A Quick Primer On The Politics of Beer in North Carolina

One of Charlotte’s biggest craft brewers is growing by leaps and bounds. And that’s a problem.

There was a time when beer distributors were folk heroes. Forty years ago, Coors was a bit of a delicacy in the East, and it wasn’t possible to even have one (legally) in Charlotte. In 1973, a full four years before “Smokey And The Bandit” hit theaters,” A&S Wholesale was buying truckloads of Coors out West and hauling it back to Charlotte for sale. In some places, it went for the then-high price of $1 a can. Naturally, Coors cried foul, a judge agreed, and it wasn’t until 1983 before the first legal kegs rolled off a truck in Charlotte.

How quaint. There are so many different brands and styles of beer on sale from so many different places that it’s hilarious to imagine anyone going to that much trouble to get, of all things, Coors. Distributors now truck all sorts of beer all over the country. Which means, really, you’d think that it shouldn’t be that hard to find beer from Charlotte here in Greensboro, including my favorite, Olde Mecklenburg Brewery’s Copper. Before I left Charlotte, I ordered it so often as to be blatantly predictable.

But last week, Olde Mecklenburg said it’ll pull out of the Greensboro area. The cuplrit? A North Carolina law that states when small brewers expand to a certain point, they can’t distribute their own beer, and have to turn that part of their company over to a distribution business. The dividing line is 25,000 barrels a year. Brew less than that, and you can load up your own truck and distribute it yourself. Brew more, and you have to give it to another company that’ll throw your kegs, cans, and bottles in a big ole trailer with Bud Light or Sam Adams. Olde Mecklenburg, which thinks it’ll run up against that 25,000 barrel line this year, has said repeatedly that it likes being able to deal with bars on its own, to work with stores to determine placement on shelves, to be able to check on tap placement and the freshness of kegs, and so on. To keep doing that, OMB will stop brewing at 24,999 barrels. To bring more beer to Greensboro would mean less beer would be available in Charlotte, where it’s already popular. For OMB, which opened a bigger brewhouse in Charlotte in 2014, growth has never been a problem. Until now.

On the other side of things, distributors say they’re better at this part of the business than craft brewers, and that the state law helps protect consumers by ensuring fair and regulated distribution (I know this because former WCNC investigative reporter Stuart Watson and I talked with the North Carolina Beer & Wine Wholesalers Association a little more than a year ago. Here’s a link to an excepted version of the story because Gannett/Tegna haphazardly trashed like half of our reporting when it “upgraded” wcnc.com, not that I’m bitter). And really, if you want to take your craft beer national or even regional, you’re going to have to work with a distributor. Asheville’s Highland Brewing, for example, uses distributors from Ohio to Florida.

To bring more beer to Greensboro would mean less beer would be available in Charlotte, where it’s already popular. For OMB, which opened a bigger brewhouse in Charlotte in 2014, growth has never been a problem. Until now.

But on the flip side, nobody knows your product better than you, right? That’s exactly what worries not just OMB, but Red Oak and NoDa Brewing, which also are approaching the 25,000 limit. They’re worried that their success would be in the hands of a distributor, their growth would be stunted, and some jobs would have to be cut. OMB’s John Marrino says he’s the one who should be able to make the choice on when and how to use a distributor. “The bakery doesn’t have to use [one],” he told Stuart and me last year. “He can distribute his own bread.”

It’s not like this is a new thing. OMB and Red Oak have been talking about this for years, although talk may not be the best way to approach the issue:

Beer and wine wholesalers are among the biggest contributors to politicians in North Carolina, and several attempts to raise or get rid of the 25,000 barrel cap have gone nowhere in the legislature. The core of distributors’ business comes from macrobrewers, like MillerCoors and AB InBev, and so there’s less incentive to spend a lot of time catering to a lot of little brands. You can see why OMB is worried.

Craft beer is far from the only industry where North Carolina’s laws favor big business over small startups. For example, cities can’t build out their own municipal fiber-optic networks anymore. Salisbury had futilely asked cable companies for higher-speed internet for years. When they refused, Salisbury built out its own fiber-optic network in 2010. A year later, the General Assembly responded by passing a law banning what Salisbury had done:

When the I-Team asked him if the cable industry drew up the bill, [State] Senator [David] Hoyle responded, “Yes, along with my help.”
When asked about criticism that he was “carrying water” for the cable companies, Hoyle replied, “I’ve carried more water than Gunga Din for the business community — the people who pay the taxes.”

In 2013, automobile dealers tried to keep Tesla out of North Carolina with a bill that would have banned auto manufacturers from selling cars directly to consumers, like Tesla does. The bill failed (although Tesla did open a dealership in Charlotte in 2015). And in North Carolina, liquor is completely under state control, thanks to the long-standing ABC system.

There’s a little reason for hope? Maybe? Before 2005, beer had a limit of six percent alcohol by volume, which meant higher-gravity beers were banned here. A successful campaign got that law overturned, and now you can buy barleywine and your imperial IPAs to your heart’s content. It’s one of the reasons why North Carolina’s craft beer industry is growing.

It was just last year that Olde Mecklenburg just expanded into the Greensboro area with a cold-storage warehouse. A year later, it’s pulling out. It’s hard to say how well OMB beer was selling outside of Charlotte (Greensboro has Natty Greene’s and several other small breweries in town, after all, and they seem to be doing well), but either way, Olde Mecklenburg is giving up quickly here. Which means, if I want my favorite Charlotte beer, I’ll have to go Westbound and Down to get it.

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