In 2017, the General Assembly passed legislation allowing craft breweries in Georgia for the first time to sell their product directly to consumers in limited quantities.
While the bill has helped spark a huge growth spurt in the industry, craft brewers say they are still hampered by a system that favors beer wholesalers.
“Senate Bill 85 was a great step forward,” said Joseph Cortes, executive director of the Georgia Craft Brewers Guild. “[But] it left a lot of restrictions in place for our small brewers. … They’re still limited in what they can do within their four walls.”
Cortes’ group is gearing up to push for passage next year of legislation that was introduced in the state Senate this year but failed to reach the Senate floor for a vote.
Senate Bill 163, which remains alive for consideration in 2024, would repeal a provision in the 2017 law that limits craft brewers to selling no more than 288 ounces of beer per day – equivalent to one case – for off-premises consumption.
“That’s an artificially low barrier,” Cortes said. “Every other surrounding state except South Carolina has no limit or a larger limit.”
Instead, the bill would let craft brewers sell up to 3,000 cases of beer per year directly to retailers within a 100-mile radius of the brewery without going through a wholesale distributor.
While the bill hit a dead end in the Senate Regulated Industries Committee this year, there’s support for it among the chamber’s Republican majority, said Sen. Chuck Hufstetler, R-Rome, the measure’s chief sponsor.
“We are free-enterprise capitalist people,” he said. “That’s what this is.”
But the bill is sure to draw opposition from the wholesalers lobby, which helped sink it this year.
Martin Smith, executive director of the Georgia Beer Wholesalers Association, pointed to the rapid growth of the craft beer industry in the Peach State during the last decade as evidence craft brewers are doing fine under the current law.
From just 10 breweries statewide as recently as 2011, the number of breweries in Georgia has mushroomed to more than 150, including such high-profile brands as Sweetwater and Creature Comforts, Smith said.
“Georgia is already one of the nation’s top places to brew beer,” he said.
But Cortes said the existing law unfairly ties craft breweries to wholesalers in a way that drives up prices.
“The current system dictates that if a brewery wants to get a product to market, they have to enter an agreement with a wholesaler,” he said. “It’s nearly impossible to terminate that agreement or switch to another distributor.”
Cortes cited limits on craft breweries’ ability to self-distribute as a factor in forcing four or five breweries to go out of business.
“Openings are still outpacing closings,” he said. “But we’ve seen an alarming rate of closings in the last year. … They all cite issues with being able to get their products out to consumers in their communities.”
Hufstetler said the state of North Carolina allows breweries to self-distribute with no limits, and wholesalers have not suffered any adverse impacts.
“I haven’t seen any distributors go out of business because of it,” he said.
But Smith said giving craft breweries free rein would disrupt the “three-tier” system of beer producers, distributors, and retailers that has existed since the end of Prohibition.
“What the brewers are asking for would take away from a structure that’s there for healthy growth,” he said.
Hufstetler’s bill also would let craft brewers and brewpubs donate beer to charitable events, a right that only wholesalers enjoy under current law.
Cortes said he’s optimistic the bill will make it through the General Assembly next year, despite the wholesalers’ opposition.
“We just need time to tell our story,” he said.
This story comes to Rough Draft Atlanta through a content partnership with Capitol Beat.