge the distributors as unconstitutional monopolies. This is something Republican Representative John Bradford of Cornelius brought up in a news conference Monday. "Legal action only costs money. It costs time," said Bradford, "and if I'm in the shoes of the brewers, quite frankly, it's only upside for them. The worst case is they spend a lot of money, a lot of time and they get a ruling and it stays the same."

But, Bradford noted, the distributors could indeed be ruled monopolies, and potentially lose their keys to the beer and wine kingdoms they now preside over.